New Look faces possible liquidation after missing deadline to sell business
The fate of the fashion chain now lies with its street owners, who will decide its future next week, after New Look failed to find a buyer for the company.
New Look has failed in its attempts to secure a sale of the business, putting its future in the hands of owners who are expected to vote on a restructuring deal next week.
The company warned it could be forced to consider “less favorable alternatives,” which include liquidation, if creditors do not back its proposals.
Last month, the fashion chain said it was soliciting interest from sales in an effort to secure its long-term future.
However, he revealed on Wednesday that a deadline for offers passed Tuesday with no progress after no offers were made for the entire company.
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The future of the business will now depend on securing owner support for its Voluntary Business Arrangement (CVA) proposals, which will be put to a vote on September 15.
At least 75% of creditors will need to approve the deal for it to pass.
In August, New Look announced CVA’s agreement to help lower its rent and “save 12,000 jobs” at the company.
He said he was asking owners to agree to new leases on his stores based on sales as he battled “the tough environment in the retail market.”
The move will also see New Look reduce its long-term debt from £ 550million to £ 100million following a debt-for-stock swap.
New Look has said it will also invest £ 40million in new financing to drive its long-term growth strategy.
The company said it received “overwhelming support” for the move from its secured financial creditors, with 100% of its credit lenders and 90% of its bondholders backing the deal.