New Look has revealed details of a proposal to reduce its UK store estate and rental costs amid challenging trading performance and a difficult retail environment.
Under the proposal, New Look has identified 60 out of its total 593 stores in the UK for potential closure, alongside a further 6 sites which are sub-let to third parties. The proposal also includes a reduction in rental costs and revised lease terms across 393 stores.
The proposal involves a requirement to make redundancies from the stores which have been identified for potential closure, expected to be a maximum of 980 colleagues amongst the company’s current UK staff base of 15,300 people.
New Look is seeking creditor approval on the proposal, which is due on 21 March 2018. All UK stores will remain open as normal during the period of the proposal and the company’s online sales channel will be completely unaffected by the proposed changes.
Alistair McGeorge, executive chairman of New Look, said: “Given our challenged trading performance and over-rented UK store estate, we are having to take tough but necessary actions to reduce our fixed cost base and restore long-term profitability.
“We have held constructive discussions with our key landlords and strategic partners and will now seek creditor approval on our CVA proposal. A priority for us is to keep all potentially affected colleagues informed during this difficult time.”
Daniel Butters, partner at Deloitte, added: “The retail trading environment in the UK remains extremely challenging, driven by weaker consumer confidence, the implications of Brexit and competition from online channels.
“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.”