New Look is set to increase the rate of its store closure programme ahead of tax increases this April, The Times reports.
A cornerstone of the UK high street since 1969, approximately a quarter of the veteran retailer’s 364 stores nationwide are reportedly at risk when leases expire, putting part of its 8,000-strong workforce at risk.
New Look has revised its store estate twice in the past six years and downsized its portfolio by almost half from 600 stores in 2018.
All of the company’s stores are on relatively short leases, linking rents to store turnover. Although it is possible that some stores would have closed regardless, the predicted acceleration is thought to be a direct result of the significant cost increases revealed in October’s budget.
Labour’s first budget included a 6.7% increase in the minimum wage, to £12.21 an hour. Business rates across the retail sector will rise £140 million from April.
The rise of employers’ National Insurance contributions will rise from 13.8% to 15%, with the threshold decreasing from £9,100 to £5,000.
In October, the retailer revealed that its revenue had dropped by 8.9% from £816.9 million to £735.4 million for the year ending 30 March 2024.
A New Look spokesperson told The Times: “Our store estate is an important part of our business, alongside our best-in-class website and app.
“We have recently invested over £3 million in our stores in Greater Manchester to trial new omni-channel initiatives to improve customer experience. Using the learnings from these trials, we are now upgrading a further 17 stores across the country.
“On occasion we do have to close stores, either due to the landlord’s request or because the site becomes unviable. However, we remain on the lookout for appropriate new opportunities across the country and continue to invest in our existing store estate.”
New Look narrowed its pre-tax loss to £21.7 million for the year to 30 March, down from an £87.8 million, despite sales falling 8.9% to £769.2 million, which it attributed to “store closures and tough trading conditions”.
