Debt-laden fashion retailer New Look has embarked on a property review as part of its turnaround as the search for a new chief executive gets under way.
Group property director Richard White, who joined the business in February, has begun a review of the 604-store estate in the UK. He has hired property adviser CB Richard Ellis to analyse the future of its stores, which range in size from 600 sq ft to 30,000 sq ft.
New Look has struggled following a dire trading period last year, with its pre-tax profits wiped out. It made a £36m profit the year before.
Earlier this year Alistair McGeorge was drafted in as executive chairman amid a management shake-up, and Tom Singh, who founded New Look in 1969 and still holds a 22.4 per cent stake, returned. Mr McGeorge kicked off a strategic review in June and headhunters are this month being sought to identify a new chief executive.
The property review is part of New Look's plan to improve the business and reduce costs. Mr White said: "Everything is being reviewed, analysed and changed. There will be a new store refit to ensure we have a flexible store design that works in all our sizes of stores. We will look at the entire network of stores and at how to use the space we have, better."
New Look began opening stores across the UK in the 1970s. But, as shopping patterns have changed, many of its older shops are now the wrong size or in the wrong location.
The chain has started discussions with landlords on leases that are coming to an end. New Look has proposed to close some locations unless landlords can offer rent-free deals; it would pay just rates and service charges. In some cases it has offered to pay a percentage of that store's turnover.
Mr White added that where some of its stores are too big, it is looking at options to sublet space to concessions and other retailers.
New Look is one of a number of retailers planning to reduce store numbers by predominantly focusing on larger stores in fewer locations. Next and Sir Philip Green's Arcadia have been operating this strategy for some time.
Sir Philip has said he is closing 300 stores when leases come to an end and will move some of his Arcadia brands, such as Dorothy Perkins and Burton, into Arcadia's Bhs stores.
New Look will be keenly watched by Mary Portas, who was asked by the Government in May to lead an independent review into the future of the high street. Ms Portas said at the time: "With town centre vacancy rates doubling over the past two years the need to take action to save our high streets has never been starker."
Liz Peace, the chief executive of the British Property Federation, said: "The issues facing our high streets are extremely complex, with recession, structural changes caused by the internet and consumer preference all in play.
"In times of change it is important that leases adapt. Landlords are increasingly flexible with leases that are shorter, offering breaks and substantial rent-free periods."
New Look's net debt stood at £1.035bn earlier this year. Its private equity owners, Apax and Permira, who hold 27 per cent each, withdrew plans for a £1.8bn flotation in 2010.
New Look is also thought to be planning to boost its online sales by introducing more brands.