JD Sports and Iceland are set to take on New Look stores after landlords broke the leases under the terms of the retailer’s Company Voluntary Arrangement (CVA).
Iceland will move into New Look’s store in Launceston, Cornwall, and JD Sports has signed up to take on New Look’s store on Commerical Road in Portsmouth, Drapers can reveal.
Both stores were to stay open under the terms of the CVA but with reduced rents.
Drapers understands that retailers including Mountain Warehouse, Sports Direct and Lidl are also believed to be weighing up bids for a number of other stores within the New Look portfolio.
When contacted by Drapers a spokesman for Lidl said: ”To support our expansion we are, of course, considering all options that suit our requirements and store formats.”
Drapers understands that landlords representing dozens of New Look stores are in discussions over either mitigating the terms of the rent reductions outlined within in the terms of the CVA or breaking leases to sign up new tenants.
One landlord, which holds leases for over a dozen New Look stores said: “We have had enquiries from all those retailers.
“We haven’t made a decision yet on what that outcome is going to be. What this does demonstrate is that there is an active market there [for new stores] and there are retailers who are willing to take space and are doing well.
“From our position there is a financial hit [of the CVA] but we are confident we can mitigate that figure down.”
New Look announced plans to close 60 stores under terms of the CVA, with a further 393 stores subject to rent reductions.
Under terms of the agreement landlords of B1 stores were subject to a 20% rent cut, B2 stores of 40%, and B3 stores of 60%.
However landlords can exercise their right to break leases with 60 days notice under the terms of the CVA.
One property expert said: “Where [New Look] asked for rent reductions had very little to do with how these stores traded. A lot were in good locations, they were profitable. A lot of landlords are saying now saying ’I think I can do better or the same’ and this I think this has caught New Look by surprise.”
Iceland, New Look and JD Sports declined to comment.