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Losses shrink at New Look, but revenue is still down

New Look’s group revenue fell by 12.9% year on year to £523.8m in the six months to 28 September 2019, but it managed to reduce its statutory loss before tax by £30.7m.

Its adjusted EBITDA plummeted 31.8% year on year to £42.6m – down from £62.5m in the 26 weeks to 28 September 2018.

The retailer did, however, improve its loss statutory loss before tax by £30.7m to £11.2m, compared with a loss of £41.9m in the same period last year.

New Look’s like-for-like sales in the UK and Ireland were down by 7.4%, which the retailer said reflected “ongoing consumer uncertainty and seasonal volatility”. It also blamed a combination of weather conditions and the retail environment for a “tough” first half.

As part of the chain’s ongoing restructuring programme, it reduced in-store options by 25% and online by 32% during the period; bolstered its “core” and “broad appeal” categories; improved speed to market lead times; and “revived” smaller “profitable” stores.

Other “highlights” include replacing its in-store menswear with concessions, and launching online partnerships with both eBay and Next.

Executive chairman Alistair McGeorge said: “[Chief operating officer] Nigel [Oddy] and the team have made good, tactical progress to improve our product, speed to market and leadership capabilities, all whilst maintaining good control of our stock, cash and costs.

“We are reviewing our customer strategy, and, as I have said before, investing in our leadership, and people will be the single biggest enabler to transforming our business.

“This time last year we were forced to trade for cash to meet our interest obligations and we lacked the financial stability needed to operate effectively and invest in the business.

“Now, with our financial restructuring complete, we are in an entirely different position, with a materially deleveraged balance sheet, lower cash debt servicing costs and strengthened liquidity.

“Even set against the tough trading conditions of the first half, we enter the second half with much improved operational foundations and a healthy balance sheet capable of weathering continuing volatility in the retail and consumer environment.

“Whilst we do not expect the retail environment to improve, we expect a better second half performance as we focus on driving profitable sales, maintaining strong control over our cost base and investing prudently in our people.”

COO Oddy added: “The first half of this financial year has been incredibly busy for New Look, as we focused on strengthening the operational foundations of the business.

“We have reviewed our entire product range, improved our lead times, enhanced the customer journey, revitalised the company’s values, and have begun to make the necessary changes to our leadership.

“As we continue to recover the broad appeal of our product, our offer is now much improved as we focus on buying into successful trends quickly.

“Following a tough first quarter, we delivered positive like-for-like sales throughout July and August, but September was impacted by the unseasonably warm weather. Despite this, we kept good control of our cost base, and all is to play for as we enter peak trading.”

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