Clothing retailer New Look could be forced to close stores as it continues to struggle against difficult economic conditions on the High Street.
The London-based company is considering a number of options to boost its financial performance as it continues to fight against online competitors.
This could amount to around 60 outlets, representing 10 per cent of New Look’s total portfolio, according to Sky News.
New Look is considering a number of options to boost its financial performance as it continues to fight against online competitors. File photo
New Look reported an 8% dip in like-for-like sales in the most recently reported period.
The firm is said to be examining the possibility of entering into a Company Voluntary Arrangement (CVA), which allows struggling retails to restructure their financial obligations to creditors.
A CVA – which requires the consent of bondholders – allows a company to pay off their debts over a fixed period of time while still remaining in business.
New Look, which has debts of more than £1 billion, was set up in 1969 and has been owned since 2015 by Brait, a South African investment firm.
Former boss Alistair McGeorge returned as its executive chairman in November and admitted changing its waning fortunes would not be an overnight job.
New Look declined to comment on the reports.
Last year, Toys R Us announced in was preparing to shut a quarter of its UK stores, with the loss of hundreds of jobs.
The toy retailer, which has been a family favourite since the 1980s, could close at least 25 of its 105 stores.
In September, the company’s US arm filed for bankruptcy protection in order to restructure debts of £3.7 billion.
The move was used as a guarantee that the retailer’s suppliers would be paid ahead of Christmas. At the time, the firm insisted that its UK stores were safe.
It has been another difficult Christmas for the High Street as online outlets continued to enjoy strong growth.
M&S and Tesco saw £1bn collectively wiped off the value of their shares as ‘Super Thursday’ – the day on which most British retail chains report their festive sales – turned out to be a damp squib.
The company reported an 8% dip in like-for-like sales in the most recently reported period. File photo
Shoppers are making fewer trips to bricks and mortar stores and looking for deals on the Internet instead, while the devaluation of sterling has increased the cost of sourcing stock.
While supermarkets generally enjoyed robust food sales, it was otherwise volatile with many clothing chains resorting to heavy discounting to offset tougher trading.
A profit upgrade from Next and contrasting earnings alert from Debenhams last week set the scene for a mixed performance and the latest clutch of sales reports show it was by no means a jolly Christmas for all.