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New Look credit rating further upgraded

Credit ratings agency Moody’s has upgraded New Look for the second time in as many months, after the retailer completed its financial restructuring plan.

New Look’s credit rating has increased from Caa2 to Caa1, meaning it is considered “high quality and [at] very low credit risk”. Moody’s said its outlook is “stable”

It cited New Look’s business plan, new capital structure, financial policies and liquidity profile as the main reasons behind the upgrade.

It comes after the retailer was promoted from Caa3 to Caa2 in May.

Moody’s said: “[New Look’s] post-restructuring capital structure provides sufficient flexibility to enable management to proceed with its business plan.

“[It has] good brand recognition on the UK high street [and] benefits from additional financial flexibility from lower rents after the implementation of a CVA signed in March 2018.”

It added: “New Look relaunched its brand in April 2018 to refocus on its core customers, integrate its store and online activities, and realign its supply chain.”

“New Look now needs to demonstrate that it can maintain market share and stabilise revenue in a still highly competitive UK retail market.”

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