New Look to slash prices
Firm in shake-up as losses soar
STRUGGLING New Look have revealed the scale of the battle they face as they ramped up a fightback plan.
Bosses vowed to return the lossmaking chain to their budget “fast fashion” roots, with 80 per cent of clothes going on sale for under £20.
They have begun by shaking up their supply chain, how they 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 their finances.
The firm’s losses ballooned from £16.6million to £234.2million in the year to March 24.
Sales tumbled 7.3 per cent to £1.3billion, with UK takings down 11.7 per cent.
Their website sales, normally a bright spot for retailers, crashed 19.2 per cent.
Another concern is the firm’s near-£1.3billion of debt, built up under private equity ownership. It grew by £120million last year and sucked nearly £82million out of the business in interest payments.
The loss was worsened by £34.2million 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 their 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 £70million 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.”