Some New Look landlords will reject CVA - report

By

Sandra Halliday

Published
Sep 7, 2020

​New Look could struggle to achieve the level of support it needs for its company voluntary arrangement (CVA) with some of its landlords having decided to reject its plan already, a press report claims.

The Mail on Sunday said at the weekend that up to 10 of the company’s landlords had rejected the CVA proposals. 

The company needs to get 75% approval at a vote on September 15. If the CVA doesn't go through, there's speculation that it could mean liquidation for the company as the last resort. Its CEO Nigel Oddy has already said the steps it’s taking have come from “absolute necessity”.

Meanwhile, Retail Week reported on Monday that some landlords are unhappy about a lack of transparency over sales at individual stores.

The company wants to switch to turnover-based rents at the majority of its shops and landlords say that in order to be able to assess the workability of this option they need to know what the turnover has been at individual locations.

But the report said the company “is not freely offering individual store sales data” to help landlords make informed decisions about whether to support the CVA proposal.

One source told the trade paper: “We aren’t averse to a change in the leasing model. Nor are we blinded to the facts of our high streets. But where those changes are needed, agreements need to be reached through consensual negotiations. New Look isn’t offering individual store turnover data voluntarily. We’re being made to go to them and ask for it. That shouldn’t be how it works.”

The report also said that there’s inconsistency on what the retailer is asking for given that where information has been made available, some stores with low turnover would be on a higher rental percentage than others and vice versa.

This is in addition to landlord fears that the switch to rents based on turnover could end up becoming a permanent fixture for New Look and that other retailers would expect the same treatment.