New Look has warned over profits and announced plans for a debt for equity swap with its bondholders as part of a painful restructuring aimed at putting the struggling fashion retailer on a securer financial footing.
The restructuring will see the firm's long-term debt reduced from £1.35bn (€1.5bn) to £350m (€392m), alongside a new capital raise of £150m (€168m) funded by the issuance of new money bonds.
New Look pointed to "increased headwinds" in late November that drove increased promotional activity, pushing its UK like-for-like sales slumping 5.7pc in December, resulting in comparable sales growth of just 0.9pc in the third quarter as a whole.
The decline in total UK sales was further impacted by the loss of stores as a result of a closure programme.
As a result, earnings for the full year are now projected to be £84m from the core UK business while the non-core unit is set to book a £27m loss, below initial forecasts.