New Look seeks support from landlords as CVA deadline approaches

New Look is calling on its landlords to support a restructuring plan to reduce rent paid on retail sites, after it failed to attract a buyer for the business.

The CVA is set to be considered at a meeting on 15 September. A successful vote will see the financial restructuring concluded, but if unsecured creditors do not support the CVA, New Look’s directors will have to “consider less favourable alternatives” than the current transaction.

The transaction, which would materially reduce long-term debt if completed, is contingent upon 75% of unsecured creditors of New Look Retailers Limited supporting the terms of the CVA proposal, however.

The deadline for first round bids for potential buyers was set for 8 September. While some parties expressed an interest in certain assets of New Look, it said no bids have been received for the share capital of the retailer or alternative recapitalisation transaction.

The group had previously announced a recapitalisation transaction in efforts to right-size its capital through a debt-for-equity swap, in a move that would see a £40m cash investment into the business. 

New Look first announced it was eyeing a second CVA deal last month, after reports said it was set to appoint ‘Big Four’ accountancy firm Deloitte to negotiate with over 450 landlords across its 480 store estate.

Its previous CVA, which was launched on 7 March 2018, received some 98% of votes in favour of the proposal and saw close 60 out of its total 593 stores, alongside a further six sites which are sub-let to third parties, following poor operational performance.

At the time around 980 jobs were lost.