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New Look advances refinancing talks

Young fashion retailer New Look is said to be close to appointing City advisers to help with its debt refinancing.

According to Sky News, the retailer is holding discussions with several banks including Goldman Sachs, HSBC and JP Morgan, with a view to appointing one of them as an adviser to negotiate a refinancing deal.

New Look is a heavily debt-laden business and wants to replace a £700m PIK (Payment in Kind) debt as a matter of urgency because of the high level of interest it generates.

The PIK note is held by private equity firm Apax Partners, which is also one of New Look’s shareholders alongside Permira and New Look founder Tom Singh.

A spokesperson for the business declined to comment, but it is widely known that various refinancing options have been considered since chairman Alistair McGeorge joined the business two years ago from Matalan.

In June last year New Look confirmed that it had agreed a deal to extend all of the maturities on its senior debt until 2015, giving it further time to consider options.

However industry commentators stressed the need for to quickly settle on the right approach.

“New Look needs to rethink its refinancing plans,” said Dan Coen director at restructuring firm Zolfo Cooper. “New Look is no HMV – yet – but it’s operating in a highly competitive market which, amongst other things, is under extreme pressure from online competitors.”

New Look reported a 3.7% increase in like-for-like sales for the 14 weeks to December 29.

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