New Look landlords challenge CVA as retailer faces new national lockdown

New Look British Land Land Securities CVA

New Look landlords have challenged its CVA proposals, placing fresh doubt on the fashion retailer’s chances of survival.

British Land and Land Securities are among the landlords that have challenged the CVA, which was approved by creditors in September.

However, the statutory challenge period ran until the middle of October.

Three sources with knowledge of the process said that there had been four separate challenges.

One source said the challenges only constitute a only small proportion of the company’s 350 or so landlords.

However, many of them were irked by the challenge because it would hold up the repayment of service charge arrears that accrued during the lockdown of non-essential retailers in the UK in March.

New Look also now has to contend with a four-week second national lockdown in England from November 5.

The CVA paves the way for a financial restructuring of the company, which has almost 500 stores and employs more than 12,000 people.

Any material delay to that recapitalisation, which entails bondholders taking heavy losses on their investments, could leave New Look with financial difficulties.

The fast fashion retailer underwent a restructuring process in 2018, closing down overseas operations and overhauling its product offering.

It did not seek to close more shops through its latest CVA, but asked landlords to agree to rents based on a percentage of sales at more than 400 outlets.

In return, it offered them enhanced rights to take back stores to re-let to other tenants.

New Look said it was “confident that the challenges will not succeed”.

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