British fashion retailer New Look’s company voluntary arrangement (CVA) proposal has been turned down by some of its rebellious landlords.
The landlords do not seem to be in any mood to approve CVA that proposes to shift the rent system to turnover basis at most of its UK stores.
In fact, the rejections happened following The British Property Federations’ criticism of New Look for lot of inaccuracies in the CVA proposal.
More on this, Melanie Leech, Chief Executive, British Property Federation, averred “CVAs shouldn’t be about permanently ripping up leases – they are supposed to be a temporary measure, as part of a wider rescue plan, to get a business back onto its feet.”
The retailer’s CVA proposes changing 402 leases to a turnover percentage of up to 12 per cent and the remaining 68 stores moving to zero rent.
Reportedly, around 10 of company’s landlords, which also included some big shopping centre owners, outrightly rejected the plan which will now be voted by the creditors on 15 September (Tuesday).
The approval will require vote by at least 75 per cent of unsecured creditors.
There are reports that if this doesn’t work, and if no buyer comes forward, the retailer will be left with no choice other than liquidation.
New Look, which sells womenswear, menswear and dresses for teens, has been owned since 2015 by investment firm Brait SA.