Why Read?

• Understand why New Look is structurally and likely irreversibly competitively disadvantaged vs Boohoo and Primark – deep dive on relative cost structures (pure play online vs pure play in-store vs multi-channel), supply chain, inventory, locations / store sizes, rent / service charge / business rates and sales densities 
• Understand the extent to which New Look has been out-competed by Boohoo and Primark and why its customer franchise is unlikely to be repairable
• Understand why liquidity is likely to break in Q4 21 (by Mar-21), potentially sooner and why liquidation or sale of the business through administration at a negligible price are most likely and would result in negligible recovery for New Look’s 12% 2024 PIK-Toggle Senior Secured Notes (SSNs)
• Understand how our recommended turnaround strategy for New Look (our bull case) could translate to a possible refinancing of the SSNs, albeit we assign only a 10% probability to this scenario 

What’s New?

• Detailed financial projections (including of liquidity by quarter) and assumptions across base, bear and bull cases 
• A recommended turnaround strategy for New Look to give it the best chance of surviving – some tools management has missed in our view
• Using New Look’s CVA optionality on Category B stores to rationalise the store estate post COVID-19 and why  landlords are likely in a weak negotiating position here
• Price comparison – New Look vs Boohoo, Primark and H&M
• UK value clothing market share data and extent to which Boohoo and Primark have gained market share from New Look
• COVID-19 key data points for comparison to New Look – across Boohoo, Primark and Matalan
• Sales densities, rent per sq ft and an abundance of other operational data

Questions Answered

• What key competitive advantages do Boohoo and Primark have over New Look?
• What turnaround tools has New Look’s management overlooked that offer the best chance of survival for the company?
• How are New Look’s rent / service charge renegotiation discussions with landlords likely to play out and would a positive outcome here be sufficient to position New Look for an eventual refinancing?
• Which assets are pledged for the super senior RCF and Operating Facilities and why is recovery on the SSNs likely negligible?
• What read-across is there to New Look from companies which have reported / given trading statements on the COVID-impacted period and how do our financial projections for New Look compare with these?