Clothing and fashion retailer New Look is set to close 60 out of its total 593 stores, alongside a further six sites which are sub-let to third parties, following poor operational performance.
The firm announced that a Company Voluntary Arrangement (CVA) launched on 7 March 2018 has been approved by the overwhelming majority of the company’s creditors and landlords, with 98% of votes in favour of the proposal.
Amid a “challenged trading performance and difficult retail environment”, the retailer has decided to reduce its UK store estate and rental cost base.
Alistair McGeorge, executive chairman of New Look, said: “In order to help restore long-term profitability, it is clear we need to reduce our fixed cost base. We are therefore pleased to have gained the support of our creditors to address our over-rented store estate. Launching a CVA has been a tough decision and our priority remains keeping all potentially affected colleagues informed during this difficult time.
“The CVA is one of a number of necessary actions we are taking to get the company back on track. In addition to implementing other cost-saving initiatives, we are 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. Additionally, we have further strengthened our alignment between ecommerce and stores.
He added: “New Look is a great brand and today represents another important step in helping to rebuild our position within the UK market.”
Final decisions on individual store closures will be made by the company and the stores’ respective landlords.
The stores are likely to be closed within the next six to 12 months.