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New Look sales slide but it cuts losses

New Look’s like-for-like sales in stores and on its own website in the UK and Ireland slipped 10% year on year in the 13 weeks to 29 June as unseasonable weather and consumer uncertainty hit footfall.

Total revenue in the UK and Ireland across stores, the New Look website, third-party websites and franchise stores fell 14% to £258.3m.

However, the retailer reduced its statutory loss before tax to £2.7m from £15.5m following its restructuring.

New Look implemented a comprehensive restructuring on 3 May and long-term debt was reduced from £1.3bn to £350m. The retailer also secured an additional £150m of new long-term capital.

Current trading for the eight weeks to 24 August was more positive: like-for-like sales rose 2.2% on 2018.

Executive chairman Alistair McGeorge said: “A key focus during the first quarter was to conclude our comprehensive financial restructuring, which we successfully completed in May, securing the company’s long-term future.

“As we previously announced at our full-year results, first-quarter trading was marked by continued consumer uncertainty and, being a seasonal business, we were clearly not immune from what has been the most unseasonable May and June on record, impacting footfall across the retail sector.

“Despite these challenges, we maintained good control of our stock, cash position and costs. I am pleased our recent trading shows that we have delivered positive like-for-like sales performance and we have outperformed the market according to the British Retail Consortium, which underlines our continued confidence.

“With our restructuring now complete, we have been able to start investing in our leadership and people, and I was delighted to welcome Nigel Oddy as chief operating officer in April, in addition to four highly experienced board members. Furthermore, we now have a chief customer officer in place and have more changes to come.”

Oddy added: “Following a challenging first quarter, we are now starting to see improvements in the second quarter, reflecting the operational changes we are making as we continue to recover the broad appeal of our product.

“‘Broad appeal’ and ‘core’ clothing categories now represent 95% of our product mix and this enhanced offer is resonating with our customers. We are transforming our attitude to buying and are fully focused on buying into successful trends quickly, supported by an improved supply chain. We have also made good progress with our omnichannel strategy, and are now seeing record levels of click-and-collect orders.

“Having visited many stores across the country during my first six months with the business, it is clear to me that New Look’s localness – the breadth of our estate and the convenient locations of our stores – is an inherent strength for us to leverage.

“We are prudently investing in refreshing some of our smaller stores through our ‘Revive’ store refurbishment programme. We have also launched a range of exciting concessions in flagship stores as we look to further enhance the customer experience.

“As we have said previously, our successful financial restructuring positioned us at the starting line. The turnaround continues and we are focused on driving transformational change.”

 

 

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