A number of stores in the North West are under threat after New Look announced it would be looking to shut 60 shops across the UK, although analysts have warned the closures “will not be enough” to turn its fortunes around.
The retailer has announced it will be looking to close four stores in the North West.
These are shops its men’s clothing store in Bolton and Wigan, and two stores in Rhyl and Stockport’s Merseyway Shopping Centre. The 1,970 sq ft unit in Wigan’s Grand Arcade was only opened in 2015 as one of New Look’s flagship menswear stores.
The company stressed that these stores would remain open while a consultation process was ongoing, and that employees, suppliers, and business rates “will continue to be paid on time and in full”.
The move is part of a company voluntary arrangement which outlines 60 of its 593 UK stores for potential closure, as well as a reduction in rental costs and revised lease terms across 393 stores.
This is expected to result in the loss of 980 jobs, out of a total employee base of 15,300 people. New Look will seek creditor approval for the plans on 21 March 2018, and Deloitte has been appointed as nominees of the CVA.
Alistair McGeorge, executive chairman of New Look, said: “Given our challenged trading performance and over-rented UK store estate, we are having to take tough but necessary actions to reduce our fixed cost base and restore long-term profitability.
“We have held constructive discussions with our key landlords and strategic partners and will now seek creditor approval on our CVA proposal. A priority for us is to keep all potentially affected colleagues informed during this difficult time.”
The retailer’s move follows a nine-month pre-tax loss of £123.5m, as like-for-like sales in the UK fell by nearly 11%.
However, Charlotte Pearce, retail analyst at GlobalData, said the move was “not enough” and that the retailer would need to “continue to rationalise its remaining oversized store network”.
“While the closure of stores will lead to market share loss in the short term, it is a long awaited and necessary move.
“A leaner store estate will improve space productivity, increase profit per store and provide a more consistent brand image, which is much needed for the retailer’s survival’’.