Fashion giant New Look is reportedly accelerating plans to close stores amid the fallout from the government’s National Insurance rise.
The major retailer is said to be ramping up a branch closure programme as employer costs increase due to the hike, which drew criticism after it was announced in the Autumn Budget.
Of the chain’s 364 shops, around a quarter are ‘at risk’ when their leases expire, according to The Times.
This works out at around 91 branches, which would mean a significant impact on the overall 8,000-strong workforce.
Although some would shut down regardless through the link between leases and store turnover, it is reported that the process is being sped up as a ‘direct result’ of cost increases in the Budget.
The high street brand has already restructured its UK store estate twice in the past six years — a decrease from around 600 outlets in 2018.
Stores remain open for the time being, with no final decisions regarding closures having been made.
The move is said to have been prompted by the rise in employment costs announced by the Chancellor Rachel Reeves in October.
A New Look spokesperson told Metro: ‘Our store estate is an important part of our business, alongside our best-in-class website and app.
‘It is this omni-channel approach which allows us to best serve our 10 million customers, however they like to shop.
‘We have recently invested over £3 million in our stores in Greater Manchester to trial new omni-channel initiatives to improve customer experience. Using the learnings from these trials, we are now upgrading a further 17 stores across the country.
‘We also continue to invest in our thriving online platform which has resulted in a strong online sales performance, with volumes significantly outpacing last year and an improved online margin.’
New Look continues to be a major store and online retailer in the UK, ranked number two for overall women’s wear market share in the 18 to 44 age range by market research company Kantar.
More than 10 million customers shop online, in-store and via the app. The online platform served customers in 53 countries, with over 246 million site visits, up from 235 million, in the financial year ending March 2024.
The spokesperson added: ‘On occasion we do have to close stores, either due to the landlord’s request or because the site becomes unviable.
‘However, we always remain on the lookout for appropriate new opportunities across the country and continue to invest in our existing store estate.’
Reeves announced in the Budget that employers will start paying National Insurance at £5,000, rather than the previous £9,100 threshold.
Experts have said that many businesses will not be able to afford to keep as many staff, with Martin Lewis warning that employers will have to pay an extra £615 to keep each worker.
Simon Gleeson, a partner at Blick Rothenberg, previously told Metro: ‘The budget is pinching into the working person’s pockets and stifling small business growth, and potentially bring forward redundancies.’
The chancellor has defended tax increases for employers by saying the money is needed to put public finances on a ‘firm footing’.
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