New-look business helps womenswear retailer slash losses
Womenswear retailer New Look has warned it does not expect the tough high street conditions that have claimed many of its rivals to improve.
The youth-focused chain managed to slash its losses as it looks to turn the business around, it said.
Management decided to pull a quarter of the company’s clothing range from stores, and slashed 32% of its offering online.
The decision was a bid to “enhance customers’ experience,” New Look said in a statement.
Changes to its business helped the retailer slash a £41.9 million loss in the first half of the 2019 financial year to £11.2 million in the most recent six-month period, ending September.
“We have reviewed our entire product range, improved our lead times, enhanced the customer journey, revitalised the company’s values, and have begun to make the necessary changes to our leadership,” said chief operating officer Nigel Oddy.
However, the company is still gloomy about the conditions facing high street retailers.
“Whilst we do not expect the retail environment to improve, we expect a better second-half performance as we focus on driving profitable sales, maintaining strong control over our cost base and investing prudently in our people,” said executive chairman Alistair McGeorge.
Like-for-like sales fell 7.4% over the period due to consumer uncertainty and seasonal changes. The decline was lower in the more recent second quarter, at 4.6%.
New Look said it had managed to push online shopping into its stores, with 45% of online sales now ending with a customer picking up their order in a branch.
During the period the retailer introduced concessions to replace its in-store menswear range.
Sales fell in September due to warm weather, meaning customers waited longer to renew their autumn wardrobes.
“This time last year we were forced to trade for cash to meet our interest obligations and we lacked the financial stability needed to operate effectively and invest in the business,” said Mr McGeorge.
Now, with our financial restructuring complete, we are in an entirely different position, with a materially deleveraged balance sheet, lower cash debt servicing costs and strengthened liquidity.”