UK fashion retailer New Look has announced a plan to close 60 stores in a bid to avoid going into administration, according to BBC News.
The fashion chain’s rescue Company Voluntary Agreement (CVA), which is subject to approval from creditors, would see around 980 workers lose their jobs out of the total workforce of 15,300. Rents would be reduced at 400 stores.
New Look chairman Alistair McGeorge said the changes were ‘tough but necessary’ and that employees would be moved to roles in other parts of the business.
According to McGeorge, the ‘over-rented UK store estate’ was a key problem for the retailer and negotiations with landlords had resulted in agreements that could reduce the clothing store’s fixed cost base, boosting profits.
Daniel Butters of Deloitte, who is handling the CVA, said: “The retail environment in the UK remains extremely challenging, driven by weaker consumer confidence, the implications of Brexit and competition from online channels.
“New Look is an iconic brand on the high street and the Company Voluntary Agreement will provide a stable platform upon which management’s turnaround plan can be delivered.”