It has been reported that around a quarter of the high street fashion retailer’s 364 store estate are “at risk” of closure when leases expire – this equates to about 91 stores
New Look is set to “speed up” its store closure programme ahead of the business tax hikes announced in the Autumn Budget.
The Times reported that around a quarter of the high street fashion retailer’s 364 store estate are “at risk” of closure when leases expire. This equates to about 91 stores, which collectively employ around 8,000 staff members. While some of these stores would shut regardless, as leases are linked to store turnover, it is reported that this will be “accelerated” as a direct result of tax increases revealed in October’s budget.
However, New Look has not officially confirmed this plan, although it did say that it did, on occasion, have to close stores due to external reasons. They have also not confirmed the number of stores potentially at risk. 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 £3million 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.”
For now, all New Look sites will continue trading as they normally do. Since 2018, when it had 600 UK brick-and-mortar stores, New Look has restructured its store estate twice. The fashion retailer managed to narrow its pre-tax loss to £21.7million for the year to March 30, down from £87.8million, despite sales falling 8.9% to £769.2million. The chain attributed this drop to “store closures and tough trading conditions”.
Employers currently pay National Insurance for most workers earning more than £9,100 a year. The amount they pay is equivalent of 13.8% of the worker’s earnings above that threshold. For an employee earning £30,000, the employer would pay National Insurance of around £2,800.
However, in the Autumn Statement, Chancellor Rachel Reeves announced the government would increase the tax rate to 15% and reduce the threshold at which firms must pay to £5,000. The British Retail Consortium has predicted that these changes will create a £2.3billion bill for the sector. The Centre for Retail Research (CRR) has also warned that around 17,350 retail sites are expected to shut down this year.
It comes after a tough one in 2024, which saw 13,000 high-street shops close, a 28% increase on the year before. Professor Joshua Bamfield, director of the CRR, said: “The results for 2024 show that although the outcomes for store closures overall were not as poor as in either 2020 or 2022, they are still disconcerting, with worse set to come in 2025.”