New Look, the struggling British fashion retailer, is on the brink of administration as its creditors meet today (15 September) to vote on company voluntary arrangement (CVA).
The retailer’s future will depend a lot on what creditors do today. If the CVA proposal gets disapproved by the creditors, there wouldn’t be too many options left for the retailer other than falling into administration.
British e-commerce firm Boohoo is already eyeing to buy New Look if the latter falls into administration.
As per the media reports, Boohoo, in case of CVA rejection by creditors, would acquire New Look and close down latter’s over 400 stores.
That’s not new for Boohoo! In recent times, the online fashion retailer had bought clothing labels like Warehouse and Karen Millen and immediately discarded their bricks-and-mortar stores.
But all eyes are now on what happens today!
The CVA proposal talks about shifting of over 400 New Look stores to turnover-based rent system in addition to 3-year rent holiday on rest of its 68 stores.
The creditors have been expressing displeasure over the proposal for some time and therefore there are doubts if the CVA would get the minimum required votes.
For a CVA to be approved, at least 75 per cent of creditors – also comprising landlords – need to give it a green signal.
Around 10 of New Look’s landlords have already dismissed the plan and one is not sure how Tuesday turns out to be for the retailer.
Watch this space for more on the developments!