New Look Nears £100 Million Debt Refinancing Deal Amid Challenging Market
Affordable fashion giant New Look is on the brink of finalizing a significant £100 million debt refinancing arrangement after months of strategic negotiations with financial advisors. This move is poised to inject much-needed financial flexibility into the company, given the increasingly challenging trading environment faced by fashion retailers.
Sky News has reported that New Look has been engaged in discussions with financial firms Blazehill Capital and Wells Fargo, with advanced stages of finalizing this crucial agreement. The debt refinancing is a proactive measure aimed at fortifying New Look’s financial position as it looks ahead to the maturity of its existing loan, which is set to expire next June.
It’s important to note that these negotiations do not reflect any vulnerability on New Look’s part. In fact, earlier reports from Sky News, when news of these discussions first emerged, emphasized that the company had been performing well at the time.
The existing holders of New Look’s debt include specialist retail investor Alteri and the Goldman Sachs unit Davidson Kempner.
New Look stands as one of the leading fashion retailers, with a formidable presence encompassing both brick-and-mortar stores and online operations in Britain and Ireland. The company operates a vast network of over 400 stores and boasts a dedicated workforce of more than 10,000 employees.
In recent years, New Look has navigated through a series of challenges, including the implementation of a Company Voluntary Arrangement (CVA) and a crucial financial recapitalization during the pandemic. These strategic measures were pivotal in ensuring the company’s resilience during turbulent times. Additionally, New Look introduced an innovative rent-free/turnover-based rent plan, albeit facing opposition from significant landlords. However, the company effectively defended against legal challenges brought by certain landlords concerning its CVA.
Under the astute leadership of former Bonmarché CEO Helen Connolly, who assumed the role of Chief Executive Officer last summer, New Look has displayed notable signs of recovery. A report from this spring revealed that the financial year ending on March 25 yielded impressive results, with New Look’s revenue reaching £895 million and EBITDA witnessing a remarkable surge of 67% to £42.2 million.
