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.”
STRIDENT Fast fashion is crucial, says New Look Online firm Boohoo
rivals weeping after posting a 53% surge in sales.
Known for its edgy designs, the firm – which features Spurs’ Dele Alli (right) in its new ad campaign – raked in £183million in the three months to the end of May. Its offshoot Pretty Little Thing saw takings rise 158% to nearly
£80m. Shares in trendy fashion firm Ted Baker tumbled yesterday after it posted weaker then expected results.
The firm, which has normally done well as rivals suffered, announced a 4.2% rise in sales for the past 19 weeks.
But the increase was fuelled by its wholesale arm and opening more stores.
Shares in the company fell more than 1.7%.
Lindsay Page, the company’s chief operating officer, said it was “right to be cautious”.
The bosses of Sainsbury’s and Asda are to be quizzed by MPS over their £12billion merger. Sainsbury’s chief Mike Coupe and Asda’s Roger Burnley will appear before the Environment, Food and Rural Affairs Committee next Wednesday.
They will answer questions on how the proposed deal will impact farmers, suppliers and shoppers.
The merger would create a titan bigger than Tesco, with annual sales of £51bn and 2,800 stores.
QUIZ Coupe, left, and Burnley to face MPS
DIP Ted shares fell 1.7%