New Look to close 60 stores and cut 980 jobs
New Look has announced it will shut 60 stores and cut 980 jobs as part of a restructuring plan agreed with its creditors yesterday.
The retailer had been in talks with creditors about a company voluntary agreement (CVA), a measure frequently used by businesses to avoid going into administration. New Look said yesterday the CVA proposal launched on 7 March had been approved by the “overwhelming majority” of the company’s creditors and landlords, with 98 per cent of votes in favour of the proposal.
New Look said: “The CVA was launched to improve the operational performance of the company by reducing its UK store estate and rental cost base amid challenged trading performance and a difficult retail environment. The CVA will deliver material annual cost savings for the company.”
New Look has selected 60 out of its total of 593 stores in the UK for potential closure, alongside a further six sites which are sublet to third parties. The firm said final decisions on individual store closures will be made by the company and the stores’ respective landlords. While the closures are most likely to happen within six to 12 months’ time, New Look said, no stores will close on day one.
“In order to help restore long-term profitability, it is clear we need to reduce our fixed-cost base. We are therefore pleased to have gained the support of our creditors to address our over-rented store estate. Launching a CVA has been a tough decision and our priority remains keeping all potentially affected colleagues informed during this difficult time,” said New Look chief executive Alistair McGeorge.
“The CVA is one of a number of necessary actions we are taking to get the company back on track. In addition to implementing other cost-saving initiatives, we are already focusing on driving future full price sales by realigning our pricing to offer significantly better value, adding flexibility to our buying model, and improving our speed to market. Additionally, we have further strengthened our alignment between ecommerce and stores.
“New Look is a great brand and today represents another important step in helping to rebuild our position within the UK market.”
Earlier this month both Maplin and ToysRUs went into administration, putting almost 5,000 jobs at risk.