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A New Look for Nigel Oddy

Nigel oddy

New Look’s new CEO, Nigel Oddy, tells Drapers how he plans to put the retailer back on top

“It’s a great business, but it had lost its way. This year has been about getting the foundations in place to build and move forward. It’s about transformation rather than incremental change,” explains Nigel Oddy, CEO of embattled high street chain New Look.

The Marks & Spencer alumnus, and former CEO of House of Fraser and The Range, is less than three months into his new role when he meets Drapers at New Look’s flagship on the east side of London’s Oxford Street.

Oddy joined New Look as COO last April – a year after creditors approved a company voluntary arrangement to close 100 stores, and in the midst of the mainstream value-fashion business completing a debt-for-equity swap to reduce its long-term debt by 80% from £1.35bn to £350m.

New Look spring 20

New Look spring 20

And now Oddy is battling the fallout of the coronovirus crisis: “It is very concerning for us. We have two committees dealing with it. The first is on supply chain and manufacturing: we’re working closely with suppliers and looking at moving production, fabric – all those moving components. We’ve had positive news from China in the last week: some production has started again and we have shipments coming over. 

“The second committee is for our colleagues and customers – as far as we can, we are preparing. We are working with Public Health England and other retailers based on what we know today. The committee is meeting every day and we’re assessing what we need to do.”

Aside from the firefighting, Oddy has been working to get the business, and the numbers, back on track.

Rochelle Humes' New Look spring 20 edit

Rochelle Humes’ New Look spring 20 edit

In its most recent financial results for the 39 weeks to 28 December, New Look’s statutory loss before tax narrowed to £1.2m, down from a £63.2m loss in the same period in 2018. However, total revenue fell 10.8% year on year to £830.1m and like-for-like sales in the UK and Ireland declined by 7.1%.

Despite the internal and wider market challenges, Oddy is confident his strategy to return to product with broad-church appeal, focus on the customer and improve the omnichannel experience will fuel top-line growth and re-establish New Look as one of the stalwarts of the UK high street.

New talent

To instigate the turnaround strategy, Oddy has brought fresh talent onto the New Look board. Last summer, Richard Cotter, Angela Luger, Colin Henry and Robin Terrell joined as non-executive directors.

In October, Jack Wills’ David Wertheim became merchandising and supply chain director and, in November, former executive director at Signet Jewellers, Emma Hayward, joined as transformation director. Claire Dobbie started as chief customer officer in January, joining from Marks & Spencer, and in the same month former Bonmarché CEO Helen Connolly was appointed chief commercial officer.

New Look spring 20

New Look spring 20

“From my point of view, the starting point is always about people,” says Oddy, who sports a navy and orange checked jumper from the retailer’s menswear collection. “We needed to bring in more experience and diversity.” Previously, New Look only had one woman on its board, whereas 45% of the board is now female, better reflecting the brand and its customers.

When I joined it was quite clear we had forgotten who our core customer was

Nigel Oddy

With his team in place, the primary focus for father-of-two Oddy has been focusing on the core New Look customer and bringing back the “broad appeal” product she wants. Last year, the retailer made the decision to pull menswear from its stores and make the category an online-only offering, focusing efforts on the key womenswear market.

“When I joined it was quite clear we had forgotten who our core customer was – that shopper who wants to be fashionable but doesn’t want to be ultra-trendy. We had become a high fashion, trend-driven business that didn’t focus on value as much as we should have.

“We talked to our customers and we listened to them. They said they wanted something slightly longer in the body, something that covers their arms, wider straps to cover bra straps – all those things that are broad appeal. It isn’t about age, although our sweet spot for age is 25 to 44. It is about an attitude. It’s about having product that people can wear to a variety to events, in a variety of sizes: that’s what New Look is all about. There’s more work to do, let me assure you, but the reaction has been positive.”

Core and broad-appeal clothing categories represented 98% of product mix in the 39 weeks to 28 December, compared with 75% trend and fashion the prior year. Key womenswear styles for this season include midi-dresses, denim, puff-sleeve tops, barely-there sandals and sneakers.

new look spring 20 5

New Look spring 20

Retail analyst Nick Bubb says creating a point of difference in product will be vital: “It is still competing in a crowded market with the likes of River Island, H&M, Top Shop, Zara, etc, and I don’t see its point of difference. Footwear used to be an edge but that’s been lost and menswear has been unconvincing.”

Core product

Oddy says the retailer is now focusing on four main product areas for growth – going-out outfits, denim, dresses and footwear: “We used to be known for those key departments, and we want to be famous for the famous four. We brought in a new head of footwear buying in the autumn [Annie Dore, former buying manager at Dune] and we’re seeing progress on the year in terms of [footwear] sales and profits. We will continue to develop our other ranges including jersey, knitwear and outerwear, but these are the four where our focus lies as that’s what our customer wants from us.”

Over the past year, New Look has been working to increase its speed to market by moving production from China closer to home. China remains its biggest country for manufacturing, accounting for 20% of clothing, followed by Bangladesh, Sri Lanka, Pakistan and India. Oddy declines to provide a breakdown, but reveals New Look has in the past year increased its near-shore production in Turkey, Morocco, Moldova and the UK, and improved the speed to market of products by nine days.

