New Look is warning that unless it receives further rent cuts, it could go bust.
The retailer has seen sales suffer amid the coronavirus pandemic and is in the process of proposing a second company voluntary arrangement (CVA).
New Look employs 12,000 people across the UK and has 500 stores.
It will be the group’s second CVA in just two years.
The retailer will propose to pay rent at 400 of its stores based on two to 12% of its turnover.
Melanie Leech, Chief executive of the British Property Federation, said that changes to retail leases must be “underpinned by transparency and fairness, not as part of an underhanded attempt to exploit a legislative loophole to simply get out of leases freely agreed and signed by both parties”.
Chief executive Nigel Oddy said in August: “Covid-19 has changed the retail environment beyond recognition, accelerating the permanent structural shift in customer spend and behaviour from physical retail to online, which we have seen in recent trading. Despite this, we still fundamentally believe the physical store has a significant part to play in the overall retail market and our omnichannel strategy.”
“However, the magnitude and speed of the shift in consumer behaviour and confidence nationwide requires a change in the way leases are structured in order to manage uncertainty so that stakeholders share both risk and upside, and to ensure continued business viability.”
The meeting date to decide on the CVA will be held on 15 September and will require a 75% vote.
