U.K. fashion chain New Look announced Wednesday that it plans to shutter 60 of its stores and let 980 employees go.
As part of a revitalization plan called the Company Voluntary Arrangement (CVA), New Look is planning to close more than a tenth of its 593 stores, and six more that are sublet to third parties. The plan is used by struggling retailers to eliminate stores that are losing money or to reach a rent reduction agreement with landlords.
“Given our challenged trading performance and over-rented U.K. store estate, we are having to take tough but necessary actions to reduce our fixed cost base and restore long-term profitability,” New Look executive chairman Alistair McGeorge said in a statement.
The company, which is owned by South African investment company Brait, is now awaiting approval from its creditors (including landlords) to proceed with its plans. The decision will be made at a meeting on March 21. For now all U.K. stores will continue regular operations.
New Look’s online sales channel will not be affected by any of the planned changes.
The company said that as a result of the proposed store closings, which if approved will take place over the next six to nine months, there will be 980 redundancies out of a 15,300 staff. New Look said it will make great efforts to reassign as many of the misplaced workers as possible.
The CVA is something the company has been considering for some time. Early in February, McGeorge mentioned that the restructuring process was just one of the options on the table to address falling sales.
McGeorge took the reins after CEO Anders Kristiansen stepped down in September 2017 after more than five years following poor quarterly results and more than a year of falling sales.