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VERY’S QUICK PPI RECOVERY
FASHION chain New Look is to ask store landlords to back a radical shake-up to safeguard its survival.
The retailer will propose a change so that rents are based on how much in sales each shop takes.
It’s the first time a big chain has demanded a switch to “turnover-based rents” and will be closely watched by others.
New Look is proposing the change through an insolvency process called a Company Voluntary Arrangement in order to slash the rent bill on its almost 470 stores.
The company’s banks and bondholders have agreed a plan to boost its finances, including a debt-for-equity swap which would cut its debt pile from £550million to £100m. They would also pump an extra £40m into the business. But both elements are dependent on the CVA being approved. Insiders say failure to get backing for the CVA could put the chain’s future, and its 12,000 workers, in doubt.
A possible sale of the business is also being considered.
New Look has been hit hard by the coronavirus lockdown, with store sales down 38% since branches reopened. New Look boss Nigel Oddy said: Want more moneysaving
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Online retailer Very is battling back from last year’s big PPI claims hit.
A hefty bill for missold payment protection insurance saw the group, previously called Shop Direct, post a 2019 £185million pre-tax loss.
The blow forced the firm to go cap in hand to its owners, the billionaire Barclay brothers, for a bailout.
Now Very is set to be back in the black when results for the year to June are announced, with finance chief Ben Fletcher adding it didn’t expect a “substantial” increase in its PPI provision.
The news came as Very emerged a winner from lockdown, with its growth in new customers more than doubling and annual sales expected to top £2billion.
It’s opened a warehouse near Derby that can process orders to dispatch in 30 minutes. Group boss Henry Birch hailed the firm’s “impressive” performance.