Fashion retailer New Look as become the latest retailer to seek a Company Voluntary Arrangement (CVA) as it looks to negotiate turnover-based rents with its landlords.
The company, which has been in talks with it banks and investors all month, has today announced that 80% of its bondholders and 100% of the banks have agreed to seeking a CVA.
The proposal looks to protect both New Look and its landlords, says the company, including providing landlords with the opportunity to exit the lease if they believe they can secure an alternative tenant on better terms. New Look said this offers landlords maximum flexibility.
Chief executive Nigel Oddy says: “Covid-19 has changed the retail environment beyond recognition, accelerating the permanent structural shift in customer spend and behaviour from physical retail to online, which we have seen in recent trading. Despite this, we still fundamentally believe the physical store has a significant part to play in the overall retail market and our omnichannel strategy.”
But he added: “However, 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.”
The CVA meeting date is scheduled for 15 September and approval requires a vote in favour by at least 75% of unsecured creditor votes.