UK retailer New Look to shut 60 stores, a loss of 1,000 jobs as economy tanks
Up to 980 jobs are being axed at retailer New Look under plans to shut 60 stores and slash rent on nearly 400 shops as part of a rescue deal, the company said.

The company has asked creditors for a Company Voluntary Arrangement (CVA) which will allow it to continue trading while cutting costs such as high rent bills.

Comment: 'High rent bills'? The cost of rent hasn't changed much in the last few years so obviously it's because they're struggling. Imagine someone renting their home asking for a rent cut.

It is the latest high street chain to face difficulties with more than 5,000 retail jobs under threat with the demise of Toys R Us UK and Maplin.

It said the closures would lead to redundancies, with up to 980 jobs out of its workforce of 15,300 under threat, although it said it would look to redeploy staff where possible.

Its rescue plan will also see the group ask landlords to slash the rent and revise leases on 393 stores across the UK.

Alistair McGeorge of 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.

'New Look is an iconic brand on the High Street and the CVA will provide a stable platform upon which Management's turnaround plan can be delivered. We have fully engaged with the British Property Federation and its members and their views are reflected in what we believe is a fair proposal to restructure the property obligations of the company.

'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.'

Hannah Maundrell, Editor in Chief of said: 'It's sad but not surprising New Look are closing stores - it will be yet another sad loss to many high streets. It's no secret New Look have been struggling for a while and all eyes have been on the clothes retailer in the current economic climate. With so much shop floor rent eating through profits, they simply can't justify having physical shops anymore.

Comment: Online shopping has changed the way people shop but the main driver is that, particularly since the financial crash in 2008, increasingly people have less and less disposable income: UK: Fifth of workers still earning below 'real' living wage

'The pattern of well loved stores filing for administration or cutting jobs over the last few weeks is terrible news for the UK's high streets. Inflation, lack of rises in wages and shoppers demanding bargains has resulted in the perfect storm and high streets up and down the country are turning in to ghost towns. Retailers who are only trading online are always going to win without the extra staffing costs of expensive stores to upkeep.

Comment: That online retailers will always have the upper hand his isn't necessarily true since many shoppers prefer to see the product, try on multiple sizes, they don't want to pay shipping or returns and they want it that day, particularly when it comes to cheap clothing - all of which are costly for online retailers.

'It's undoubtedly distressing news for employees of New Look and their families especially because their fates with the business are currently uncertain. Now is the time to check what redundancy rights you have and dig out any income or mortgage protection policies you hold just in case.'

The administration of the two retailers, a form of creditor protection, highlights the grim state of the UK high street, with other well-known brands also trying to restructure.

Weak consumer sentiment, a boom in online-focused outlets and currency swings due to Britain's vote to leave the European Union have all hurt the margins of shops and restaurants.

Comment: They can try to blame Brexit all they like but the US is seeing an equally dire future and it isn't facing Brexit; this financial crash is happening all over the Western world:

The collapse of the two chains put over 5,000 jobs at risk, and Maplin blamed adverse economic factors for its collapse.

'The business has worked hard over recent months to mitigate a combination of impacts from sterling devaluation post Brexit, a weak consumer environment and the withdrawal of credit insurance,' Maplin CEO Graham Harris said in a statement.

'This necessitated an intensive search for new capital that in current market conditions has proved impossible to raise. These macro factors have been the principal challenge.'

Harris said he believed that Maplin had a place on the high street, and that Maplin stores would stay open as the firm worked with administrators PWC to achieve the 'best possible outcome' for stakeholders.

The administrator of Toys R Us UK said it was making every effort to secure a buyer, but added that while its stores would stay open for now, it was undecided whether some or all of its shops would eventually close.

Other brands are facing difficulties. Sky News reported that Italian restaurant chain Prezzo plans to close up to a third of its 300 outlets.

Comment: This would imply that people are eating out less or getting a more affordable takeaway meal; can we blame Brexit or online shopping here?

Department store House of Fraser has asked landlords for rent reductions while Byron hamburgers said in January it had agreed to restructure through a company voluntary arrangement with creditors.