Thu, 10 Sep 2020 | BUSINESS NEWS
Fashion retailer New Look has increased pressure on landlords to accept a restructuring deal, after failing to attract a buyer. The company said that while there had been some interests in certain of its assets, no bid was received.
After not finding a buyer or alternative investor, the company’s hedge fund owners Brait are seeking to enter a company voluntary arrangement (CVA), which would see its 496 UK stores move to turnover-based rents. The company had previously warned, in June, that it might launch a pre-pack administration if landlords did not agree to turnover-based rents.
If this deal is agreed, the owners have said that they will invest £40 million in New Look through a debt-for-equity swap. The capital injection is part of a recapitalisation that New Look has agreed with banks and bondholders, which also includes a debt-for-equity-swap that would cut its debt from £550 million to £100 million.
The recapitalisation would also decrease interest costs and secure an extension of working capital. New Look’s Chief Executive Nigel Oddy has said that the recapitalisation “can only be delivered if we secure the support of our landlords for our forthcoming CVA”. The company has said that the CVA is an “absolute necessity” if it is to safeguard its 11,200 jobs.
However, it is thought that around a dozen of New Look’s landlords are resisting the CVA, which would be the company’s second in three years.
In a statement the company said: “If unsecured creditors do not support the company’s CVA, the directors of the company will have to consider less favourable alternatives than the current transaction for the Group’s stakeholders including its creditors (including those unsecured creditors), customers and employees”.
A vote on the deal will be held on September 15 and requires 75 per cent backing from creditors in order to pass. It is understood that more than half of New Look’s 350 landlords will need to back the deal.
The company has seen its problems exacerbated by the COVID-19 pandemic, with stores forced to close for months during lockdown and shopper numbers down 40 per cent on last year’s levels since stores were allowed to reopen.
View the latest distressed UK businesses here.
The premises are of a good size and situated in a prime location on the high street. The shop is entered from the front and has a service counter to the left and four very large fridges to the right. The very large shop currently has long rows of sto...
LEASEHOLD
For sale is a convenience store and newsagents located within a busy area of Cheshire. The convenience store is a one-stop-shop for all basic necessities including snacks, drinks, home products and also stocking National Lottery tickets that have pro...
LEASEHOLD
A superb opportunity to acquire an established and busy Post Office and convenience store with accommodation. Situated on a busy main road in a densely populated suburban area with local shops in the immediate area
FREEHOLD
Please choose your settings for this site below. For more information please read our Cookie Policy
These cookies are necessary for our website to function properly and provide you with access to all features.
These are analytics cookies that help us to improve the way our website works.
These are used to improve the functional performance of the website and make it easier for you to use.