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Still work to do, says Oddy, as New Look cuts losses

New Look is focusing on core, broad-appeal products, and improving customer experience in store and online to get the retailer back on track following a volatile first half, chief operating officer Nigel Oddy has told Drapers.

Nigel oddy house of fraser

Oddy: New Look hit by ”ongoing consumer uncertainty and seasonal volatility”

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 reduced its statutory loss before tax by £30.7m to £11.2m.

Adjusted EBITDA plummeted 31.8% year on year to £42.6m. Like-for-like sales in the UK and Ireland were down by 7.4%, which New Look said reflected “ongoing consumer uncertainty and seasonal volatility”.

Oddy said that, despite a difficult first half, the business was pleased with its performance: “We have been very busy over the last six months and a lot of that hasn’t borne fruit yet. Since May we have put the business in a very strong position [for future growth].

“The new product better reflects our customer mix and it differentiates us from our competition. We have gone back to what we know was our strength, and we are starting to see good traction.”

“Core” clothing categories represent 98% of the autumn 19 product mix, compared with 75% “trend” and “fashion” product last year.

New Look reduced in-store options by 25% and online by 32% during the period, and improved speed to market by cutting average lead times by 12 days. Oddy said he wanted to reduce lead times to below 10 weeks in the second half of the financial year. 

New Look has invested in 45 of its smaller-format stores since May, and is improving the layout and customer journey. From the beginning of the autumn 19 season the retailer has replaced menswear in stores with womenswear concessions, including AX Paris, its teen offer, 915, and beauty lounges in five stores.

Oddy said the business, like all retailers, had been hit by external factors: “We had an awful first quarter, a better July and August, and then in September we were hit again by unseasonable weather.

“However, the most important factor is the uncertainty in the economic outlook. Brexit, the election – it continues to be very tough. We just want certainty – that’s what our shoppers want.

“Those things are out of our control. We need to focus on what we can control: the customer experience, the product. We are customer obsessed. There is still work to do but we are really focused on the task at hand.”

In the run-up to Black Friday and Christmas New Look has a series of planned promotions but is focusing on profitability, Oddy said: “For Black Friday last year, we were trading for cash. Now we want to trade profitably. We have worked closely with suppliers on stock for Black Friday and we have a series of promotions in the lead-up. We will continue to trade as much full price as possible.

“In the run-up [to Christmas] it will be a tough retail environment, but we are in a good place, and we continue to work hard on the things we can influence.”

 

 

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