Interim examiner appointed to Irish arm of New Look fashion retail chain

New Look Retailers (Ireland) Limited, sought the protection of the courts due to financial difficulties and losses caused by the fallout from the Covid-19 pandemic.

Deloitte's Ken Fennell has been appointed interim examiner to New Look Ireland. File picture: Yui Mok

The High Court has appointed an interim examiner to the Irish arm of the fashion retailer chain New Look.

New Look Retailers (Ireland) Limited, which operates 27 stores and employs 475 people, sought the protection of the courts due to financial difficulties and losses caused by the fallout from the Covid-19 pandemic.

At the High Court Mr Justice Max Barrett said he was satisfied to appoint experienced insolvency practioner Ken Fennell of Deloitte as interim examiner to the company.

Noting the company's financial difficulties, the judge said the contents of an independent expert's report which stated that the company has a reasonable prospect of survival as a going concern, if certain steps are taken.

Those steps including the appointment of an examiner, who will attempt put together an agreed scheme of arrangement with the firm's creditors.

Closures due to Covid-19 impacted business but products are still popular

Seeking Mr Fennell's appointment, Kelley Smith Bl for the company said that in the recent past the company had been profitable and its products are popular with the public.

However, like many other businesses the retailer had been badly hit by the Covid-19 pandemic. Its stores were closed after the country went into lockdown in March, and have been reopened on a phased basis since June.

The company had suffered losses due to the closures and reduced footfall in its stores and as things stand it expects to be cash flow insolvent, and unable to pay its debts as they fall due by October, counsel said.

Its biggest creditors are Revenue and its landlords, the court heard. As part of the proposed examinership process the company will be seeking reductions on it leases, which may have to be repudiated, the court heard.

The company's UK parent is currently undergoing a Creditor's Voluntary Arrangement (CVA) as it attempts to restructure its finances arising out of the Covid-19 pandemic.

Counsel said that the independent experts result showed that the appointment of an examiner to put together a survival scheme was in the best interests of all stakeholders, including the firm's 475 employees.

The report, counsel added, also stated that all the relevant stakeholders would fare much better through a successful examinership process compared to if the company went into liquidation.