LONDON, Aug 26 (Reuters) - Struggling British fashion
retailer New Look launched the latest stage of its restructuring
process on Wednesday, seeking turnover-based leases from
landlords at 402 UK stores to help to lower its costs and ensure
its survival.
New Look said that the company voluntary agreement (CVA) it
was proposing - the second restructuring of its store estate in
three years - would need approval from landlords and unsecured
creditors at a vote on Sept. 15.
The impact of COVID-19 lockdowns on retail sales was such
that New Look, which employs 11,200 people, said it needed to
switch to the turnover rent model to safeguard its future
viability.
New Look has already won agreement from its banks and
bondholders over a recapitalisation plan, but that deal is
conditional upon the rebasing of its rents through the CVA,
which is being launched after discussions with landlords.
"The proposal ... would relieve the financial pressure on
New Look as we navigate the post-COVID landscape, whilst also
providing our landlords with greater flexibility over their
rental arrangements and ensuring closer alignment of interests
with regard to sales recovery," said New Look Chief Executive
Nigel Oddy.
New Look is owned by its bondholders, with the biggest of
those being South African investment firm Brait, along
with Alcentra, Avenue Capital and CQS.
(Reporting by Sarah Young
Editing by David Goodman
)