New Look increased total sales for the first half by 4.7% to £788.6m by shifting heavier stock, such as coats and knitwear, from the balmy UK to a colder China.
The retailer, which currently has 14 stores in China and another six scheduled to open before the end of the year, said having international business helped it to combat the unseasonal September weather in the UK.
Chief executive Anders Kristiansen said: “It’s so important to have a global business as it is coat weather at the moment in China and sales are continuing to grow there. It helps us to manage the difficult conditions here better. We are able to shift stock from the UK over to where it is needed. It’s a great advantage.”
In the first quarter New Look’s total sales increased by 9.1%, but grew by only 2.4% in the three months to September 27. Underlying operating profit was up by 18.5% to £84m for the six month period, while profit before tax grew by 81.9% to £26.1m.
New Look has 30 more Chinese stores in the pipeline for the next financial year. It is also adding four more stores to its portfolio of 11 in Poland.
While the high-street chain is ramping up expansion in certain territories, it has exited Russia and Ukraine due to political uncertainty. New Look stated in August that operations were “on hold” in the region and this week confirmed it has “walked away” from its franchise partners. New Look had 20 stores in Russia and six in Ukraine.
“It wasn’t right for us to invest when the political situation wasn’t stable. We would rather invest in China and Poland,” explained Kristiansen.
The chief executive also admitted the group had invested in too many small markets that did not generate enough sales and so has pulled out of Thailand and Morocco - where it had one store apiece - in the last nine months.
“We are trying to keep things focused,” he explained. “In the past we were in 28 small markets and when you added the sales together they made up less than one store in Southampton.”
Kristiansen said he expected another discount-fuelled Christmas on the high street, but insisted New Look was “well prepared” for the festive sales rush.
“How deep our friends on the high street will go I don’t know, but one thing is certain: there will be discounting. We are well prepared and we have a few promotions planned. Check and tartan will continue to do well for us.”