New Look’s CVA proposal criticised
By Sarah Wood | 27th August 2020
Fashion retailer New Look has been criticised by the British Property Federation for inaccuracies in its CVA proposal, which will move many of its UK stores to a turnover rent.
The membership organisation didn't agree with the retailer's claim that its CVA proposal reflects best practice, as reported by Retail Gazette.
New Look, which has a store in Cheltenham, is seeking a three-year rent holiday for 68 of its stores, and a move to turnover based leases for 402 other stores under the terms of its CVA, which launched yesterday (26th August).
British Property Foundation said New Look and Deloitte launched the proposal saying that it reflected British Property Federation's vires, but that wasn't the case. While the organisation confirms the two companies did engage with it and make some changes to the proposals as a result, it still fails to meet the standards for best practice for CVAs.
The British Property Foundation said CVAs aren't about a permanent change - they are temporary and part of a rescue plan to enable a business to get back on its fee. But it said New Look was using its CVA to permanently rewrite its leases and that CVAs mustn't unfairly compromise commercial property owners.
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