- Angela Gonzalez-Rodriguez |
The British retailer continues to explore every possible way to reduce costs and maximise efficiencies in order to put out rising financial woes. Online sales fell by more than 10 percent in the weeks before Christmas.
British media reported Monday that New Look would be preparing to meet property owners amid plans for rent reductions and store closures as it faces increasing debts. New Look wrote to landlords on Friday informing them that the company's finance director, Richard Collyer, would be meeting with them over the next few days, reported over the weekend the ‘Sunday Times’.
New Look continues exploring new ways to battle weak results and poor financials
Another measure thought to be on its way is reducing the retailer’s commercial network. Sources close to the matter said the company would be closing 60 out of their 600 stores in the UK. The company is thought to be exploring an enhanced online presence.
Earlier in February, New Look said its sales plunged in the lead-up to Christmas as it offered heavy discounts to shoppers. For the 39 weeks to 23 December, total group revenue fell 6.3 percent to 1.1 billion euros, what implies a 10.6 percent in comparable sales. Meanwhile, web sales also decreased, going down by 15 percent.
The company is now considering its options, and may ask landlords for rent reductions as part of a company voluntary agreement (CVA). The pressure on New Look is mounting as credit insurers reduced their cover on goods. Besides, bondholders of New Look have appointed Rothschild investment bank to protect their interests in case the financial struggles the company is going through got worse.
The market expects the troubled retailer to report continued losses and falling sales when it publishes a trading update this week, reported the ‘Sunday Times’, potentially forcing suppliers to ask for upfront payment for goods.