New look seeks CVA to reduce rent by 60%

New Look has asked if its landlords can slash store rents by up to 60% in order to try and reduce its £1.2bn debt.

The fashion chain is seeking a company voluntary arrangement (CVA), a legal agreement which would enable it to jettison loss-making stores and agree rent reductions with landlords.

Reports suggest that the retailer has divided its 600 stores into three groups on the level of the performance.

With 70 of its worst stores, New Look would only pay 40% of the rent and would also reserve the right to close them.

A further 380 stores will seek reductions of of between 20% and 60% with the top 150 stores remaining unaffected.

A spokeswoman said: “The company has previously indicated that a potential CVA is being considered as part of a range of options to improve the operational performance of the business.”

“No final decision has been made regarding a CVA, which would require consent from our creditors.”

The CVA will need approval from a majority of New Look’s bondholders before being approved.