By Mark Kleinman, City Editor
New Look, one of Britain's biggest fashion retailers, is in advanced talks to sell its struggling French operations to a Far Eastern conglomerate.
Sky News has learnt that the private equity-backed chain is close to bringing the curtain down on more than a decade of efforts to improve the fortunes of Mim by offloading it to Asia Global.
In a statement issued on Friday to lenders, bondholders and investors in its other debt instruments, it said: "New Look confirms that it has received an indicative offer from Asia Global for Mim, its standalone French retail business, and has entered into a period of exclusive discussions with them.
"Negotiations are at an early stage and there can be no certainty that a transaction will be concluded.
"A further announcement will be made in due course as appropriate."
Mim, which operates from more than 300 shops across France, has been a drag on New Look's performance for some time, prompting its parent to take a £64m writedown on the value of the subsidiary's assets in June.
It is not clear what value will be attributed to the business by a takeover by Asia Global.
New Look, which took full control of Mim in 2004, is owned by Apax Partners and Permira, which have been shareholders for a decade.
An attempt to float New Look was aborted in 2010 because of difficult stock market conditions, and Anders Kristiansen, its chief executive, has made it clear that it will not try again until its £1bn debt-pile has been reduced.
Under Mr Kristiansen and his predecessor, Alistair McGeorge, New Look has outperformed many of its high street rivals, refusing to engage in heavy early discounting during last year's crucial Christmas trading period.
In a statement issued last month confirming underlying pre-tax profits of just over £200m for the year ended March 29, Mr Kristiansen said: "Our decision to build scale in four key geographies namely - China, Poland, Russia and Germany, is, we believe, key to New Look's future continued success.
"In the year we opened our first five stores in China and bought back our Polish Franchise providing us a solid base from which to grow.
"Our strategy is to focus on building and developing the core New Look brand in the UK, internationally and online and on that basis we have taken the decision to explore strategic options for Mim, including potential divestment."
A New Look spokeswoman declined to comment further on the discussions with Asia Global.
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