New Look was the ugly stain in Brait’s trading update for the quarter to December 2016, as the UK clothing retailer’s valuation fell R10bn following a 42% drop in the previous quarter. "The UK and European apparel and footwear sectors continued to face a challenging, promotion-led market with reduced footfall during the 13 weeks ended 24 December 2016 (Q3)," said Brait. It paid $1.2bn for New Look in 2015. Brait revised New Look’s net asset value (NAV) to R8.7bn, from R18.7bn in the previous quarter. The business now comprises 17% of Brait’s NAV and has been replaced by Virgin Active as the group’s largest holding. A recent rally in New Look bonds and a fall in Brait’s share price suggested that the market might be anticipating an equity issue to refinance New Look’s debt, which stood at about £1bn, said Brad Preston, portfolio manager at Mergence Investment Managers.

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