New Look’s bondholders prepare to fight against potential financial loss

Bondholders of New Look have appointed Rothschild investment bank to protect their interests in case the financial struggles the company is going through provoke a corporate overhaul.

The market expects the troubled retailer to report continued losses and falling sales when it publishes a trading update this week, reported the ‘Sunday Times’.

Soon after the new year kicked off, potential buyers were reported to be circling New Look, hoping to capitalise on its current financial weakness and plummeted bond prices. The potential buyers reportedly consist of hedge funds and vulture funds, including Apollo.

New Look’s bondholders need to prepare for a likely financial overhaul

“There’s a good business here but with far too much debt and too many shops,” a senior retail source told ‘The Mail on Sunday’. “The value of the company’s debt has fallen significantly in recent weeks. People in the buyout market are looking at it.”

Plunging bonds would put those potential buyers a in a position to seize New Look’s assets should it collapse. The collapse in New Look’s bond prices followed earlier reports on the fashion brand was mulling a company voluntary agreement (CVA) in an effort to restructure its fragile finances.

It’s worth recalling that in late 2017 Brait, New Look’s owner, wrote down the fast fashion chain’s value to zero. The South African company paid 780 million pounds for the business.

The retailer is also thought to be looking into reducing its footprint, with the closure of 60 stores across the UK.