New Look boss looks to the future after winning landlord legal battle

The high court ruled in favour of the fashion brand on Monday after a number of its landlords had challenged the company voluntary arrangement it had agreed in September 2020. 

The CVA proposed switching 402 of New Look’s stores over to turnover-based rents and was backed by the majority of creditors at the vote last year, but a number of disgruntled landlords subsequently decided to launch a legal challenge against it. 

As part of the disputed CVA, a further 68 New Look stores would be charged no rent at all, enhanced landlord break clauses to terminate leases and allowed the retailer to access £40m in new working capital. 

Disgruntled landlords had argued that the terms agreed in the CVA went beyond the jurisdiction of the insolvency procedure as set out in law, as what the retailer was asking for was too complex. 

However, the challenge was knocked down in court, and New Look chief executive Nigel Oddy says the ruling will allow the retailer to rebuild. 

“We are pleased that the court has ruled in our favour and would like to take this opportunity to thank our people, our landlords and all our creditors for their ongoing support.”

“With the court hearing now behind us, we are able to focus on delivering our strategy and enhancing our position as one of the UK’s leading omnichannel womenswear retailers. With all our stores around the UK now open and the Republic of Ireland reopening on May 17, we are delighted to be able to once again serve our customers face-to-face, and we can look to the future with confidence.”

Law firm Irwin Mitchell restructuring and insolvency partner Doug Robertson said: “Had the jurisdiction challenge been successful, it would have placed limits on the aggressive use of CVAs and shifted such compromises into the restructuring plan market.  

“This decision retains the use of a CVA as a tool in complex, differential compromises and arrangements and is in line with increased emphasis on providing debtor protection to enable it to restructure its affairs with a view to financial recovery.”