New Look seeks three-year rent holiday to survive
New Look has asked its landlords for a three-year rent holiday for 68 stores and for rent to be based on turnover at more than 400 others as the fashion chain battles to survive.
The retailer proposed paying up to 12% of turnover as rent at 402 stores and for its remaining 68 outlets to pay zero rent under a company voluntary arrangement. It said the proposal would align rent with the company's performance and the wider retail market.
New Look it needed the CVA, its second rescue deal in 18 months, to stay afloat and save more than 11,200 jobs. It said an agreement with bondholders and other lenders to turn debt into equity and inject £40m of cash into the business depended on the CVA being approved.
The group said its proposal included more freedom for landlords to break leases if they can find a better tenant. Service charges will not change and New Look will settle service charge arrears, the company said.
Retailers are battling to survive as shoppers buy online, stay away from crowded places and tighten their belts during the Covid-19 crisis and the deepest recession on record. The crisis is also hitting commercial landlords as tenants shut or demand rent reductions to cut costs.
Nigel Oddy, New Look's chief executive, said: "We are launching this CVA out of absolute necessity The magnitude and speed of the shift in consumer behaviour and confidence nationwide requires a change in the way leases are structured in order to manage uncertainty so that stakeholders share both risk and upside, and to ensure continued business viability."
Landlords and other creditors representing at least 75% of the company’s debts must approve the CVA at a meeting on 15 September.