No relief for New Look but firm is "realigning" pricing and boosting speed
Troubled retail chain New Look has been making headlines for all the wrong reasons lately and it looks like that’s not about to change any time soon as conditions remain challenging for the firm.
Reporting its year-to-date figures on Tuesday morning, it said that group revenue in the 39 weeks to December 23 fell 6.3% to £1.069 billion and comparable sales were down a worse 10.6%. Its comp sales in the core UK market dropped 10.7% and its own website sales fell a worrying 15%. But at least third-party e-tail sales were up 21.9%.
All that left it with an underlying operating loss of £5.1 million, adjusted profit on an ebitda basis of £43.8 million and a pre-tax loss of a massive £123.5 million.
There was no specific detail about Q3 but it’s clear that the quarter was a tough one. The weak October and discount-focused December had also proved to be a challenge for even some of the most buoyant rival fashion retailers and New Look seems to have suffered along with the rest of the market.
In his executive chairman’s statement, Alistair McGeorge (who only recently rejoined the firm he has helped rescue once before), didn’t try to put a positive spin on the figures. But he did focus on the future and just what the company will do next - something many people will be keen to hear given the major speculation around its future in recent weeks.
“As we expected, Q3 trading remained challenging, with sales and margins impacted by the high level of discounts,” he said. “Our immediate priority is to exit the current financial year without excess stock. By entering FY19 with clean stock levels we will be in a good position to deliver a strong full-price spring/summer offer.”
He said he’s confident that the company is “now making the necessary changes to get [it] back on track” and continues to have “sufficient liquidity to deliver our plans.” In particular, it’s focusing on reducing costs, “recovering the broad appeal of our product and reconnecting with our customers.”
It’s already “realigning” its pricing to offer “significantly better value, adding flexibility to our buying model, and improving our speed to market,” he said. And it’s “working hard to achieve a better alignment between e-commerce and stores. Taken together, this will help to drive future full-price sales.”
“We have a great brand supported by brilliant people, and I am confident we are taking the necessary actions to rebuild our position within the UK market and restore long-term profitability,” McGeorge added.
New Look, which is still the UK’s number one retailer for women aged under 35 (based on Kantar Worldpanel data), also targets men and has expanded its men’s offer fast in recent years opening large numbers of new stores for both women’s and men’s.
It currently operates 907 stores with 594 of them in the UK, but a raft of store closures is expected to be announced some time soon. The firm’s e-tail business also serves over 120 countries.
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