Post-New-Look-Apocalyptic Comment: The Morning After

Posted on Sep 16, 2020. by NTI

The folk of the NTI newsroom were up-and-about early this morning, expecting massive fallout from the New Look CVA announcement last evening which some media outposts say is due to 'change the high street forever'. It was still much the same as Billy and Tracee walked into the office earlier; wooden boards where the windows peering into Zizzi used to be, dust collecting on upturned furniture in Carluccios, two 'temporarily closed' Prets and a 'Previously Enjoyed' pop-up shop now occupying space previously enjoyed by Bella Italia. There were no obvious hand-to-hand skirmishes between landlords and tenants outside the Building Society, but maybe that is happening away from the main drag.

Alistair Osborne writes in today's (Wednesday 16 September) Times that: " ... at first glance, it (the 'deal' with New Look's creditors) looks a right stitch-up ... why should the group’s 350 landlords pay for the mistakes of the past?" He goes on: "The landlords were the last piece of a jigsaw that saw the banks extend £170 million of debt; and the bondholders turn £440 million of notes into equity and inject £40 million cash, even if they insisted on an outrageous 16.5 per cent coupon. Without landlord approval 11,200 staff faced losing their jobs." But Nigel Oddy, chief executive of New Look, needed landlords on his side to get even a whiff of the deal through. It is said that he did so by offering the main objectors to his plan a back door. Even if they approved the deal, they could still give 60 days’ notice, pocket two months rent and boot out New Look for another tenant. We think they had better get the WD-40 onto the hinges of that back door when a vaccine comes along and shoppers start to crawl out of their self-appointed panic rooms.

But the re-writing of terms of retail leases could yet happen, as other retailers, their investors and the IPs that advise them have got the scent of landlords slowing down across the delta, as the persistent circling  of them, predicated supposedly on the re-writing of the script by lockdown and the pandemic, continues. They look exhausted. There is a wildness in the eyes of landlords that tenants cannot remember seeing before. Why would a deal be good for New Look, but not for them?

Nigel Oddy seems upbeat this morning, pushing V signs into the air and accepting the plaudits of 11,000 of his colleagues, claiming it was all part of a long-term re-structuring plan. Really, Nigel? You planned to go bust as a bad flush two years ago and come back from the brink during an unforeseeable pandemic? That's quite the plan ...


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