New Look’s company voluntary arrangement (CVA) has been given the green light by 98% of its creditors and landlords, resulting in 60 store closes and nearly 1,000 job cuts.
New Look proposed a CVA earlier this month in a rescue plan to reduce its UK store estate and rent costs, with 980 potential job losses.
It sought to close 60 out of its 593 stores in the UK, alongside a further six sites sub-let to third parties.
Under the terms, the stores identified for potential closure are “most likely” to close within six to 12 months’ time subject to decisions by individual landlords, but no stores will close on the first day.
The proposal also includes revised lease terms and rent reductions ranging between 15% to 55% across 393 stores. The CVA process is expected to take three years.
Alistair McGeorge, executive chairman at New Look, said: “In order to help restore long-term profitability, it is clear we need to reduce our fixed cost base.
“We are therefore pleased to have gained the support of our creditors to address our over-rented store estate. Launching a CVA has been a tough decision and our priority remains keeping all potentially affected colleagues informed during this difficult time.”
He added that the CVA is “one of a number of necessary actions we are taking to get the company back on track”: “In addition to implementing other cost-saving initiatives, we are already focusing on driving future full price sales by realigning our pricing to offer significantly better value, adding flexibility to our buying model, and improving our speed to market.
“Additionally, we have further strengthened our alignment between ecommerce and stores.”
Daniel Butters and Neville Kahn of business advisory firm Deloitte LLP were appointed as nominees to the CVA earlier this month.
Industry experts previously told Drapers that while a potential CVA at New Look was “long awaited”, it would not go far enough to cut costs at the struggling retailer.