New Look CVA faces court challenge by landlords

The struggling fashion retailer has been challenged by four retail landlords including British Land and LandSec over the terms of its CVA, as originally reported by The Times.

The restructuring was agreed to last year, switching many of New Look’s stores to turnover-based rents.

Under the agreement, landlords would receive no rent on 68 of New Look’s stores for three years and as little as 2% of turnover on 402 others.

The CVA was approved last November by the “requisite majority” of 75% of creditors, which the retailer said was necessary for its survival.

Landlords are now arguing that a “bare minimum market rent” should be paid by the fashion retailer, despite the terms of the restructuring.

The court challenge also states that the switch to turnover-based rents “fundamentally rewrites” leasing agreements and three years of rent reductions is “excessive”.

New Look chief executive Nigel Oddy said at the time of approval that he hoped the CVA would provide New Look “with enhanced financial strength and flexibility, and a sustainable platform for future trading and investment”.

A New Look spokesperson said: “We are confident that the challenges will not succeed, and will be presenting our case to the court. Having gained the requisite majority support from our landlords and creditors for our CVA, we are focused on delivering our strategy and enhancing our position as one of the UK’s leading omnichannel womenswear retailers.”