New Look has announced a proposal to reduce its UK store estate and rent costs through a company voluntary arrangement, with potential job losses hitting nearly 1000.
The retailer is seeking to close 60 out of its 593 stores in the UK, alongside a further six sites which are sub-let to third parties.
The proposal also includes a reduction in rental costs and revised lease terms across 393 stores.
Redundancies from potential store closures are expected to affect a maximum of 980 members of staff.
New Look currently employs 15,300 people in the UK.
It said “all efforts will be made to redeploy colleagues within the business where possible.”
New Look is seeking creditor approval on the proposal, which is due on 21 March.
All UK stores will remain open during the period of the proposal and the company’s online sales channel will be completely unaffected by the proposed changes.
Daniel Butters and Neville Kahn of Deloitte LLP, the business advisory firm, have been appointed as nominees to the CVA.
Alistair McGeorge, executive chairman of New Look, said: “Given our challenged trading performance and over-rented UK store estate, we are having to take tough but necessary actions to reduce our fixed cost base and restore long term profitability.
“We have held constructive discussions with our key landlords and strategic partners and will now seek creditor approval on our CVA proposal. A priority for us is to keep all potentially affected colleagues informed during this difficult time.”
Butters added: “The retail trading environment in the UK remains extremely challenging, driven by weaker consumer confidence, the implications of Brexit and competition from online channels.
“New Look is an iconic brand on the high street and the CVA will provide a stable platform upon which management’s turnaround plan can be delivered. We have fully engaged with the British Property Federation and its members and their views are reflected in what we believe is a fair proposal to restructure the property obligations of the company.
“It is important to stress that no stores will close on day one, and employees, suppliers and business rates will continue to be paid on time and in full.”
List of New Look stores identified for potential closure under the CVA proposal:
Aberdeen - Bon Accord
Cardiff - Queen Arcade
Dundee – Wellgate
Gateshead - Team Valley
Glasgow - Buchanan Street Mens
Hanley Mens - Intu Potteries
Hull – Whitefriargate
Leeds - The Core Shopping Centre
Leicester – Haymarket
London - Marble Arch
London - Moorgate/ London Wall
London - Oxford Circus
Merry Hill Mens
Metro Centre – Mens
Peterbrough Bridge Street
Reading - Broad Street
Reading Oracle Mens
Stockport – Merseyway
Stratford Upon Avon -Bridge Street
Torquay - Union Street