New Look France goes into liquidation, 400-odd employees to be laid off
today Jun 27, 2019
New Look is leaving France. The brand’s French subsidiary has now been put into liquidation after filing for receivership at the end of March. The decision was made by the Paris trade court on June 26, two days after the subsidiary administrators requested the liquidation.
No credible buyers were found for the French business, which includes the subsidiary’s 30 stores and a staff of some 400 employees (of which almost 370 had permanent contracts). Faced with the threat of liquidation which materialised thereafter, employees staged overnight sit-ins from June 21 at a handful of stores, including Rouen, Paris Saint-Antoine and Coquelles. They are demanding more favourable redundancy packages, such as compensation higher than the legal minimum, in particular. They have also requested that the British parent company contribute financially to the redundancy plan to be implemented.
Most of the stores will shut their doors in the coming days and their leases will be terminated on a case-by-case basis, with some already having closed.
The decision was made following a series of strategic shifts over the past few months at New Look France. In September 2018, the brand announced its intentions to reduce its French business by putting into place an employment protection plan that was to affect 262 jobs and see 21 stores closed. The plan was abandoned several weeks later with the arrival in November of Paul-Henri Cécillon, crisis manager at Phinancia, at the head of the French subsidiary. He proceeded to assess the state of the company and its business before announcing in February 2019 that it would be put up for sale. One month later, it filed for receivership and since that time no credible buyer has shown an interest in acquiring the deeply unprofitable business.
The fast-fashion retailer, which has been present in France since 2006, saw its sales collapse in the French market, falling by 13.6% in 2017-2018 to €57.9 million euros. “In the last three years, New Look France’s results significantly worsened due to the crisis of the French textile and apparel market, made more serious in the last few months by the forced closure of several stores during the ‘yellow vest’ demonstrations on various week-ends in December 2018 and January 2019,” stated the group at the time of filing for receivership in March.
New Look, which will celebrate its 50th anniversary this year, operates 600 stores globally and is facing financial difficulties internationally as well. The company recently decided to close down its businesses in China, Belgium and Poland. For the 2018-2019 fiscale year, the company recorded a decrease in sales of 3.8% to £1.239 billion (€1.385 billion), although it saw its EBITDA rise from £18 million to £80.2 million as a result of restructuring initiatives.
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