Fashion retailer New Look has revealed a "disappointing" drop in sales and admitted it had allowed its pricing to become uncompetitive.
The company said like-for-like sales at its 600 UK stores slumped by 7.1% in the year to March, marking a drastic reversal from the 5% rise in the previous year. Operating profits fell to £98m from £162.7m a year earlier.
It has appointed former Matalan chief executive Alistair McGeorge as its new executive chairman, who is undertaking a strategic review of the business.
Its previous chief executive Carl McPhail stepped down in March and founder Tom Singh, who still owns a 22.4% stake in the company, took over while a permanent replacement was found.
Mr McGeorge said the results reflected the tough economic climate and "internal disruption" at the company.
New Look had allowed its prices to "drift upwards" which undermined its competitiveness, he added.
He is guiding the company through a transition in order to ensure it delivers better-value products for shoppers.
New Look saw a deterioration in trading in the second half of its financial year, when UK like-for-likes dropped 9.7%, a situation made worse by the Arctic weather which disrupted trading in December.
The company has promised more items that appeal to the middle market but these new ranges will not hit the shop shelves until next spring.