landlords

New Look appeals for landlords to back last-ditch rescue

New Look shop
New Look shop

New Look has warned it could collapse if landlords do not agree to a controversial restructuring deal to allow it to pay cheaper rents.

The retailer sounded the alarm after financial advisers at Perella Weinberg failed to find a buyer for the whole business as part of a separate process to help steady the ship.

The chain’s future is contingent on landlords approving a so-called company voluntary arrangement (CVA) to pay rent on its 496 shops based on revenues for each site.

If the process is successful, it will safeguard 12,000 jobs and help New Look wipe out £440m of debt. Otherwise it will have to consider “less favourable alternatives”, it said.

Its fate will be decided on Sept 15, two years after it went ahead with another CVA. At the time, it won the approval of almost all creditors and landlords but was forced to make

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Shop landlords face ‘reckoning’ over COVID-19 impact

People wearing face masks walk past a sale sign on Oxford Street in London. Photo: David Cliff/NurPhoto via Getty Images
People wearing face masks walk past a sale sign on Oxford Street in London. Photo: David Cliff/NurPhoto via Getty Images

Wednesday (24 June) marked the second quarterly rent day of the year for shops in the UK.

Quarterly, rather than monthly rents, are a British peculiarity dating back to a time when landlords used to drive a horse and cart around their properties to collect rents. Takings this quarter are likely to be historically light.

Retail landlords collected only around 50% of rents due in the first quarter of 2020, according to the British Property Federation, and the collection is expected to be even lower this time around.

“I can see it being historically low — I could see 10-15% of rent paid,” Jonathan De Mello, executive director of retail property adviser Harper Dennis Hobbs, told Yahoo Finance UK.

Saturday afternoon shoppers at Oxford Circus in London. Photo: David Cliff/NurPhoto via Getty Images
Saturday afternoon shoppers at Oxford Circus in London. Photo: David Cliff/NurPhoto
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