FASHION FIRM’S MOVE TO SLASH COSTS

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 £100million. They would also pump an extra £40million 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 per cent since branches reopened.

New Look boss Nigel Oddy said: “This transaction will allow us to secure our future for the benefit of all stakeholders as we navigate the post-Covid-19 landscape.”

THE Government has vowed to step up efforts to get the US to lift heavy tariffs on UK goods like whisky, imposed as part of a EU trade row.

The UK is caught in a 16-year trade battle between the EU and US over state aid for aircraft maker Airbus and American Rival Boeing. US trade rep Robert Lighthizer said the EU had not done enough to ease tariffs, covering £5.75billion worth of European and UK products.