Fashion retailer New Look's move to The Moor in Sheffield 'unharmed' by store closures announcement
Fashion retailer New Look's move from Fargate to The Moor in Sheffield city centre is believedÂ to be unaffected by the firm'sÂ plans to shut 60 of its UK stores to stave off going into administration.
The clothing chain has announced it will be closing dozens of shops around the country because of 'high rental costs' and an 'extremely challenging' retail market.
The business has entered into a Company Voluntary Agreement which is being handled by Deloitte. The arrangement allows a company to stop short of collapsing into administration.
New Look has three stores in Sheffield, on Fargate, Crystal Peaks and at Meadowhall, none of which are included in a list of 60 sites identified for potential closure.
The firm has signed a deal to move into the old Woolworths unit on The Moor as part of the third phase of the shopping street's redevelopment, due for completion in 2019. However, it is understood the CVA does not impact on this new tenancy.
About 980 of New Look's 15,300 UK staff face redundancy and rents at about 400 stores will be cut and lease terms revised. It is hoped workers can be redeployed, but the rescue plan still needs to be approved by creditors. A decision is expected on March 21.
Last month the company posted worrying results. Same-store sales were down 10.6 per cent, while its own online sales fell by 15 per cent.
Alistair McGeorge, executive chairman at New Look, said: "Given our challenged trading performance and over-rented UK store estate, we are having to take tough but necessary actions to reduce our fixed cost base and restore long-term profitability. We have held constructive discussions with our key landlords and strategic partners and will now seek creditor approval on our CVA proposal. A priority for us is to keep all potentially affected colleagues informed during this difficult time."
Daniel Butters, partner at Deloitte, said: "The retail trading environment in the UK remains extremely challenging, driven by weaker consumer confidence, the implications of Brexit and competition from online channels. It is important to stress that no stores will close on day one, and employees, suppliers and business rates will continue to be paid on time and in full."
Last week toy store chain Toys R Us went into administration, along with electronics retailer Maplin. Prezzo is also shutting 100 of its Italian restaurants nationwide.