Belfast Telegraph

Fashion chain New Look hit by slump as shoppers shun high street

By Holly Williams

Fashion chain New Look - which has around two dozen stores in Northern Ireland - became the latest clothing retailer to be hit by high street trading woes as it revealed slumping sales.

The group said UK like-for-like sales dropped 7% in a "tough" first quarter to June 25.

It blamed "unfavourable market conditions" as it said shoppers stayed away from the high street in what was a difficult spring/summer season for clothes retailers amid uncertainty ahead of the EU referendum, wet weather in April and June and the timing of Easter.

Clothing giant Next recently repeated concerns over a slowdown in consumer spending on fashion as it said Britons were splashing out instead of eating out and experiences.

Next posted a 3.3% fall in sales across its stores in its second quarter to the end of July, although it marked an improvement on the 4.7% slide seen in the previous three months.

Marks & Spencer has also been rocked by dismal trading, with the group's clothing arm suffering its worst sales performance for more than a decade.

M&S last month posted an 8.9% plunge in first-quarter like-for-like sales in its clothing and home division - marking the biggest drop since the March to July quarter in 2005.

But the latest British Retail Consortium-KPMG survey suggested retailers enjoyed a better July thanks to warmer weather.

Sales promotions also helped attract shoppers, with the report showing like-for-like sales rose 1.1% over the period, adding that fashion sales increased "markedly" in July.

New Look - which was bought by South African investment group Brait last year - said underlying earnings fell 29% to £43.4m in the 13 weeks to June 25.

But on a bottom-line basis it swung out of the red to a £2.7m pre-tax profit from losses of £73.7m a year earlier, when it was affected by costs related to the change in ownership and refinancing costs.

New Look chief executive Anders Kristiansen said: "We continued to manage the business for long-term growth in what was a tough quarter, with unfavourable market conditions impacting high street footfall."

The retailer continued to focus on growing areas, such as its menswear offering and expansion in China, where it opened another nine stores, taking its total to 94.

Menswear sales rose 21% in the quarter, with the group rolling out more standalone stores and expanding its ranges.

Belfast Telegraph