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New Look ramps up expansion strategy

New Look is scouting for its third location on London's Oxford Street as it steps up its aggressive opening plan.

Chief executive Phil Wrigley, who led a £700 million management buyout of the business in April 2004, told Drapers the chain is expected to open 450,000 sq ft of new space in the year to March 2008.

It aims to increase the average New Look store size to 15,000 sq ft, from the previous average of 3,000 sq ft three years ago.

Wrigley said: "We have identified much of the space. We are under- represented in Greater London and Oxford Street, and we will continue to look for opportunities in those areas."

The retailer will increase its presence in shopping centres by March 2008, with half of all new stores opening in malls, up from 46% last year.

Retail park stores will account for 18% of new openings, up from 17%, while the high street will make up 32%, down from 37% in the year to March 2007.

The business, which opened eight New Look stores in Belgium and France over the past 11 months, is also poised to unveil its first store in the Middle East under a franchise deal.

Wrigley added: "We believe we can double the size of the business in at least 10 years. But we will learn to crawl before we can walk. We will take the New Look brand into new markets and make sure they are fully understood before we commit to an aggressive roll-out. But there is no reason why the brand wouldn't work in other European countries."

The retailer unveiled a set of solid Christmas trading figures last week. Wrigley said that given the healthy state of the business, "a change of ownership might be considered this year".

Apax and Permira - which own 66% of the business and backed the MBO in 2004 - have had more than twice their initial investment back, said Wrigley. "If there was interest (in acquiring the business) at a reasonable price, then I am sure they (Apax and Permira) would be interested," he said.

Like-for-like sales at New Look were up by 3.2% for the 14 weeks to December 30 2006, while total group sales rose by 26% against the same period last year.

Growth was driven by strong demand for longer-length knitwear, dresses, coats and skinny jeans.

However, Wrigley added that footfall fell dramatically in the first part of December because of the mild weather.

By March this year, New Look will have opened 800,000 sq ft of new space, boosted by the acquisition of 33 Littlewoods stores in January last year.

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