LONDON, United Kingdom — Struggling British fashion retailer New Look launched the latest stage of its restructuring process on Wednesday, seeking turnover-based leases from landlords at 402 UK stores to help to lower its costs and ensure its survival.

New Look said that the company voluntary agreement (CVA) it was proposing — the second restructuring of its store estate in three years — would need approval from landlords and unsecured creditors at a vote on September 15.

The impact of Covid-19 lockdowns on retail sales was such that New Look, which employs 11,200 people, said it needed to switch to the turnover rent model to safeguard its future viability.

New Look has already won agreement from its banks and bondholders over a recapitalisation plan, but that deal is conditional upon the rebasing of its rents through the CVA, which is being launched after discussions with landlords.

"The proposal ... would relieve the financial pressure on New Look as we navigate the post-Covid landscape, whilst also providing our landlords with greater flexibility over their rental arrangements and ensuring closer alignment of interests with regard to sales recovery," said New Look Chief Executive Nigel Oddy.

New Look is owned by its bondholders, with the biggest of those being South African investment firm Brait, along with Alcentra, Avenue Capital and CQS.

By Sarah Young; editor: David Goodman.