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Creditors meet to vote on rescue deal to keep New Look fashion chain afloat

New Look is battling to stay afloat and will close 60 stores to safeguard its short-term future (John Keeble/Getty Images)

Creditors are meeting today to vote on a rescue deal to save fashion chain New Look.

The firm is looking to close 60 stores and axe almost 1,000 jobs as it bids to stay afloat.

Under the terms of its Company Voluntary Arrangement proposal with creditors, it will seek a reduction in rental costs and revised lease terms across 393 stores.

MORE: Toys R Us to close all 100 UK stores ‘within six weeks’

As a result, up to 980 of its 15,300 UK staff will be made redundant, with stores across the country earmarked for closure.

If the rescue plan is not agreed, New Look risks falling into administration, joining the likes of Toys R Us and electronics firm Maplin that have gone under in recent weeks.

Toys ‘R’ Us failed to find a buyer after falling into administration earlier this month and stores are now closing (REUTERS/Phil Noble)

New Look executive chairman Alistair McGeorge has said: “We are having to take tough but necessary actions to reduce our fixed cost base and restore long-term profitability.

“We have held constructive discussions with our key landlords and strategic partners and will now seek creditor approval on our CVA proposal.

“A priority for us is to keep all potentially affected colleagues informed during this difficult time.”

MORE: Almost 44,000 UK retailers ‘in real financial distress’, experts warn

Sales for the 39 weeks to December 23 dropped 6.3% to £1.1billion, and it posted a pre-tax loss of £123.5m.

Retail analyst Charlotte Pearce at GlobalData told Radio 5 live’s Wake Up To Money that New Look had “lost relevance” among its target market of 16- to 24-year-olds.

“What it should have done is gone after the Debenhams, Dorothy Perkins shoppers who’ve started to become disappointed with what’s available on the High Street,” she said.

She described the number of shops in its portfolio as an “obscene” amount.

Carpetright says too many stores are not sustainable and will close (REUTERS/Darren Staples)

Meanwhile, Carpetright is looking to close an unspecified number of poorly-performing stores under a CVA, it revealed on Wednesday.

Chief executive Wilf Walsh said the firm’s previous management had opened too many stores that were poorly located with “simply unsustainable” rents.

Carpetright, which has 409 UK shops, has also agreed a £12.5m emergency loan to relieve “short-term funding pressure”.

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And, in more bleak news for the high street, men’s tailoring retailer Moss Bros has issued another profit warning, which it says is caused by consolidating its supplier base because of the weakness of the pound.

It comes after a similar warning in January. The retailer said that suit hire sales “continue to be challenging”.

Mothercare is also struggling, warning earlier this month profits would come in at the lower end of expectations.

It is to close 60 of its 140 stores in response to the trend to online shopping, which now makes up 42% of its revenue.