The company said it is asking landlords to accept new lease contracts on its stores which are based on turnover as it battles the “challenging retail market environment”.
It said it will launch the company voluntary arrangement (CVA) proposal to help bring down its rent and “safeguard 12,000 jobs” at the business.
New Look said 459 of its 496 stores have reopened but it has reported a 38 per cent fall in like-for-like store sales since reopening due to the “continued impact of Covid-19 on footfall”.
With the pandemic ongoing and social distancing measures in place for the foreseeable future, it remains difficult to accurately forecast the sales recovery rate
The retailer said it has also now launched a sale process as it looks to determine interest from investors for its shares and assets.
New Look said its restructuring will also see it inject £40 million (€44 million) of new funds to help drive growth, while it will also slash its current debts from £550 million to £100 million through a debt-for-equity swap deal.
Nigel Oddy, chief executive of New Look, said: “As has been the case for many retailers, New Look’s financial position has been significantly impacted by Covid-19, and over the past five months we have had to take a number of tough but necessary decisions and actions to manage the impact this has had on our business and our people.
“As a result of taking decisive measures to preserve and maximise liquidity since the onset of the pandemic, we have maintained our cash position through the lockdown period, and this has also in part been helped by strong online trading.
“However, current trading remains impacted by the decline in footfall seen right across the retail market, and with the pandemic ongoing and social distancing measures in place for the foreseeable future, it remains difficult to accurately forecast the sales recovery rate.
“New Look is a brand that has inspired tremendous loyalty over the past 50 years and has earned its place as one of the UK’s leading womenswear retailers.
“We are confident in our plans to build on these strong foundations with our revitalised broad appeal product ranges, and this transaction will allow us to secure our future for the benefit of all stakeholders as we navigate the post-Covid-19 landscape.”