New Look has caught the eye of distressed investment specialist Alchemy Partners.

Alchemy is considering the purchase of some of New Look’s bonds, which have been trading for as little as 20p in the pound, The Sunday Times reported.

Alchemy previously traded New Look’s bonds in 2013, and is acquainted with New Look boss Alistair McGeorge, who rejoined the retailer at the end of last year to lead a turnaround.

New Look’s like-for-likes slid by almost 11% in last year’s final quarter.

McGeorge partly blamed fashions that had become “too young and edgy” under former New Look boss Anders Kristiansen. McGeorge is considering the closure of about 60 of New Look’s 600 UK branches.

New Look has also been caught up in the accounting scandal at Poundand owner Steinhoff. New Look is owned by private equity vehicle Brait, whose biggest shareholder Christo Wiese is also Steinhoff’s largest investor.

Concerns about Steinhoff contributed to a reduction of cover for New Look by credit insurers such as Euler Hermes.

McGeorge has said that New Look has sufficient liquidity to meet bond repayments, but some bondholders have drafted in investment bank Rothschild to advise on a possible debt-for-equity swap.