Despite a “stellar” start to its new financial year with a “terrific” set of results, UK fashion chain New Look is no nearer to …
Despite a “stellar” start to its new financial year with a “terrific” set of results, UK fashion chain New Look is no nearer to a stock-market flotation, its chief executive Anders Kristiansen said Tuesday. “A flotation is up to our investors and shareholders,” he said. “But I don’t see it happening in the immediate future.” New Look’s same-store sales jumped 8.9% in Q1 driven by the success of its ranges of kimono-style tops, printed trousers and running shorts.
It said it was particularly pleased with the way it capitalised on the summer’s key trends, having sold 40,000 kimonos a week across its 1,100-strong store estate during the 13 weeks to June 28.
Kristiansen said: “We had great success in identifying and capitalising on key trends and, in particular, we were very good at getting in new supplies when top sellers were about to run out.”
He added that the positive customer reaction to its ranges meant it was able to maximise full-price sales.
Kristiansen added shoppers were putting more in their baskets as New Look stretched its price offer both to cheaper fashions and more expensive items, now ranging £12.99-£60.
Underlying earnings rose 18.8% to £59.4m while group revenues grew 8.1% to £392.5m ($658m).
Domestic same-store sales lifted 11.6% and online sales leapt 39%.
In the UK, New Look plans to close at least two stores this year and longer term will consider closing 13-18 more units which are currently making a loss unless leases can be renegotiated.
International retail ambitions, meanwhile, are now focused on China, Poland and Germany as Kristiansen said plans to enter Russia were “paused” as a result of the current political situation resulting from the troubles in Ukraine. It has now opened 10 stores in China and plans to double that by next spring. New Look has also recently launched dedicated online stores in Germany and France.
Kristiansen warned, however, that Q2 would come up against stronger comparative sales from 2013 and the retailer remains “watchful of the consumer environment”.
But he added: “We have had a pleasing start to the second quarter,” noting the benefit of good weather.
“By the end of [Q1] we had 286 concept stores globally, leaving us well-placed for the year ahead,” he said.
New Look, which currently has net debt of £1.04bn, is owned by private equity groups Apax and Permira, as well as founder Tom Singh.
New Look has received an offer for its loss-making French unit Mim and is confident a deal will be struck. Kristiansen declined to name the suitor for the Mim business, which has over 350 stores, but said Tuesday it was an Asian group that already operates in Europe, though not in retail. “We’re making good progress, I think it will happen,” he said, declining to say what the non-binding offer is worth. New Look had said in June it could sell Mim as France is not a country it plans to focus on.