Sale of New Look 'falls through'

The firm has more than 250 stores

The sale of High Street fashion shop New Look has collapsed after the final two bidders pulled out of an auction for the firm, according to a report.

Investment firms Warburg Pinchus and BC Partners had failed to agree a price with the chain's owners, Apax and Permira, the Financial Times said.

New Look had a £2bn price tag but the bidders would pay no more than £1.7bn, the newspaper reported.

Nervousness over the retail sector had hit the sale, analysts believe.

And at a Treasury select committee hearing into private equity, it was suggested that the reported failure of the New Look deal could be a "straw in the wind", suggesting that there was growing caution about large private equity buyouts.

Apax and Permira - themselves private equity houses - took New Look off the stock market in 2004 after buying it for £699m.

With a sale seemingly dead in the water, it is thought that they will now look to refinance New Look.