Landlords of several New Look stores are refusing to reduce rent payments as part of the retailer’s company voluntary arrangement (CVA) in favour of getting new tenants in, Drapers has learned.
Drapers understands that several landlords are in advanced discussions with alternative occupiers to take space in the stores where New Look is aiming for rent reductions of 40% and 60% under the CVA.
One landlord said: “We will either refuse to take the rent cut or we will find somebody else.”
One agent who advises several high street landlords said one of his New Look stores was likely to close, as he is lining up another retailer to take the space: “New Look has become aware we are in discussions with another retailer and they are not happy with it.
“[New Look] would like to try to prevent [losing the store], as it will encourage aggressive behaviour with other landlords.
Drapers understands that the landlord for a New Look store in Portsmouth, where the retailer is targeting a 60% cut under the CVA, is in advanced discussions with another occupier on the space.
One property adviser added: “New Look is in a very competitive area of the market but the brand hasn’t moved forward in 10 years. They need to do something or others will take the stores, without doubt.”
New Look declined to comment.
The CVA, which was agreed by 98% of New Look creditors on 28 March, identified 60 of its 593 stores for potential closure, as well as six further sites that are sublet to third parties. The proposal also included rent reductions and revised lease terms for a further 393 stores.
Stores were split into categories A, B1, B2, B3 and C leases. The CVA proposal states that category A stores face no rent reductions, B1 stores face a 20% rent cut, B2 40% and B3 60%. Category C stores face a 60% rent cut for six months then would pay no rent thereafter.
Stores within the B1 category include Bicester, Bromley, Guildford, Newquay, St Albans, Windsor and Longfield Road retail park in Tunbridge Wells.
Stores within the B2 category – a 40% cut – include Aylesbury, Barnsley, Barnstaple, Canterbury, Dartford, Grimsby, Salisbury, Truro and Wandsworth, south London.