New Look forced to close 26 stores in the Republic of Ireland due to financial struggles, leaving nearly 350 people unemployed.
The major British fashion retailer New Look has announced the closure of its 26 Irish stores. The chain was founded in Britain in 1969 and opened its first store in Ireland in 2003. After almost 22 years in business it has been forced into liquidation, making approximately 347 employees redundant, 32 of whom were full-time staff.
New Look had been facing financial difficulties due to the pressures of the cost of doing business, staff costs and the increased use of online shopping by consumers. The Irish stores had accumulated debt of approximately €17.7 million according to their latest accounts, that the overhead company could no longer afford, deeming the Irish department of the company no longer viable.
“The decision to seek the appointment of liquidators was not taken lightly. New Look’s Irish operation has struggled for some years, impacted by a range of factors including supply-chain and in-market costs, and squeezed consumer spending,” said New Look.
In February, Shane McCarthy and Cormac O’Connor of KPMG Ireland were appointed as provisional liquidators of New Look Ireland. Following this, the employees were immediately notified which led to engagement and planning of the next steps for the company. This included a 30-day staff consultation process.
While facing unemployment, the staff also faced numerous other challenges throughout the process. It was announced that several stores would reopen for a closing down sale on February 23rd. This sale quickly went viral and led to overwhelming working conditions. Throughout the sale process, several employees used social media to document the aftermath and challenges they faced.
“Look what the vultures did to our store yesterday and are doing the exact same thing today,” said Megan, an employee at New Look.
“I got verbally abused by so many middle-aged women today over their vouchers or if they couldn’t get in, it’s not my fault.”
In 2020, the company had previously petitioned to have an examiner appointed, which resulted in reduced rent for most of their stores, despite the push back they received from their landlords. Even with this extra assistance, each store in the Irish branch continued to lose money for the next four years.
Despite the financial struggles the Irish branch continued to face, New Look has stated that the closure of its Irish stores will not affect the British brand and that its 344 British stores continue to succeed. They have stated that in future they will be focusing their attention on both their UK business and digital sales.
“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,” said New Look.
This is following the closure of several other retail chain stores in Ireland, including Quiz. Quiz had previously been forced to shut 23 of its 65 stores across Ireland and the UK, which resulted in another 54 employees being made redundant. These closures are again the result of the rising cost of doing business and the frequent use of online shopping by consumers.
According to Retail Excellence Ireland, the closures of both Quiz and New Look’s Irish stores should be seen as a warning sign to the Government that Ireland’s business costs have become unsuitable for retailers, which they say could have treacherous consequences on the economy and could lead to increased future unemployment.