New Look landlords give green light to CVA

15 September 2020

New Look gives an ultimatum to landlords

15th September 2020

In an unexpected outcome - New Look's creditors have approved its CVA proposals when put to a vote today. Creditors approved with a 75% majority vote in favour. 

The CVA features no store closures and saves all 11,000+ jobs. It looks to move more than 400 of its UK stores to turnover-based rental models, have an enhanced landlord break clause, and a three-year rent holiday on its 68 remaining stores.

14th September 2020

British Land, a landlord of New Look, owning 19 of its stores, plans to oppose its CVA proposal laid down to vote on tomorrow. Landsec, of whom own 10 stores also are believed to oppose as are Hammerson. 

The possibility that New Look's biggest landlords will vote against the plan, does not appear good for the retailer. Its chance of survival is thrown further into red.

What will the outcome be tomorrow?

6th September 2020

It is not looking promising for New Look since around ten of its landlords have been reported to of rejected its CVA proposals, to be voted on by creditors in the next 9 days. Can the table still turn? Or is liquidation coming even more unavoidable now?

26th August 2020

New Look has announced it has reached an agreement with its financial creditors. This involves investing £40m in new capital and ''significantly de-leveraging'' its balance sheet. The group expect this to be complete on or before 31 October 2020. 

The company has also announced that it is launching a CVA, so asking landlords to accept new turnover-based leases across its portfolio.

The fashion retailer also said it is launching a debt-for-equity swap on its current debts, looking to lower those from £550m to £100m.

The British Property Federation have criticised the CVA proposal due to ''inaccuracies''.

Drapers report more.

10 August 2020

According to This is Money, New Look is reported to be considering a company voluntary arrangment (CVA) since it looks to switch to turnover-based rents.

Advisors from Deloitte are expected to be appointed as soon as this week. 

If a CVA is used, this would not be the first time for the company. The retailer used one in 2018 when landlords voted in its favour as it was used to improve the operational performance of the company. 

01 July 2020

It is reported that New Look has given an ultimatum to landlords; trying to reach an agreement to move to turnover-based rents for its 500-strong store estate.

Consultancy firm, CBRE, have been hired to help with the process. If discussions with landlords are not successful, likelihood of the retailer falling into a pre-pack administration is high.

If a pre-pack is used, this would be the second financial restructuring it has undergone in less than two years, after its debt-for-equity swap with stakeholders in January 2019. At this last restructuring, New Look moved onto monthly rents for most of its portfolio and asked for rent holidays for some of its stores.

Talks with landlords have been happening for most of the month though concern rises that some will block the proposal.

A pre-pack has been discussed and is ‘’the last thing it wants.’’

A spokesperson said, ‘’We are committed to seeking a consensual agreement with landlords to move to turnover rents, and work in partnership with them as we continue to navigate these increbily challenging and uncertain times together.’’

The retailer employs 12,000 people across its UK and Ireland business.

New Look are not the first to look at a move to turnover rents amid the covid-19 pandemic. Frasers Group are the latest to be looking at doing so. Other retailers have appointed administrators as a result of the pandemic: Debenhams, Laura Ashley, Cath Kidston. Some have also refused to pay March quarterly rents.

Categories: Retail, Administration

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