Modella Capital weighs up bid for New Look

A source close to Modella Capital said the private equity firm is having internal discussions weighing up whether to make an approach for the fashion chain.

The potential approach comes after New Look appointed bank Rothschild to conduct a review of the business in August, including exploring the possibility of putting the retailer up for sale, after it received a number of unsolicited approaches from potential buyers.

If a bid is made and accepted by New Look’s owners, the fashion retailer would be the latest acquisition to Modella’s rapidly growing portfolio of UK high street retailers which includes Claire’s, former WHSmith high street chain TGJones, Hobbycraft and The Original Factory Shop.

A spokesman for the private equity firm said Modella Capital wouldn’t comment on market speculation. 

New Look, which trades from around 340 stores across the UK, posted a statutory pre-tax loss of £21.7m last year – down from an £88m loss the previous year.

Retail Week revealed in May that New Look was axing up to 100 jobs across its London and Weymouth head offices as part of a business-wide restructure.

It followed a £30m cash investment from Alcentra and Brait the month before to support the retailer’s ongoing digital transformation.

The retailer’s digital business is currently driving c.40% of total group revenue, and New Look has over 10 million customers and is the no.2 womenswear retail in the 18-44 year-old market.

The fashion brand as also invested in stores this year, and opened a new concept store earlier in April in the Bluewater Shopping Centre in Kent. 

In February, New Look revealed it was pulling the plug on its Irish operations following a strategic review. The retailer blamed “several years of sustained losses and challenging market conditions” on its decision to close its 26 stores across the Republic of Ireland and make all 347 retail employees redundant.