New Look may lose more than 120 UK stores

More than 120 New Look stores may close at it tries to revive its fortunes.

The fashion retailer said in March it would shut 60 stores through a restructuring deal with its creditors, to cut costs and improve profitability.

On Tuesday it said that had risen to 85, because landlords have been exercising their rights under the deal to take back stores and relet them.

Talks with landlords on 13 stores continue, while the fate of 26 shops trading rent-free is unclear.

Comparable sales at New Look, which will be left with about 500 UK stores following the closures, fell 3.7% for the 26 weeks to 22 September.

That was an improvement on the 8.6% slump for the same period last year.

Despite falling sales, underlying operating profits improved to £22.2m compared with a loss of £10.4m last year.

Executive chairman Alistair McGeorge said retailers continued to face "significant headwinds and uncertainties, including Brexit".

"Clearly the wider retail environment remains challenging and we are not expecting that to change anytime soon. However, we are on the right track and continue to drive further efficiencies across the business," he said.

New Look aimed to improve profitability with more full-price sales and an expanded online operation.

Savings of £70m had been achieved, and a further £8m identified, it added.

Of the 60 stores earmarked for closure, 24 have gone, the company has renegotiated rents on 10 and 26 remain open and are trading rent free, at least until after Christmas.

The current plans will leave the retailer with 508 stores.

Last month the chain said it was bailing out of China, with other international operations also under review.

South African retail magnate Christo Wiese's investment vehicle Brait bought 90% of New Look in 2015 for £780m from private equity firms Apax and Permira.

The remaining stake was held by Tom Singh, who founded New Look in 1969, and senior managers.

Apax and Permira abandoned plans to float the highly indebted chain on the London stock exchange in 2010 due to market volatility in the wake of the financial crisis.

Mr Wiese also controls Steinhoff, whose shares crashed in December 2017 following the revelation of accounting irregularities.

Steinhoff owns Poundland, Bensons for Beds and Harveys in the UK and 40 other local brands in about 30 countries.