New Look’s profits rise as fashion chain pushes ahead with turnaround
The retailer’s sales fell, but declines have moderated.
New Look has reported an increase in profits as it pushes ahead with radical plans to cut costs and appeal to a broader range of shoppers.
For the 13 weeks ended June 23, New Look’s total revenue fell by 2.7% to £329.4 million, down from £338.7 million during the same quarter last year.
New Look brand’s like-for-like sales were down 4%. However, this was an improvement on the 8.2% decline recorded last year.
Adjusted earnings before interest, tax, depreciation and amortisation stabilised, rising 1.5% to £27.6 million.
Underlying operating profit increased from £12.1 million to £14.4 million, up 19%.
The retailer said the rise in earnings was supported by cost savings.
New Look has been pushing through a radical store closure programme though a Company Voluntary Arrangement (CVA), leading to hundreds of job losses.
New Look is shutting 70 stores as part of the CVA plans, affecting close to 1,000 jobs.
The retailer has achieved £70 million of cost savings in the first quarter, and is looking for more savings in the months ahead.
We will deliver further operational efficiencies whilst maintaining our resolute focus on our core strengths and heartland customer to ensure we remain on the right track Alistair McGeorge
To help restore the retailer to health, Alistair McGeorge, who was formerly executive chairman between 2011 and 2013, has returned to the business.
Mr McGeorge has been bringing down prices to make sure New Look can appeal to a broader range of consumers.
“As we recover the broad appeal of our product, we were pleased to improve our market performance and deliver better customer conversion rates. This shows the strength and resilience of our brand, and the positive impact of the changes we are making,” Mr McGeorge said.
“Our turnaround plans continue, and we will deliver further operational efficiencies whilst maintaining our resolute focus on our core strengths and heartland customer to ensure we remain on the right track.”