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New Look seeking to restructure debt

New Look is looking to restructure its debt and is expected to appoint an advisor within weeks, according to reports.

The Financial Times says that the business’ chairman Alistair McGeorge and founder Tom Singh, who owns a quarter of the value retailer, are considering restructuring options for what a debt pile of £1bn.

These could include putting more money into the business or buying some of the stakes owned by private equity groups Apax and Permira.

New Look’s debt includes payment-kind-notes, a loan where interest rolls up and is paid in a lump sum at the end of the term. This is now thought to have swelled to more than £700m.

The company was taken private by Singh in April 2004 for £698.7m with the backing of Apax Partners and Permira.

In July 2005, the original £485m LBO debt arranged by CSFB, HSBC and HVB was refinanced with a £750m senior, second lien and mezzanine package with HSBC, HVB, Citigroup, RBS and Mizuho as MLAs.

Drapers exclusively revealed on Wednesday (February 29) that New Look’s creative director Barbara Horspool was the latest high profile name to leave the business in the last fortnight, followed by the retailer’s heads of buying and merchandising.

Head of buying Nicky Wills and head of merchandising for womenswear David Barton have also left the business.

Horspool, who was lured back to New Look last year by founder Tom Singh, left following the end of her 12 month contract and is not expected to be replaced.

It’s thought that McGeorge is putting the appointment of a chief executive on hold until after the debt restructuring is dealt with.

New Look declined to comment when contacted by Drapers.

Readers' comments (7)

  • WOW, Just read the TOP 10 Best Selling brands of the week 'according to Drapers Record'!?
    I have 4 stores, had them for over 10 years, we take pride in our buying structure, we've been nominated twice for drapers awards, won one of them, we consitantly monitor the best performing brands within our young sector, we talk to over 30-40 other indie owners over each season and the TOP 10 this week 'according to drapers' is absolute nonesense! It make no sense and isn't a true reflection on the market - FACT.

    Everyone knows whats flying, NOT forward order, not the same old boring brands, the game has moved on.

    You've got brands that have literally rattled and changed the whole sector over the past 8 months and are here to stay, the goods last 2 days in store and you reorder with a 24 hours turn around, Little Mistress, Maggie & Me, Hybrid, post card from Brighton.

    Call the indies that have a say, with footfall online and on the high street. I suggest that you call a few contacts and update your records, someone out there will have names, addresses, emails of all the indies that have the real, active indies out there that are here to stay.

    I read with dis belief today - Firetrap at number 1! Please, please, how can that be?? Who are Drapers calling??!! Soaked in Luxury, I will forgive Drapers if they report this as a mis-print next week, maybe its their spell checker kicking in? Glamerous, sorry?? It says brands, how are they a brand? Wheres their POS, Etail, marketing, signiture, BRAND is a big word.

    I ask Drapers to re-look at this, this type of mis-information really will turn subscribers away, Drapers need to move on.

    #dontguessthetopmakethecalls

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  • Good post above but it's under a New Look debt story. Maybe the writer could post it under another more relevant article as I am sure he/she is far from alone with their views. It's nothing new..a decade ago Drapers listed top sellers yet us and other indies felt we traded in another universe as our bestsellers were totally different to the list.

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  • Drapers are completely out of touch with most things; this hardly surprises me!!

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  • Totally agree, so out of touch on young fashion, did anyone walk the walk at Pure?????

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  • Agree with much of the above. The indicators are so far removed from what is actually going on, that the trade generally regards the section as a bit of a joke. They bear little relation to the real world. Drapers used to call our store, but we always got the feeling that we weren't telling them what they wanted to hear... There was a occasion a few years back where one particular brand hadn't delivered its stock in to retailers, yet the brand in question still made number 8 in the Drapers list, despite no product in the shops to sell!!!

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  • Thanks for all your commments - I have been hearing feedback to this effect from the trade since I started at Drapers last year and I am in the process of updating the way we gather data and the way we present it. A new data section will be a part of the re-designed Drapers launching at the end of this month so it will be interesting to hear what you think of that. The problem with a spot-check survey of the market like Indicator is that it is only a sample of what's going on and it does rely on those called having the time to answer our questions. We are upgrading our list of surveyed indies at the moment to better reflect the market and are always on the look out for external data sources to add in as well. On the issue of it not being what we wanted to hear I can categorically say the results are genuine, unedited, and based entirely on what the shops we spoke to told us. I am also looking into whether any companies have epos data we could tap into to increase our sample size. This has taken a while but the issues are being addressed.
    I hope this helps.
    Best wishes,
    Caroline Nodder
    Editor in Chief
    Drapers

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  • Thanks for the above comment Caroline but 3 days later it was announced Firetrap were up for sale. It just kind of looked a bit if an 'insider job' to those trading outside the inner circle...but I would like to believe it was all on the line too. Look forward to the new samples telling us what sellers are top.

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