New Look has kick-started a consultation with its bondholders in the clearest indication yet that it will launch a company voluntary arrangement (CVA).
The embattled fashion retailer has written to bondholders to request changes to their terms which, if agreed, would pave the way for a potential CVA.
It is currently unclear what amendments New Look has asked for from its bondholders.
Sources close to the situation told Retail Week that discussions with bondholders and landlords had been “supportive” so far.
However, New Look wants certainty that any CVA would secure approval from the required 50.1% of bondholders before it pursues that route.
A New Look spokeswoman said: “The company has previously indicated that a potential CVA is being considered as part of a range of options to improve the operational performance of the business.
“No final decision has been made regarding a CVA, which would require consent from our creditors.
“The company is today requesting permission from bondholders to make changes to the terms of its secured bonds to facilitate a CVA proposal as it evaluates this option.”
Nosediving sales
New Look has suffered a torrid period of trading as it battles to compete with the likes of H&M, Zara and Primark.
The retailer suffered a 10.7% nosedive in like-for-like sales during the 39 weeks to December 23, as its losses swelled to £123.5m.
New Look has drafted in former boss Alistair McGeorge for a second stint at the helm in a bid to revive its fortunes, following the exit of Anders Kristiansen last September.
McGeorge is focusing his turnaround efforts on installing a less fashion-forward, more democratic aesthetic, designed to appeal to women between the ages of 20 and 40.
He insisted earlier this month that he could “restore operational stability to this business” and help New Look rediscover its “broad appeal”.
No comments yet