Chairman Alistair McGeorge will focus on fast fashion with broad appeal.
New Look chairman Alistair McGeorge has vowed to return the business to its roots as a fast-fashion, value-led retailer which appeals to a broad church of customers, after he said the business had “slowed up”.
McGeorge, who was appointed to the business in April two months after the ousting of chief executive Carl McPhail and departure of chairman John Gildersleeve, said disruption caused by the move of New Look’s buying, design and merchandising functions to London and the exploration of a potential flotation last year meant “everything had slowed up”.
Pre-tax profits at the retailer were wiped out in the year to March 26. Underlying operating profits slumped 40% to £98m while the UK business suffered a like-for-like drop of 7.1%.
McGeorge said: “We have to go back and reset what we are all about. We were fast fashion and slow supply chain.” The business had also become “too young” following the loss of 50% of its buyers in the head office move from Weymouth, he added. The former chief executive of Matalan said New Look would return to focusing on its 15 to 45-year-old customers.
In a bid to speed up lead times and reintroduce fashionability, New Look will review its supply chain, increase its open to buy budget and ensure best-selling products remain in stock while reducing markdowns.
New Look’s pricing has also been revisited after McGeorge said it had been weighted too heavily in the upper bracket. Customers had the impression the business was more expensive than its rivals when prices were in fact often lower, he said.
“I’m not saying we can’t sell a jacket for £60 or £70 or even £100, but we can’t put the weight of the product there,” he said.
It is not yet decided by how much prices will change for autumn 11. They rose 4% in autumn 10 and by 3% for spring 11 but stabilising cotton prices could bring some respite in the latter half of the year.
McGeorge will focus on the UK as part of his turnaround, including store refurbishments. Multichannel and international will grow off the back of a strong UK business, he said. Womenswear remained the “single most important thing to get right”, he said, while menswear remained key but had become too young.
So much was made of New Look’s move to its all-singing, all-dancing head office in London two years ago. The move was driven by previous management’s attempts to become a truly global player on a par with H&M and Zara.
However, in the excitement of a record 2009/10 and the desire to IPO, the business took its eye off what it did best - value-led fashion for shoppers of a broad age range.
In his first meeting with journalists, Alistair McGeorge came across as battle-hardened from his time running rival Matalan.
McGeorge is right to go back to the coalface to focus on the UK, cut costs and drive the product areas in which New Look is strongest. Too much attention was paid to international expansion to sell New Look’s flotation potential.
Pricing and speed of product to stores is key in this re-stitching of a business unravelled by chasing the bright lights of public ownership.
Amy Shields, news editor