New Look has almost doubled its half-year EBITDA for the 26 weeks to 22 September 2018, up to £49.8m compared with £24.2m in the same period last year. However, the retailer’s sales continue to slow.
Revenue fell by 4.2% on the same period last year to £656.9m. New Look own-brand sales fell by 3.7% – although this was a smaller drop than the 8.6% in the previous year.
Underlying profits rose to £22.2m, compared with a £10.4m operating loss in the same period last year.
The rising profit figures show signs of a turnaround for the retailer, which has focused on improving the profitability of sales in womenswear categories.
In March, New Look’s company voluntary arrangement (CVA) deal was approved by creditors, in a move set to lead to almost 1,000 job losses and the closure of 60 stores.
Some £70m worth of annualised cost savings have now been put in place by New Look, and a further £8m of savings have been identified.
Last month New Look announced that it was set to withdraw from the Chinese market, closing all 120 stores it operates in the country. A strategic review of other international markets is ongoing.
Commenting on the results, executive chairman Alistair McGeorge said: “I am encouraged by our performance in the first half of the year, which reflects the progress we are making with our ongoing turnaround plans to rebuild our position in the UK womenswear market. The significant cost savings that have been implemented are delivering improved profitability, and we continue to see better performance in our new womenswear ranges.
“We continue to work hard to accelerate our progress, but we are facing into significant headwinds and uncertainties, including Brexit. Clearly the wider retail environment remains challenging and we are not expecting that to change any time soon. However, we are on the right track and continue to drive further efficiencies across the business.”