THE HIGH COURT has agreed to appoint provisional liquidators to the Irish branch of UK fashion retailer New Look.

The court heard this morning that the parent company of New Look Retailers (Ireland) Limited had written yesterday to notify that it was withdrawing its financial support. 

Appearing before Mr Justice Brian Cregan this morning, John Lavelle BL told the court  that the company, which operates 26 stores across Ireland employing over 300 people, has experienced “financial challenges” in recent years “like many other high street fashion retailers”.

He referred to the shift to online shopping, inflation and the cost of living as contributing factors.

He told the court that the company has made “substantial” losses over the last four years.

The court heard that by January of this year, the company had amassed a total of €17.7 million in liabilities, including €15.6 million in financial support from its parent company.

Between 2018 and 2019, the parent group took steps in England to reduce its financial liabilities and rent obligations.

The court heard that in late 2020, the company petitioned for examinership in Ireland, but it was refused following opposition from landlords.

It reached an agreement with landlords in relation to the reduction of rent “in most stores”. However, the court heard that despite this, the company has continued to face financial pressures.

Lavelle told the court that the parent group has taken the view that the Irish company’s business is no longer viable and yesterday, it wrote to notify that it was withdrawing its financial support.

As a result, the company has taken the view that it is insolvent, the court heard.

Lavelle told the court that the company will continue to trade and its stores will remain open “at least for the next number of weeks”. He said it was essential that it remain open in order to sell the bulk of its stock. 

Mr Justice Cregan agreed to provisionally appoint Shane McCarthy and Cormac O’Connor of KPMG as liquidators of the company. 

The judge said the matter will return to court in early March.

Redundancy process

In a statement this afternoon, the company said New Look’s staff were “notified immediately” following the appointment of provisional liquidators, with “further staff engagement” planned over the coming days.

“A 30-day staff consultation process will commence over the coming days. Regrettably, a collective redundancy process, impacting all colleagues in the ROI is also envisaged,” the company said.

“New Look stores will be closed over the coming days, before reopening on 23 February for a clearance sale.”

A New Look spokesperson said: “Over the past few years, we have had to navigate a tough external environment which has only become more unpredictable. We have adapted to this evolving landscape by investing in our product proposition and digital offer.

“However, due to the increasingly volatile trading conditions we needed to expedite our existing plans, which included conducting a review of our operations in the Republic of Ireland.

“Following this review, the Group regrettably concluded it was no longer viable to continue trading here, so it has made the difficult but necessary decision to enter liquidation in this market.”

The spokesperson said the Irish business “has struggled for many years due to rising costs and squeezed consumer spending, despite our efforts to turnaround the performance”.

“Our focus now is on supporting our colleagues through this process. We remain confident in the UK market and take pride in offering our customers great-value, high-quality fashion.”