Struggling fashion retailer plans to shut around 60 UK shops

The fashion chain, once based in Weymouth and now owned by South Africa's Brait, is in the middle of a turnaround plan after bringing back its old management to revive the business following a steep fall in sales and mounting losses.

New Look's very first store was set up in Weymouth in 1971 by founder Tom Singh, with the company founded in Taunton, Somerset in 1969.

The town was home to the retailers distribution centre and offices, with the distribution centre moving in 2005.

However the head office remained in Weymouth, although 250 jobs were transferred to London as part of the companies expansion plan.

The new Weymouth Gateway offices opened in 2013, which accommodated 350 workers in HR, property design and computing.

The retailer is now considering a company voluntary arrangement (CVA) as a way to shut around 10pc of its 600 shops in the UK, according to reports.

New Look is the latest high-street retailer to come under pressure.

It has 600 stores nationwide, with eight in Dorset, including Weymouth, Dorchester and Bridport.

A company voluntary arrangement (CVA) is a legally binding agreement with the firm's creditors to allow a proportion of the debt to be paid back over a fixed period of time.

Though a decision hasn't been made yet, it's thought to be expected within the coming weeks, and is reportedly one of a number of options being discussed.

The process would require consent from the bondholders, while landlords and other creditors would be asked to vote on the plan later this year.

If the decision is made, it is reported New Look will see roughly 10 per cent (60 stores) shut down, with the company seeking rent reductions at the remaining branches.

The chain is the latest in a number of big names to examine a radical shrinking of their store portfolios, with rising pressures from online and discount rivals, increased labour costs and a poor consumer confidence.

Late last year, New Look axed hundreds of jobs while reporting an operating loss of £10.4 million in the six months to September, 23, compared to the £59.3 million profit recorded in the same period last year.

The company recently dropped plans to move to a new HQ in King's Cross London, with staff due to relocate in the Spring to the 123,000 square foot building, with the building now being given to Google.

The Sunday Times last weekend reported that credit insurance had been withdrawn to many of New Look's suppliers, a move that would force the company to pay for products up-front.

The company has been owned by South African company Brait, an investment vehicle headed by businessman Christo Wiese, who also has interests in Virgin Active and the Iceland chain.

There are worries about Weises's relationship to company Steinhoff, which owns Poundland, Bensons for Beds and Harveys in the UK, a company which has been hit by a huge crisis over its previous accounts, and are expected to seek to offload them to raise money.