Will New Look close up to 60 stores?

New Look is said to be planning to axe up to 60 of its UK stores as the environment for British fashion retail remains tough and the chain proves to be one of the most prominent sufferers from lacklustre consumer sentiment.

That many closures would add up to around 10% of its UK store estate after the company has opened a large number of stores in recent years.

It hasn’t confirmed its intentions but following news that it has abandoned plans to move to an expensive new HQ in London’s King’s Cross, news media reported that store closures are being actively considered.

The South African-owned chain is believed to be working on a Company Voluntary Arrangement (CVA) that would allow it to exit some leases, sources told Sky News. However, the sources also said that this is just one of several options being looked at.

As well as store closures, a CVA would also likely see New Look seeking rent reductions for remaining stores.
Some kind of action is quite urgently needed for the retailer as it faces up to ongoing sales falls and a retail sector that isn’t getting any easier.

Quite a few UK names have reported tough trading over the Christmas ad New Year period and while we don’t know how bad (or good) New Look’s trading was, it most recent set of results included news that UK comparable sales had fallen 8%.

New Look’s problems stand out because, in general, lower-price specialists like this one have won out over middle-market fashion stores in recent months. But the chain has been unable to tap into that trend and said it made fashion missteps last year. Its woes led to a change of management and an admission that fixing things wouldn’t be a fast or easy process.

Will New Look close up to 60 stores?

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