Boohoo circles New Look as it lurches towards administration

Boohoo circles New Look as it lurches towards CVA

Boohoo is reportedly looking to swoop in on New Look if its CVA proposal is rejected by creditors and it falls into administration instead.

According to The Sunday Times, the online retail giant would buy the New Look brand and shut down its portfolio of more than 400 stores.

Boohoo has already struck similar deals in the past year by acquiring Karen Millen, Oasis and Warehouse after they collapsed – while ditching their stores in the process.

For now, New Look’s future relies on the support of creditors supporting its CVA proposal after a sale process failed to attract bids from potential buyers.

The fashion retailer had canvassed interest in a sale of the business last month in conjunction with a CVA proposal in a bid to secure its future after the coronavirus pandemic led to a dramatic plunge in sales and footfall.

In order for the CVA to go ahead, at least 75 per cent of creditors – which includes landlords – need to approve it when they meet to vote on it on Tuesday this week.

The CVA proposal entails switching more than 400 of its UK stores to a turnover-based rent model and a three-year rent holiday on its 68 remaining stores. No store closures are planned.

However, landlords are already resisting the proposal and questions have been raised as to whether the CVA would achieve the minimum votes it needs.

Should it succeed, it would become New Look’s second CVA in two and a half years.

While the retailer has hinted it would go into administration if the CVA is rejected, a source speaking to The Sunday Times said New Look pursuing a deal with Boohoo would only be a last resort.

Boohoo, which also owns PrettyLittleThing, MissPap and Nasty Gal, would not comment on the speculation.

Read the full article here – retailgazette.co.uk