Fashion retailer New Look has halted all production and closed all of its 508 stores in the UK and Republic of Ireland as the coronavirus impact continues to affect its business.
The group says it has taken several decisions aimed at preserving cash, maximising liquidity, managing working capital and reducing costs – including cutting marketing costs, requesting a three-month rent holiday from landlords, delaying all significant cap-ex projects, halting all recruitment, and pausing all production, with the production situation “to be reviewed as the situation evolves and in response to demand.”
“Given the unprecedented circumstances that we – like all retailers – are operating in, we have taken a range of decisive and immediate actions to help us navigate through the coming period,” says CEO Nigel Oddy.
“We are confident that a combination of these ongoing actions, the significant financial and operational progress we have made over the past two years with our turnaround plan, and the strength of our brand mean that we will be well-positioned to return to growth when a more normalised operating environment resumes.”
Earlier this week Primark said it had cancelled all of its orders with suppliers and closed all of its stores, adding it already had large quantities of stock in stores, depots and in transit, and did not want to take delivery of stock that “we simply can’t sell.”
Gildan Activewear announced yesterday it was stopping all production through mid-April.
But representatives in major sourcing countries such as Bangladesh have warned such decisions will have repercussions for the entire industry. The president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) said factories were under threat of closure due to a lack of work and the cancelling of orders that had already been shipped could result in factory owners being unable to pay workers – which would subsequently lead to social unrest across the country.