New Look rents to be determined by sales
British fashion retailer New Look has been granted approval for its stores’ rents to be determined by sales earnings, after the struggling company sought to protect jobs of some 11,000 employees.
As reported by the BBC and others, a company voluntary arrangement (CVA) means that landlords must accept a percentage of their respective shop’s turnover instead of a fixed amount of rent. This, New Look said, reflects the wider covid-hit market.
British Property Federation has criticised the decisions saying CVAs were intended to be short term. The process was wrongfully allowing businesses to, as the federation's chief executive Melanie Leech, was quoted saying: “rip up leaves permanently”.
Nigel Oddy, chief executive officer of New Look, who thanked landlords and creditors for their support of the CVA, said in a statement that the agreement would “provide us with enhanced financial strength and flexibility, and a sustainable platform for future trading and investment.”
He said he “fundamentally [believes] the physical store has a significant part to play in the overall retail market and our omnichannel strategy” and that he’ll work with landlords and creditors to “navigate the uncertain times ahead together”.
