Boohoo reportedly mulling New Look buy if CVA vote fails
Acquisition-hungry Boohoo Group is reportedly preparing to swoop on New Look if the value fashion retailer’s CVA doesn’t gain the support of landlords in a vote on Tuesday.
Having failed to generate any concrete bids for the company, New Look last week unveiled its CVA proposals that include massive rent cuts based on turnover for its stores, or zero rents, for a period of three years. But while the lenders that now control the firm are behind the plan and will pump in new funding if the CVA goes through, a number of key landlords are unhappy and could vote against it. That could mean it doesn’t achieve the 75% creditor support it needs.
Observers have said that would likely mean New Look going under again, which could be where Boohoo comes in, according to sources who spoke to The Sunday Times.
The giant online pureplay has already bought a number of distressed brands over a period of several years. They include Nasty Gal, Karen Millen, Coast, Oasis and Warehouse, the latter two having been acquired as a direct result of the lockdown making the businesses unviable. But in doing so, it has also closed all of their stores and insists it has no ambition to operate physical shops.
If Boohoo bought the business, it would be a blow to New Look’s 11,000 staff and its creditors. But the e-tailer hasn’t commented on whether it has any interest in such a purchase and a source close to the situation told the newspaper that a sale to Boohoo would be a last resort.
Would Boohoo really want to buy New Look? The value pricing of the brand would certainly sync with Boohoo's own approach to pricing and New Look's large market share in womenswear would also be attractive, as would the fact that it would expose Boohoo to a wider consumer group than its mainly young shoppers at present.
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