The month of October may have seen a rise in the high street's sales volumes, but New Look is fighting speculation the company is in financial troubles. The high street giant has contacted its suppliers to reassure them of its financial position
following speculation it could enter administration. If suppliers were to cancel orders and not send fabrics on time, the company would be very hard hit.
to Retail Week New Look wrote to suppliers on Monday to reassure them that its finances were in good health despite a growing debt of 1.1 billion pounds on its balance sheet.
Speculation that the retailer was poised to enter administration and carry out a company voluntary arrangement was described as “absolute nonsense” by sources close to the business, the Financial Times reported.
Looking at its figures, New Look is expected to report a 25% uplift in EBITDA in the first half of the year in the next few weeks, however its balance books has been under scrutiny. After a difficult 2011 when sales fell and former chief executive Carl McPhail exited the business, New Look signed a deal to extend maturities on its senior debt to April 2015.
Chairman Alistair McGeorge said at the time that the deal had allowed New Look to find the time to find a solution to its borrowings.
The deal also earmarked an initial 25 million pounds to buy back the payment-in-kind debt at market price, subject to certain tests, the retailer said.
New Look also recently bought back 20 million pounds of debt in payment-in-kind notes, which account for about 700 million pounds of its net debt and has more than 200 million pounds of cash, sources said.
The company continues to search for a new chief executive officer.
Image: New Look store