New Look set to shut 60 stores putting close to 1,000 jobs at risk

Retailer said that it would try to redeploy affected staff and stores will remain open, at least until 21 March

Last month the company posted a pre-tax loss of £123m for the three-month period to the end of December

New Look has become the latest high street retailer to fall victim to tough trading conditions, announcing on Wednesday that it plans to shut 60 stores which could cost almost 1,000 jobs.

The group said that it was looking to shutter almost 10 per cent of its more than 590 UK stores. A further six sites that are sub-let are also due to close, under a so-called company voluntary agreement (CVA), frequently used by businesses to avoid going into administration.

New Look currently has a workforce of 15,300 and the move will put 980 jobs at risk. If approved, the CVA will also see rents slashed and leases revised.

"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," Alistair McGeorge, executive chairman of New Look, said.

The retailer said that it would try to redeploy affected staff and that stores would remain open, at least until creditors vote on the proposed CVA on 21 March.

Like other high street retailers, New Look has been battling tough trading conditions, made worse by the surging popularity of online retailers.

Last month the company posted a pre-tax loss of £123m for the three-month period to the end of December 2017.

“2018 has so far been a brutal year for bricks and mortar retailers as footfall on the high street continues to fall amid the continued rise of internet shopping revolution,” said Fiona Cincotta, senior market analyst at City Index. “New Look is just the next in line of a growing list of retailers falling victim to the brutal changes in shopping habits.

Earlier this month both Toys R Us and Maplin collapsed into administration, putting close to 5,000 jobs at risk. Several restaurant chains have also been forced to restructure and cut jobs, partially as a result of inflation squeezing consumer spending power and confidence, but also a rise in business rates and minimum wages.

"The retail trading environment in the UK remains extremely challenging, driven by weaker consumer confidence, the implications of Brexit and competition from online channels,” said Daniel Butters, a partner at Deloitte, the professional services firm which is handling the New Look CVA.

"New Look is an iconic brand on the high street and the CVA will provide a stable platform upon which management's turnaround plan can be delivered," he added.

Additional reporting by news wires