New Look value styles ‘to stem £234m losses’
NEW Look plunged to a loss of £234.2million last year as it paid a price for “alienating heartland customers” in favour of the “young and edgy”.
The fashion chain, which earlier this year agreed a rescue plan with creditors including 60 store closures and rent reductions on others, admitted “significant self-inflicted” problems had compounded the pressures from changing shopping habits.
These also included inconsistent pricing between stores and online offerings as it took on online-only rivals and being too slow to capitalise on key trends.
But executive chairman Alistair McGeorge, brought back to lead a turnaround late last year following an earlier successful stint between 2011 to 2014, insisted substantial improvements had been made to stabilise the business.
The company said it had regained its position as the leading womenswear retailer among women aged 18 to 44, having previously focused on those up to 25, and will sell 80 per cent of its products at under £20.
New Look’s UK same-store sales tumbled by 11.7 per cent and its own website sales were down 19.2 per cent as group revenue fell 7.3 per cent to £1.34billion.
Its pre-tax loss widened from £16.6million the previous year, reflecting the cost of clearing stock and restructuring, but it has identified £70million in annual cost savings. Its debt increased by £120.5million to £1.26billion.
Its performance was brought into sharper focus by online retailer Boohoo showing a 53 per cent jump in quarterly revenue to £183.6million.
McGeorge said: “A higher-priced offering compromised our reputation for value and a drive for improved margins impacted our speed to market. We’ve identified and addressed failures in our planning cycle and supply chain that compromised our ability to back key trends. We’ve been working closely with our key suppliers to shorten lead times.
“We have started the new financial year with a much cleaner stock position and are now seeing green shoots emerge. Focusing on our core strengths and heartland customers will help ensure we remain on the right track.”