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New Look successfully slashes debt

New Look has slashed its long-term debt by 80% from £1.4bn to £350m and repaid its £80m bridge facility.

The UK retailer has completed the restructuring of its balance sheet after agreeing a debt-for-equity swap with a group of its key financial stakeholders in January.

The deal involved a further £150m in capital through the issuance of new money bonds, which has been used to pay off the retailer’s £80m bridge facility and leave it with additional liquidity. 

Executive chairman Alistair McGeorge said: “Today’s completion represents a significant milestone in our turnaround process, and a major endorsement from our stakeholders in the strength of our brand and in management’s ability to deliver enhanced profitability through the wider strategy already being implemented.

“With a materially deleveraged balance sheet and a more flexible capital structure, we now have a stable operating platform, which positions us well to respond to challenges and grasp new market opportunities.

He added: “We have already implemented significant improvements across our business, returning to a proven broad-appeal product to rebuild our position in the UK womenswear market, enhancing our multichannel offering and bringing significant operational expertise to our business with the recent appointment of Nigel Oddy as chief operating officer.

“With a highly experienced management team and a stable operating platform in place, we are now positioned to deliver on our wider plans and attack our future.”

The retailer has also been reviewing its non-core international markets. In October, New Look announced it was closing its 120 stores in China, and McGeorge told Drapers it was seeking to do the same across Europe.

New Look Poland filed for bankruptcy, and confirmed it is seeking a buyer for the 30 stores in its French arm, which faces continued difficult trading. New Look Belgium filed for insolvency in January.

In the retailer’s most recent trading update, it returned to a group operating profit of £38.5m for the 39 weeks to 22 December 2018, from an operating loss of £5.1m in same period in 2017.

 

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