Online sales surge boosts New Look

New LookValue fashion chain New Look returned to annual profits growth thanks to turnaround efforts and a surge in online sales.

The retailer, which has about 600 stores across the UK, clawed its way out of the red with annual pre-tax profits of £3.1 million against losses of £54.5 million a year earlier despite tough high street trading.

Online sales leapt 50.1% after a concerted push for its internet offering, rolling out a click and collect and order-in-store service. The group now has 2.5 million visits a week to its site.

Its stores suffered a more difficult year after sales slumped 3.1% in the first half, leaving overall UK comparable sales 0.5% lower in the year to March 30. But it said trade recovered in the second half, with like-for-like sales up 2% in the final six months.
Britain's coldest spring in 50 years presented a challenge to trading since the year-end but New Look said it had maintained profits growth.

The group also hailed a refinancing of its £1.1 billion debt mountain, which has put the group on a firmer footing. New Look has refurbished 145 stores under a recovery plan and said the remaining shops will be completed over the next three years. It is also curtailing the need for promotions and sales by strengthening its mix of full-price products and scaling back its stock.

Recently-appointed chief executive Anders Kristiansen, who took up the post in January, hailed the success of the group's turnaround. He said: "I applaud the achievements of the past financial year - not only the containment of costs, but also an impressive improvement in underlying profitability."

Underlying earnings jumped 84.2% to £115.5 million in the year to March 30. The group, which has more than 1,100 stores across 32 countries, said same-store sales rose 3.2% across Europe.

It is planning to expand further internationally, with aims to launch 20 franchise stores across China in the 2014/15 financial year, while the group is also setting its sights on India.

Chairman Alistair McGeorge, who was brought into the company in 2011 to reverse its falling sales and profits, said the recent debt deal "gives the business a five-year runway for Anders and his team to continue to improve performance, drive forward our international expansion and develop further our online and store development".