New Look Belgium (NLB) has filed for insolvency as New Look reviews its non-core international markets after agreeing a debt bail-out earlier this week.
NLB filed for bankruptcy proceedings with the Brussels Enterprise Court on 16 January.
The board said: “NLB’s performance has been below expectations and the business has not achieved the necessary sales and profitability to continue its ongoing operations on a standalone basis.”
NLB currently operates six stores in Belgium.
The news comes after New Look announced a debt-for-equity swap aimed at reducing its long-term debt by 80% from £1.35bn to £350m. The retailer announced in October that it was closing its 120 stores in China, and executive chairman of New Look, Alistair McGeorge told Drapers it was seeking to do the same across Europe.
He said: “We’ve dealt with China and will be downsizing in Europe. We’re already pretty close with our strategy and will be downsizing in our other overseas areas.”
Following the proposed restructuring credit ratings agency Moody’s downgraded New Look’s rating of Caa3 on the £700m fixed rate notes and €415m floating rate senior secured notes that are due 2022 to C. Its corporate family rating, probability of default rating and unsecured notes rating remain unchanged at Ca, Ca-PD and C, respectively.