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New Look set to pounce on overseas shops

High street multiple New Look is understood to be eyeing up struggling international chains to speed up its overseas expansion strategy.

Sources told Drapers that New Look management was ready to pounce on a chain of shops or bundles of stores that may become available from a Woolworths-style retail collapse in Europe.

The retailer has already opened a small number of New Look stores in France, Belgium and Holland as well as opening franchises in the Middle East and Russia as part of its ambitions to become a “truly global retailer” on the scale of young fashion chain H&M or Zara owner Inditex.

Observers said New Look would be looking closely at under-performing chains purely for real estate purposes, although they pointed out its strategy so far had been to grow organically overseas.

New Look chief executive Carl McPhail told Drapers: “If clutches of stores became available in Belgium, France or Holland such as the Woollies or Littlewoods [closures] that happened here in the UK then, yes, [we’d consider it]. We’d have the money to buy something but I don’t think we’d be looking to buy a brand as we did with Mim [New Look’s French basics chain].”

In February, New Look hired fashion group Esprit’s head of global retail Lex Gemas as chief operating officer to oversee its international plans. His focus has since switched away from France, Belgium and Holland to developing new markets.

Meanwhile, New Look posted record results this week with sales up 14.9% to £1.32 billion for the year to March 28. EBITDA rose 10.2% to £217.6m. Like-for-like sales in the UK and Republic of Ireland were up 1.4% over the year.

New Look said it had leap-frogged Next to become the second largest womenswear retailer by value market share. Over the year it put on 0.7 percentage points, due to shoppers buying more from value chains than the middle market during the recession, to take its share to 5.4%.

New Look also said it had drawn customers away from rivals value chain Primark and Marks & Spencer. McPhail said: “We see from our research that we are getting Primark, M&S and Next customers looking at us.”

The chain said that its strategy to focus on trend-led product at value price points had paid off and that it planned to up the amount of product designed in house from 71% of the range last year to 85% this year, to boost margin and further differentiate its offer from rivals.

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