Despite the approval of New Look’s CVA, other retailers should not expect landlords to agree to turnover-linked rents

Following the news that New Look’s CVA has been approved, Chloe Collins, Senior Apparel Analyst at GlobalData, a leading data and analytics company, offers her view on the situation:

“Approval of New Look’s CVA will set a precedent for other retailers to suggest turnover-linked rent agreements for their struggling estates in the wake of COVID-19. However New Look is such a big player in the market and would, upon collapse, have left over 400 empty stores on high streets and in shopping centres, so smaller retailers must think twice before assuming similar CVA’s would be approved, given they may not be as important to landlords.

“With New Look now unable to exit any of its stores within the next three years, its investment will be thinly spread, with store refurbishments needed to entice shoppers, as well as online developments such as better delivery options and impactful digital marketing. In order to turn around performance, it is crucial that it focuses on clearly identifying its target customer, with its ‘broad appeal’ ranges failing to stand out against rivals such as PrettyLittleThing and Zara. Without significant changes to its product offer, it is likely to continue losing market share in the coming years.”

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