New Look swings to loss as high street continues to suffer
New Look, owned by South African investment group Brait, booked an underlying operating loss of £10.4 million in the six months to September 23
Struggling fashion chain New Look has swung to a half-year loss as it became the latest retailer to fall victim to tough conditions on the high street.
New Look, owned by South African investment group Brait, booked an underlying operating loss of £10.4 million in the six months to September 23, which compares with a £59.3 million profit in the same period last year.
The retailer’s UK like-for-like sales crashed 8.4% in the period, while total revenue fell 4.5% to £686 million.
Retailers across the board, such as Next, have been stung by rising costs and falling consumer confidence as Brexit-fuelled inflation hits the sector hard.
The results come as growth in non-food sales hit a record low in October ahead of the critical Christmas trading season, according to figures from the British Retail Consortium (BRC).
Alistair McGeorge, who has been parachuted in to the role of executive chairman for another stint at New Look, said the results reflect a “challenging retail environment on the UK high street”.
Mr McGeorge returned to the firm following the abrupt departure of chief executive Anders Kristiansen in September.
At the time, Brait said that Mr Kristiansen’s departure was “mutually agreed”.
Mr McGeorge said: “The immediate focus in this period of transition will be to deliver stability and get the business back to basics by reconnecting with the New Look customer and recovering our broad appeal.
“Whilst we’re not anticipating a reversal in fortunes overnight, I am confident we will implement the necessary changes to get the company back on track.”
The group is also struggling under a £1.2 billion debt mountain and is reportedly in talks with its lenders about restructuring.
But New Look said that it has an “adequate liquidity and cash position” with £242.5 million in cash, liquidity and operating facilities available.
John Gnodde, the chain’s non-executive director, said: “Brait remains committed to being a long-term shareholder of New Look.
“Whilst the second half of the year is likely to remain challenging, the company retains an adequate liquidity position.
“I am confident that we have a fundamentally good brand with a strong team in place to deliver a significant improvement in our performance.”