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New Look has reportedly entered a High Court battle with four landlords – including British Land and Land Securities – over its proposed restructuring plans.
According to The Times, the fashion retailer is being challenged by landlords over its CVA, a restructuring procedure which was agreed last year, that switched the brands shops over to a turnover-based rent system.
Under the terms of the agreement, property owners must accept no rent for three years on 68 stores, and as little as 2% turnover on 402 others – a move that New Look reportedly argued was “vital” for survival.
Documents obtained by the outlet show landlords arguing that “bare minimum market rent” should be paid, however it should not be under the terms of the restructuring.
The landlords have also reportedly labeled the swap to turnover rent as “unfair” – stating it “fundamentally rewrites” the nature of leasing agreements.
Last November, New Look completed a “comprehensive” financial recapitalisation following a separate High Court sanction of the company’s financing scheme of arrangement.
At the time, the company said the recapitalisation would “significantly” reduce long-term debt for the group, whilst providing financial strength, funding and flexibility to “deliver a sustainable trading platform for the business”.
Retail Sector has contacted New Look for comment.
