Top US firms among adviser line-up as New Look confirms plans to close stores and cut jobs
A&O and Paul Hastings among advisers on clothing store's company voluntary arrangement
March 07, 2018 at 10:53 AM
3 minute read
Paul Hastings and Sidley Austin are among a line-up of law firms advising on clothing store New Look's company voluntary arrangement (CVA), in the latest high-profile retail restructuring to hit the high street.
The fashion giant has confirmed that it is seeking approval from creditors to close about 60 of its 593 UK stores, placing 900 jobs at risk. The proposal also includes a reduction in rental costs and revised lease terms across 393 stores.
US firm Paul Hastings is advising both New Look and its owner, South African investment company Brait, with a team including London restructuring and finance partner David Ereira, corporate partner Peter Schwartz, leveraged finance partner Edward Holmes and real estate partner Conor Downey.
Sidley is advising a group of senior secured noteholders, with a team including restructuring partner Yen Sum, corporate reorganisations partner Jennifer Brennan and capital markets partner Noel Hughes, while Allen & Overy is advising the banks involved in the deal.
Kirkland & Ellis also took a separate role, advising a distinct group of distressed bondholders.
New Look executive chairman Alistair McGeorge said: "Given our challenged trading performance and over-rented UK store estate, 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."
Linklaters advised Brait on its 2015 acquisition of New Look, while Eversheds took a role for the company on the employee share plans aspects of the sale. In South Africa, Brait took advice from former DLA ally Cliffe Dekker Hofmeyr.
News of New Look's CVA comes in the wake of a raft of other high-profile retail restructurings, with a number of established brands collapsing into administration.
Both Toys R Us and Maplin confirmed moves into administration last week, with Kirkland and Eversheds Sutherland respectively taking the lead roles. Restaurant chain Jamie's Italian also recently agreed a CVA to close sites and cut rents, with CMS taking the lead legal role.
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