New Look to speed up planned closures ahead of tax changes
The government has planned another increase to the minimum wage of 6.7% to £12.21 an hour, which will increase the retail industry’s business rates bill by £140m
New Look is reportedly set to permanently shutter roughly a quarter of its 364 stores when leases expire, putting some of its 8,000 staff at risk, according to The Times.
While the retailer has restructured its store portfolio twice in the past six years and downsized from 600 UK stores in 2018, this latest round of closures is thought to be a direct result of the tax increases revealed in the October 2024 budget.
The Budget changes, which are due to come into effect from April this year, include the rise of employers’ National Insurance contributions from 13.8% to 15% – with a lowered threshold from £9,100 to £5k.
Meanwhile, the government has planned another increase to the minimum wage of 6.7% to £12.21 an hour, which will increase the retail industry’s business rates bill by £140m.
According to a New Look spokesperson, the retailer’s store estate is an “important” part of its business, alongside its “best-in-class” website and app.
They told The Times: “We have recently invested over £3m in our stores in Greater Manchester to trial new omni-channel initiatives to improve customer experience. Using the learnings from these trials, we are now upgrading a further 17 stores across the country.
“On occasion we do have to close stores, either due to the landlord’s request or because the site becomes unviable. However, we remain on the lookout for appropriate new opportunities across the country and continue to invest in our existing store estate.”
For the year to 30 March 2024, New Look managed to narrow its pre-tax loss to £21.7m – down from £87.8m – despite seeing sales fall by 8.9% to £769.2m during the period. At the time, the retailer attributed its fall in sales to “store closures and tough trading conditions”.
New Look has been approached for comment.
