New Look sales and profits slump as retailer mulls store closures
Struggling fashion chain New Look has posted another set of dismal figures as the retailer continues to consider a raft of store closures.
New Look, owned by South African investment group Brait, posted a pre-tax loss of £123.5 million in the three quarters to December, while sales slumped 6.3% to £1 billion.
The high street chain booked an underlying operating loss of £5.1 million, which compares to a £111.5 million profit in the same period last year.
Like-for-like sales in the UK plunged 10.7% during the period, while online sales through New Look's website fell 15%.
Alistair McGeorge, who has been parachuted into the role of executive chairman for another stint at New Look, said the poor showing reflected a challenging market and heavy discounting.
It is also understood that the company is considering a range of options aimed at improving its performance, which includes store closures.
New Look, which has 594 stores in the UK, is thought to be mulling plans for a Company Voluntary Arrangement (CVA), which would put it on a firmer financial footing by allowing it to shut loss-making outlets and secure rental reductions.
Around 60 stores, or 10% of the store estate, are thought to be at risk of closure.
Mr McGeorge said: "I am confident that we are now making the necessary changes to get the company back on track and we continue to have sufficient liquidity to deliver our plans.
"In particular, we are focusing on reducing costs, recovering the broad appeal of our product and reconnecting with our customers.
"We are already realigning our pricing to offer significantly better value, adding flexibility to our buying model, and improving our speed to market.
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 group is also struggling under £1.2 billion of borrowings but is not seeking a debt restructuring.
Mr McGeorge added: "As we expected, third quarter trading remained challenging, with sales and margins impacted by the high level of discounts.
"Our immediate priority is to exit the current financial year without excess stock.
"By entering full-year 2019 with clean stock levels we will be in a good position to deliver a strong full price spring/summer offer."
Mr McGeorge returned to the firm following the abrupt departure of chief executive Anders Kristiansen in September.