UK: New Look to shutter up to 100 stores
- Full-year EBITDA fell to GBP147m from GBP191m
- Sales declined 2% to GBP1.5bn
- Like-for-like sales declined 5.9%
UK retailer New Look has said that it will look to shut up to 100 stores and has agreed to delay paying back its debt after it recorded a fall in full-year profits.
The company said that full-year EBITDA fell to GBP147m (US$229.7m) from GBP191m in the prior year. Sales were down 2% to GBP1.5bn, with like-for-like sales declining 5.9%, excluding VAT. In the UK, like-for-like sales, excluding VAT, declined 5.7%.
Over the year, the company said it has made considerable progress in its efforts to improve ranging, pricing and quality, and broadening its appeal across its customer base. "We continued to keep tight control of inventory and worked to improve lead times to give us greater flexibility to buy into the key seasonal trends. Looking forward, this focus will allow us to reduce our markdown and improve gross margin," the company said.
It is also working to address "more fundamental structural issues" which have impacted the whole of the retail sector. As a result, it is working to improve its multi-channel offer with click and collect and in-store ordering. New Look is also working on its store portfolio and has decided that the growth of online shopping is likely to result in 50-100 fewer stores than it has now.
"However, stores will remain a vital part of our multi-channel offer and we have trialled a new store concept during the year to improve the customer shopping experience. Following some very encouraging results we are now planning to launch a roll out across our store estate with an initial 120 stores to be refurbished in the coming financial year," it said.
The company has agreed to to extend its debt repayments to April 2010. Net debt is in line with last year at GBP1.1bn, and it currently has GBP212m cash at the end of the year, up from GBP191m at the end of the prior year.
"When I joined the business a year ago we were facing significant internal disruption, we had lost our edge in terms of our value position and alienated some customers with our ranging," said executive chairman Alistair McGeorge.
"All this meant we had undermined our competitiveness on the high street.
"We have made significant progress in addressing these issues - work that will continue through this year. We are completely focussed on delivering a better customer experience, whether it be in store or online. We are also continuing our work to ensure we have a strong brand and a distinctive proposition that generates improved customer loyalty."
Value fashion retailer New Look has today (20 November) seen its half-year profits rise 25.2% despite a decline in sales....
Value fashion retailer New Look has moved to reassure suppliers over its financial position after reports surfaced last week suggesting it was poised to enter administration....
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