New Look’s landlords have approved its Company Voluntary Arrangement, paving the way for the retailer to shutter 60 stores.
Almost all (98%) of creditors voted in favour of the arrangement.
The closures will result in around 980 redundancies, although the retailer has said that it will try to redeploy staff elsewhere. Stores will close in 6-13 months’ time.
Another 393 stores will see their lease terms revised and rent reductions of between 15% and 55% for the next three years.
New Look, which launched the Company Voluntary Arrangement (CVA) earlier this month, has been struggling with structural market changes, over expansion and high levels of debt.
Group revenue fell 6.3% year-on-year in the 39 weeks to December 23, exacerbated by a 10.7% slump in UK like-for-like sales.
The retailer’s loss after tax stood at £123.5m, while group like-for-likes declined 10.6% and its own website sales plummeted 15%.
Read more: Will 2018 be the year of the CVA?
New management is currently trying to engineer a strategy and claim that, under former chief executive Anders Kristiansen, the business veered too far into fast fashion territory.
Previous chief executive Alistair McGeorge has returned to the helm to push a less fashion-forward, more democratic aesthetic, designed to appeal to women between the ages of 20 and 40.
McGeorge said: “In order to help restore long-term profitability, it is clear we need to reduce our fixed cost base. We are therefore pleased to have gained the support of our creditors to address our over-rented store estate. Launching a CVA has been a tough decision and our priority remains keeping all potentially affected colleagues informed during this difficult time.
“The CVA is one of a number of necessary actions we are taking to get the company back on track. In addition to implementing other cost-saving initiatives, we are already focusing on driving future full price sales by realigning our pricing to offer significantly better value, adding flexibility to our buying model, and improving our speed to market.
“New Look is a great brand and today represents another important step in helping to rebuild our position within the UK market.”
A raft of businesses have recently launched or considered launching CVAs. Carpetright is currently exploring whether to launch a CVA while Toys R Us – which is now in the midst of shutting all its stores – went through the process before Christmas.