Young fashion retailer New Look has confirmed that it has finalised an agreement to restructure its debt.
In order to improve its financial position the retailer has agreed an extension of all maturities on senior debt until April 2015.
Last month Drapers reported that New Look had reached an agreement with senior leaders to extend the maturity of its debt but that the deal had not been formalised. Today the retailer said that the agreement had received 100% consent from its syndicate of lenders.
The news comes as New Look reports its preliminary results. The retailer saw a 2% fall in group sales to £1.5bn for the year to March 31. EBITDA dropped to £147m, down from £191m the previous full year.
Group like-for-like sales dropped 5.9% while UK like-for-like sales were down marginally less at 5.7%.
According to a statement issued by the retailer, the company has maintained its number two position in the UK womenswear clothing and accessories value market.
It said a “rigorous focus on costs and working capital” contributed to an improved cash position at year end of £212.3m compared to £191.4m the previous year.
“We made considerable progress in our strategy of improving ranging, pricing and quality and broadening our appeal across our customer base,” the retailer said in a statement.
“We continued to keep tight control of inventory and worked to improve lead times to give us greater flexibility to buy into the key seasonal trends. Looking forward, this focus will allow us to reduce our markdown and improve gross margin.”
The retailer also added that it expects to continue to see strong growth in its online business resulting in 50 to 100 fewer stores.
New Look’s new store concept, which it trialled in four stores earlier this year, will be rolled out to 120 stores in this new financial year.
The retailer said its international franchise business continued to perform strongly, beating its budget, increasing store numbers by 54% and entering four new markets - Indonesia, the Balkans, North Africa and South East Europe.
“New Look is making good progress in its turnaround, delivering on our plan, in what remains a challenging consumer environment,” said executive chairman Alistair McGeorge.
“The evidence for this can clearly be seen in our performance in the second half compared to the first. When I joined the business a year ago we were facing significant internal disruption, we had lost our edge in terms of our value position and alienated some customers with our ranging.
“All this meant we had undermined our competitiveness on the high street. We have made significant progress in addressing these issues – work that will continue through this year.”
The extension of New Look’s debt will also allow the retailer’s management team greater time to evaluate options for the PIK tranche.
The company will also prepay a portion of the senior, second lien and mezzanine debt. At year end, total net debt was in line with last year at £1.1bn.