New Look has secured support for a restructuring plan that safeguards thousands of jobs.
The fashion retailer said the so-called company voluntary arrangement (CVA) achieved the required backing from landlords and other creditors at a crucial vote.
It had earlier warned that “less favourable alternatives” – understood to include liquidation – would have to be considered without enough backing as the sector battles the effects of the coronavirus lockdown that shuttered its 490 UK stores.
Image: This was New Look’s second CVA vote in three years
Where jobs have been lost in the UK economy
Where jobs have been lost in the UK economy
Sky News had revealed on Monday that a number of its major landlords were to vote against the proposals, stoking fears that the CVA could fail.
Commercial property companies which, like retailers, have suffered from COVID-19 restrictions on their tenants argue they are being asked to take too big a hit as store chains move to cut their costs.
The British Property Federation described the CVA process, used by a string of big names even before the crisis including Sir Philip Green’s Topshop empire, as “flawed”.
This was New Look’s second CVA in three years.
The result secures 11,000 jobs and the implementation of turnover-based leases at 402 stores.
In return, New Look’s major shareholders are to pump £40m of new investment into the business.
The CVA also allows a recapitalisation plan, agreed with the company’s lenders, to go forward.
New Look chief executive Nigel Oddy said: “I would like to take this opportunity to thank our landlords and creditors for their support for our CVA, which, alongside the consequential financial restructuring that will now be progressed, will provide us with enhanced financial strength and flexibility, and a sustainable platform for future trading and investment.”