New Look has revealed the proposal for a second company voluntary arrangement to convert the leases on 402 of its UK stores to turnover-based rents. The CVA proposal involves resetting the majority of New Look's stores to a turnover rent basis of up to 12%, that aligns future performance and reflects the wider retail market. 

Nigel Oddy, Chief Executive Officer, said: “We are launching this CVA out of absolute necessity and are calling on our landlords to agree a turnover rent model for our stores which will put us into a position to be able to complete a financial restructuring agreed with our creditors that will secure the future of New Look and our employees." 

The proposal also includes that the minimum rents for the 402 rebased stores in year two will be equivalent to 85% of year one rent paid. In year three, minimum rents will be equivalent to 85% of year two rent paid. Landlords have been offered the opportunity to exit the leases on its stores “if they believe they can identify an alternative tenant on improved terms”. However, New Look will not be able to exit rebased stores until the end of the CVA term of 36 months, after which it will only be able to leave a store if it is underperforming.

Oddy went on to say: “Together, the proposed CVA and the financial recapitalisation will provide the foundations for us to deliver our long-term strategic plans, safeguard over 11,200 jobs, and continue to build on the brand status New Look has built over the past 50 years as one of the UK’s leading womenswear retailers.”

The meeting to vote on the CVA will be held on 15 September. The proposal requires approval from 75% of unsecured creditors.