New Look rescue deal puts 980 jobs at risk
British fashion retailer New Look plans to close 60 stores as part of a rescue deal to help it avoid going into administration.
About 980 staff face redundancy – from a 15,300-strong UK workforce – and rents at about 400 stores will be slashed.
The rescue plan still needs approval from creditors. New Look said it faced “a difficult trading environment”.
Chairman Alistair McGeorge said the cuts were “tough but necessary”.
The retailer hopes to redeploy employees within the business where possible.
Mr McGeorge said a key problem was New Look’s “over-rented UK store estate”.
As a result, the retailer – which has 593 stores in total – has held talks with its landlords in a bid to reduce its fixed costs and restore profitability.
It has also been struggling with an “extremely challenging” retail market, said Daniel Butters, a partner at Deloitte, which is handling the New Look Company Voluntary Agreement (CVA).
“[This has been] driven by weaker consumer confidence, the implications of Brexit and competition from online channel,” he said.
“New Look is an iconic brand on the High Street and the Company Voluntary Agreement will provide a stable platform upon which management’s turnaround plan can be delivered.
“It is important to stress that no stores will close on day one, and employees, suppliers and business rates will continue to be paid on time and in full.”
High street slowdown
A glut of UK retailers have made closures or gone bust in recent months amid a slowdown on the High Street.
Last week toy store chain Toys r Us fell into administration, along with electronics retailer Maplin, leaving thousands of jobs at risk.
Restaurant chains Byron and Prezzo have also announced closures, while House of Fraser is seeking to shore up its finances.
On top of weaker consumer confidence, experts say retailers are battling a “perfect storm” of pressures including the rise of online shopping and rising overheads such as the National Living Wage.
Many firms also over-expanded during the good years, leaving them dangerously indebted.
New Look will learn if creditors have approved its rescue plan on 21 March.
The British Property Federation (BPF) said it had taken the right steps to ensure that landlords’ interests were taken into account, but said it would be up to individual landlords whether they accepted the proposal.
New Look plans to close the following stores:
- Aberdeen – Bon Accord
- Bolton Mens
- Burton Mens
- Cameron Toll
- Cardiff – Queen Arcade
- Doncaster Mens
- Dundee – Wellgate
- Exeter Mens
- Gateshead – Team Valley
- Glasgow – Buchanan Street Mens
- Hanley Mens – Intu Potteries
- Hounslow Mens
- Hull – Whitefriargate
- Leeds – The Core Shopping Centre
- Leicester – Haymarket
- London – Marble Arch
- London – Moorgate/ London Wall
- London – Oxford Circus
- Maidstone Mens
- Merry Hill Mens
- Metro Centre – Mens
- Newport Mens
- Newton Mearns
- North Shields
- Nottingham Mens
- Ocean Terminal
- Peterbrough Bridge Street
- Reading – Broad Street
- Reading Oracle Mens
- Romford Mens
- Shrewsbury Mens
- Stockport – Merseyway
- Stratford Upon Avon -Bridge Street
- Torquay – Union Street
- Weston Favell
- Wigan Mens