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New Look focuses on continued transformation as losses narrow but sales fall

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New Look focuses on continued transformation as losses narrow but sales fall

New Look’s new chief executive Nigel Oddy says the retailer will focus on speeding up its transformation plans after reporting narrowing losses – but falling sales. The retailer’s transformation has so far seen it close stores through a CVA (company voluntary arrangement) and offer omnichannel services from its remaining stores, while reducing discounting. Today Oddy said the retailer was now well-placed to grow its sales profitably from here.

 

Oddy, whose promotion to New Look chief executive took effect last month, said: “We have confidence in our offering but remain cautious of the challenging market environment and consumer sentiment. Looking further ahead, our improved product range, enhanced lead times and omnichannel offer means we are well positioned as we focus on driving profitable sales.”

 

The fast fashion retailer, ranked Elite in IRUK Top500 research, today reported total revenue of £830.1m in the year to December 28. That’s 10.7% down from £930.4m a year earlier – reflecting the closure of stores through a CVA (company voluntary agreement) as well as a strategic move away from discounting. Continued consumer uncertainty was reflected in a 7.1% fall in like-for-like sales in its UK and Republic of Ireland market. But at the same time, losses narrowed to £1.2m from £63.2m a year earlier.

 

The retailer says it has improved its speed to market by reducing lead times have reduced by nine days compared to the previous year, while it has also moved its product mix firmly towards items that are considered core and to have broad appeal. These now make up 98% of its product mix, while last year 75% of its range was trend and fashion led. New Look has also revamped 49 smaller stores, and opened 42 concessions for its 915 girls clothing range in store space previously occupied by its menswear range. It says that during the period, it became the UK’s number two womenswear retailer for women aged between 18 and 44, according to Kantar Worldpanel data.

 

The results come as New Look’s management team is recently strengthened through a series of appointments. Nigel Oddy moved from chief operating officer to chief executive last month, while Alistair McGeorge stepped back to non-executive chairman, from executive chairman. Helen Connolly, who previously led Bonmarché, became chief commercial officer, and Clare Dobbie chief customer officer. They join Emma Hayward who became transformation director last November, and David Wertheim, who became central merchandising and supply chain director last October.

 

Oddy said the performance was robust in tough market conditions and that the retailer had “maintained good control over our stock and costs, reduced mark-down activity and our stores outperformed our target market”. He said his focus was on accelerating transformation plans to “ensure we recover the broad appeal and good value cherished by our customers.”

 

He added: “This time last year the company lacked the financial stability needed to operate effectively and invest in the business. Now, with our strengthened liquidity position, we are able to make significant appointments to our leadership team and investments in our stores and omnichannel capabilities, which I am confident will increasingly bear fruit as we look ahead.

 

“As we have said before, investing in our leadership and people will be the single biggest enabler to transforming our business and I am delighted that Helen Connolly, Clare Dobbie, Emma Hayward and David Wertheim have all joined us in recent months. Coupled with our customer strategy review, these senior management appointments form the foundations on which to grow the business once again.”

 

By March 2019, New Look traded from 491 UK stores and 27 in Ireland, having closed 110 as a result of its CVA.

 

Image: InternetRetailing Media/Paul Skeldon

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