Daily Mirror (Northern Ireland)
GRAHAM HISCOTT New Look to slash prices Firm in shake-up as losses soar
STRUGGLING New Look has revealed the scale of the battle it faces as it ramped up a fightback plan.
Bosses vowed to return the lossmaking chain to its budget “fast fashion” roots, with 80% of clothes going on sale for under £20.
It has begun by shaking up its supply chain, how it buys stock, plus gaining approval to close 60 stores and slashing the rents on 393 others.
Executive chairman Alistair Mcgeorge, who was brought back to run the business last autumn, said he was “now seeing green shoots emerge”.
But New Look’s annual report, which came out yesterday, also exposed the dire state of its finances.
The firm’s losses ballooned from £16.6million to £234.2m in the year to March 24.
Sales tumbled 7.3% to £1.35billion, with takings in the UK down 11.7%.
Even its website sales, normally a bright spot for retailers, crashed 19.2%.
Another concern is the firm’s near £1.3bn of debt, built up under private equity ownership. It grew by £120m last year and sucked nearly £82m out of the business in interest payments.
The loss was worsened by £34.2m of one-off costs, including getting shot of clearance stock and ditching plans to move to a new London HQ.
The turnaround plan also includes producing more wardrobe basics and extending its appeal to women aged over 34.
Mcgeorge said: “Since November, we have focused on making the necessary changes to get the company back on track.”
The shake-up should also lead to £70m a year of savings.
But New Look’s annual report said: “While the cost saving initiatives will significantly improve the financial results of the group, there will be challenges over the group’s ability to continue as a going concern if it is not able to improve the trading performance.”