Advertise with fastmoving.co.za
 
 

British fashion retail chain New Look has sought approval from its creditors to cut 980 staff and close more than 60 stores after performing poorly as it seeks to amend the terms of its debt.
British fashion retail chain New Look has sought approval from its creditors to cut 980 staff and close more than 60 stores after performing poorly as it seeks to amend the terms of its debt.

New Look plans store closures and layoffs

INTERNATIONAL NEWS

By Dasha Afanasieva and Tiisetso Motsoeneng - Mar 8th, 11:43

British fashion retail chain New Look has sought approval from its creditors to cut 980 staff and close more than 60 stores after performing poorly as it seeks to amend the terms of its debt. 

In a statement, the company, which opened its first store in 1969 and is owned by South African investment heavyweight Brait, said it had identified 60 out of its total 593 stores in Britain for potential closure, as well as a further 6 sites which are sub-let to third parties.

“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,” Executive Chairman Alistair McGeorge said.

New Look’s woes are another headache for South African businessman Christo Wiese, the biggest shareholder in Brait, after a share price crash in Steinhoff International stripped him of his billionaire status.

Wiese backed Brait’s bet on the British consumer in 2015 in a 1.9 billion pound ($2.64 billion) deal that put the South African investment heavyweight in the middle of a crowded high street competing with fast-growing online rivals such as ASOS and Boohoo.

Brait wrote down the value of the business to zero in November until its “turnaround strategy has taken shape”, adding that it remained a committed long-term shareholder.

Tough trading conditions in Britain last week pushed high-profile retailers Toys R Us UK and electronics chain Maplin into administration, a form of creditor protection, putting over 5,000 jobs at risk.

New Look’s company voluntary arrangement proposal also includes a reduction in rental costs and revised lease terms across 393 stores.

As a result of the shop closures, a maximum of 980 people out of a staff base of 15,300 in Britain will be made redundant, the company said, adding that all efforts will be made to redeploy staff within the business.

All British stores will remain open as normal during the period of the proposal, until March 21, and New Look’s online sales channel will be unaffected.

Earlier in March, IFR reported that the British retailer was seeking to amend the terms on 1.2 billion pounds ($1.66 billion)of debt.

In February New Look said its earnings and revenue fell in the three quarters to December as it implemented a turnaround strategy after struggling to compete in the British market.

Prior to Brait, Permira and Apax held the asset for over a decade, an unusually long period for buyout funds.
Reuters 

Read more about: retailer | retail | new look | fashion | christo wiese | brait

Related News

Clicks CEO to retire after 13 years at the helm
21/09/2018 - 10:36
Clicks Group CEO David Kneale is retiring after 13 years at the helm of the retail and healthcare group.

Overcoming financial planning challenges in retail
21/09/2018 - 09:47
South African retailers face numerous macroeconomic, socio-economic, political, and operational challenges. In a world where finance departments are driving to be business partners inside the organisation, the ability to facilitate relevant operational and financial plans is as necessary as having products on the shelf.

Tesco unveils new discount chain Jack’s
20/09/2018 - 14:08
British supermarket group Tesco has thrown down the gauntlet to German discounters Aldi and Lidl by launching what it says will be the cheapest store in town – Jack’s.

SA consumers taking full advantage of retail reward programmes
20/09/2018 - 11:19
Consumers have saved billions of rand in offered loyalty programme rewards and are increasingly taking advantage of reward points as the country’s tough economic climate impacts on consumer goods such as fuel, electricity and food.

Personalised customer experience enhances in-store value
20/09/2018 - 10:47
Being able to effectively utilise the data at the disposal of South African retailers - using sophisticated technology - will be fundamental to remaining competitive with personalised in-store customer experiences.