New Look’s chief executive has said Poland, Germany, China and Russia will be at least as big as the UK market for the retailer, as its turnaround gathers pace.
The fast-fashion business this week reported a strong first half, with sales growing 6% to £753.2m during the 26 weeks to September 28. Its pre-tax profit of £13.8m reversed the £13.6m loss made over the same period last year. UK sales rose 5% to £579.4m, while online sales – including via third parties such as Asos – rocketed 78.8%.
The turnaround comes 11 months into chief executive Anders Kristiansen’s tenure at New Look, during which time the business has refinanced its £800m debt, made sweeping changes to its senior management and implemented a new pricing strategy, more than halving the number of Sales it runs each year from 12 to five and adopting a ‘good, better, best’ approach to product.
The profits will be reinvested to subsidise value-level product to make it even cheaper, “so that customers don’t lose perception of what we are as a company – and that is a value retailer”, said Kristiansen.
New Look’s management team has also enhanced its international strategy, shifting focus away from territories such as Azerbaijan and Kazakhstan – which Kristiansen said “can never be game changers” – towards Poland, Germany, China and Russia, “all of which can be as big as the UK or bigger”.
Drapers previously reported that New Look had secured eight store leases in China for a spring launch, but it is now planning to open 20 stores in the country by the end of next year. Kristiansen said New Look would be concentrated in clusters around Beijing and Shanghai.
He also plans to expand New Look’s physical presence in Poland, Germany and Russia, having identified growing demand through online sales. International orders made up 7% of takings from its own site, but around two-thirds of its turnover came from Asos.
The refocusing of New Look’s international expansion follows the appointment of Bernhard Ruf as managing director of international. Ruf joined from stationery retailer Staples in September.
Although noting that current trading was “challenging”, Kristiansen said he was confident in “our product, our website, our stores and our people”.