New Look store closure deal wins creditor approval
Troubled UK fashion chain New Look has managed to overcome one hurdle with its company voluntary arrangement (CVA) plan under which it will close 60 stores having received almost unanimous creditor approval. And it’s looking to the future with a new approach to pricing and faster product development.
Some 98% of its creditors voted in favour of its CVA on Wednesday that will cut its rent bill but could also mean almost 1,000 job losses.
Many of those creditors were the landlords who will now be releasing the company from its lease obligations in malls and on shopping streets across Britain. The affected sites will close within six to 12 months’ time with none closing in the short term, the company said.
The CVA approval was crucial for the company to avoid going under and involves not only the 60 store closures but also a revision to lease terms and rent reductions of between 15% and 55% at another 393 locations for the three years of the CVA’s duration.
Executive chairman Alistair McGeorge said the CVA was vital for securing the company’s future and putting it back on the profits trail and that some of the affected staff could be redeployed in roles elsewhere.
And he added that other cost-saving initiatives are being planned. The company is “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."
McGeorge’s strategy has also included axing expensive projects, such as the now-cancelled move to a new HQ, and refocusing on the core 25 to 45 year-old customer rather than the completely trend-led 20-somethings that it has targeted more recently.
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