Sun FM News

Contact the News Team:
Tel: 0191 548 77 99

Nearly a thousand jobs could go at New Look

new look Bridges

1:46pm 7th March 2018
(Updated 5:45pm 7th March 2018)

New Look is aiming to shut 60 stores and cut nearly a thousand jobs as part of a rescue plan.

The fashion retailer is also planning to have its rent cut at nearly 400 others.

The closures amount to nearly 10% of its shops and it says it hopes to redeploy as many members of staff as possible.

Three stores from the North East are closing; at Team Valley in Gateshead, the Metro Centre (New Look Men) and Stockton-on-Tees.

--------------

The struggling fashion retailer said its package of measures included seeking agreement from creditors for a so-called Company Voluntary Arrangement (CVA) that would allow it to slash costs including high rent bills in a "challenging" retail environment.

New Look said it was forced to take action to improve the operational performance of the company and all stores would be open as normal ahead of a creditor vote on the proposals, expected on 21 March.

In addition to the closure of under-performing stores, including six further sub-let sites, the retailer said it was seeking rent reductions and revised lease terms at another 393 of its 593 stores.

New Look, which has 15,300 UK staff, said it would attempt to redeploy some of the 980 people at risk of redundancy under the process - adding that its online sales operation was unaffected by the restructuring.

Just last month it had revealed a nine month pre-tax loss of £123.5m - with like-for-like sales in the UK down almost 11% as shoppers' budgets came under pressure from wage growth failing to keep pace with Brexit-linked inflation.

Executive chairman, Alistair McGeorge, said on Wednesday:

"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."

Business services firm Deloitte is handling the restructuring plan.

Company partner, Daniel Butters, said:

"The retail trading environment in the UK remains extremely challenging, driven by weaker consumer confidence, the implications of Brexit and competition from online channels.

"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."

CVAs are aimed at helping not only New Look reduce costs but also protect creditors from getting less - or nothing - if the retailer's problems were to get worse.

New Look is the latest big high street name to seek help following the demise of Toys R Us and Maplin, which went into administration just a week ago.

The UK arm of the toy chain collapsed despite being granted a similar CVA in December while a number of restaurant brands, including Prezzo, have also been forced to cut back.

BHS, Focus DIY and JJB Sports have also previously used CVAs to exit loss-making stores since the post-crisis recession, although all three companies ultimately succumbed to the pressure on their finances.

Share This Story

Submit this page to reddit
Suggested articles
Stadium of Light Metro stop, train going to Airport

The race is on to supply the new Metro train fleet

Manufacturers from across the globe were in the North East today

Sunderland College Bede new site2

New apprenticeship for mental health staff

One of the UK’s largest mental health Trust is to develop the skills of hundreds of its employees with two colleges

Most read
Sunderland Owner Chairman Ellis Short

Ex-Sunderland boss Ellis Short in rumoured Network Rail bid

Ellis Short is rumoured to be in a race with other bidders.

police van sunderland

Man charged following report of a Sunderland rape

He's the second since the reported incident last month

Newer article

Red Sky Ball raises over £50,000 for poorly North East Children

Local: They wanted to give back to the ward that saved their daughter

Older article

Flood warning for the North East

Local: The Environment Agency has issued the latest alert

Top articles

Theresa May avoids damaging Brexit defeat with last-minute concession

National: Theresa May has avoided a damaging Brexit defeat in the Commons after offering a last-minute concession to placate potential Tory rebels.

Wombats frontman: 'Streaming has levelled the playing field'

Showbiz: Streaming has only brought positives to the music industry, according to the lead singer of Liverpool band The Wombats.

Cristiano Ronaldo hails 'beautiful' Portugal win over Morocco

Sport: Cristiano Ronaldo called Portugal's win over Morocco "beautiful" as his winning goal sent more goalscoring records tumbling.

Trump set to end migrant family separations

World: Donald Trump has said he will sign a decree to end family separations at the border, as the US House prepares to vote on a compromise immigration bill.

Science pupils at Derbyshire school lose track of pudding launched into stratosphere

Strange News: Is it a bird? Is it a plane? For those of you in Lincolnshire, it could well be a Bakewell pudding.

Facebook instagram logo  Twitter youtube icon   app icon 

 

 

 

 

 

 

 

Sun FM Facebook

 

Sun FM Twitter

 

 

 facebook  instagram logo twitter youtube icon

Login

Become a Sun FM VIP

Copyright Sun FM Limited 2018

Sun FM accepts no responsibility for the content of external sites.