We are a high street retailer. That’s where our roots are

Nigel Oddy

The business can now buy into trends rather than risk over-ordering the wrong product, Oddy explains: “We now have a mentality of chase rather than cancel. We have a higher proportion of open-to-buy [budget], which has resulted in a significant reduction in markdowns and less stock in the business at any one time, and, therefore, more working capital.”

new look spring 20 4

New Look spring 20

Another area of change is New Look’s store portfolio. Under the CVA, confirmed in March 2018, New Look closed 100 stores, leaving it with a UK portfolio of just over 500 shops. Following further lease negotiations with landlords, it now has 480 stores and 200 leases still to negotiate. Oddy says the overall number of stores may fluctuate up or down slightly but the overall mix is right.

“We are a high street retailer. That’s where our roots are. [New Look started as a single high street store in Taunton in 1969.] The high street is an important part of our business and we are investing in it. Some more stores will go in the future and indeed there will be stores that may come into our portfolio as the CVA resulted in us losing stores in some towns we didn’t want to lose.”

The business has three new stores in the pipeline, but it will not reveal locations as negotiations are ongoing.

Analyst Richard Hyman argues the retailer still has too many shops: “In competitive terms, a lot of its issues are faced by most, but New Look is a very big animal. It feels the extent of the pressure more keenly than others because it is such a big player. It has far too many stores and quite a few of them are too big – that is dragging down its performance. The results they have seen so far are about cost reduction, not about revenue growth – it needs to get smaller and it needs to get back to that core customer.”

In terms of store investment, New Look has added beauty halls to 12 of its stores over the last year, including its branch on Gracechurch Street in the City of London, offering nail and eyebrow treatments. It has rolled out 42 concessions from brands including Missfiga, Apricot and Quiz in former menswear store space. It has also overhauled several in-store areas for its tween 915 girls’ range, which seeks to fill the shoes of the now defunct Tammy Girl. The basement of the Oxford Street store has been transformed by graffiti selfie walls and mini-me ranges, emulating the womenswear offer on the floors above. More are being considered on a case-by-case basis.

Last year, the retailer also revamped 45 shops under its “Revive” programme, which focuses on smaller, local stores of 1,500 sq ft to 5,000 sq ft. Improvements in shops, including its Walthamstow branch, range from a coats of paint and new lighting to new flooring and new click-and-collect and till areas. A further 50 shops will be refurbished this year.

Keeping it local

Oddy views this local approach as one of New Look’s biggest opportunities moving forward: “Not [every competitor] is in those small towns. We have less and less competition in those areas. Those shoppers still want to go out, they still want to buy an outfit for a christening or a wedding. That accessibility of our stores and instant gratification is a real opportunity for us.”

My target this year is to make our store managers feel like business managers

Nigel Oddy

To capitalise on this local approach, Oddy has changed the way stock is allocated, and given store managers more responsibility.

“In the past, we would allocate stock depending on the size of the store, but we didn’t take into account where the store was. I went up to Inverurie in Aberdeenshire, and we didn’t have a range of umbrellas and coats because it was a “grade 8” store, and grade 8 stores don’t have those. It sounds crazy, but it is true. We are addressing that.

“My target this year is to make our store managers feel like business managers. They know their local customer, they know their local environment, they know what the strengths and weaknesses are. If we can do that, it will help the overall profitability of the business.”

The stores, too, play a key part in New Look’s online business, as 50% of online sales involve click and collect: “We have a point of difference from a lot of our competition as we have almost 500 stores and an online operation. Many of our competitors either don’t have that volume of stores or don’t sell online, but 90% of our target customers are within a 10-minute drive of one of our stores – that makes us convenient and accessible.”

Sales from New Look’s own website make up just under 20% of the total mix, while all online sales – including through its third-party partners including Asos, Next and Zalando – have hit 30%. The business is upgrading its online platform later this year to Hybris 4 and is also investing in its SEO, social media channels and email marketing.

“We recognise we need to do more on social media and emailing. We need to do a whole piece around SEO, as it’s an area we haven’t done a good job on if I’m honest, but we are working on it and we are starting to see some positive moves in that direction.”

Internationally New Look has 28 stores in the Republic of Ireland and six franchise stores in Libya, Tunisia and Malta. Online presents an opportunity internationally for the business, following the closure since 2018 of all its stores in China, Poland, France, Belgium, but Oddy is adamant the business must focus on getting its UK arm back in the black first.

“At some point we need to revisit international, but it isn’t part of our short-term agenda as we’ve got to get the UK right. [That will] come through third-party partners and marketplaces rather than bricks and mortar – that will all need investment.”

New Look spring 20

New Look spring 20

Oddy describes the current market as the most difficult he has encountered in his 40 years of retail, and the business’s biggest challenge: “Over the last three weeks we’ve had two of the biggest storms [Ciara and Dennis], the wettest February on record, coronavirus, and there’s still a lack in consumer confidence from Brexit and business rates [to deal with]. The headwinds out of our control are stronger now than I’ve ever experienced in my career.

“But there are things we can control: costs, product, how stores look, how our colleagues approach and help shoppers. It is survival of the fittest, so I tell the team to focus on what they can influence.”

Over the next 12 months, Oddy will be focused on growing the top line and rebuilding the business to its former heights: “You can only cost-save for so long. Over the last 10 months, we have built a great foundation for the business, so now we can really start to drive that top-line growth.

“Our EBITDA was over £200m not that long ago [compared with an adjusted EBITDA of £78.6m in its most recent results]. It’s not impossible to get back to being a key player in our key categories. The team is focused on it, and we know our customer better than we ever have. I believe we can get our business back to where it was.”



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