New Look in crunch talks with lender amid growing concern over the high-street’s ability to recover once lockdown restrictions are lifted
- Group has been thrashing out terms on an £80m loan facility with its bank
- The company must renegotiate the terms of the trade credit facility by 30 June
New Look has been thrashing out terms on an £80million loan facility with its bank ahead of a deadline at the end of this month.
The company must renegotiate the terms of the trade credit facility by 30 June amid widespread uncertainty over how soon the high street will be released from lockdown and whether restrictions may dampen demand.
Credit rating agency Standard & Poor’s said the 480-store chain has a separate £100million revolving credit facility – a line of credit a company can also access at any time but which is currently ‘fully drawn’.
Under pressure: New Look must renegotiate the terms of the trade credit facility by 30 June
New Look said that its bank has offered to provide an extention to the £80million loan facility and added ‘the terms are in the process of being agreed’.
A New Look spokesman said: ‘We have a longstanding and supportive relationship with our bank.’
S&P said in a report to the chain’s bondholders an extention, if agreed, ‘would allow New Look to weather the liquidity pressure over the coming few weeks’.
But it added: ‘The soft trading conditions we expect in the UK retail market over the next 12 months will weigh on New Look’s earnings and cash generation and heighten the risk of debt restructuring or a conventional default.’
New Look closed its stores in March and has since traded solely online, a relatively small part of its business.