Kristiansen said he has no concerns about working conditions at its garment factories in Cambodia

Kristiansen said he has no concerns about working conditions at its garment factories in Cambodia

UK value fashion retailer New Look has said it has no concerns about the working conditions at its supplier factories in Cambodia, with CEO Anders Kristiansen stressing that corporate social responsibility is core to its business.

Speaking on a conference call this morning (3 June), CEO Anders Kristiansen said: "We are extremely keen on being as ethical as anyone can be.

"We're adamant about making sure that we treat our employees in the factories with the highest respect, make sure we pay minimum salaries, and that they have proper working conditions. We are all over it, whether that's in Cambodia, China [or] Bangladesh. This is core to our business."

New Look was among a number of fashion brands that took part in talks with the Cambodian government in Phnom Penh last week, over the alleged violation of worker rights in the country.

According to IndustriAll Global Union, the retailers suggested they would be prepared to factor in the cost of higher wages for garment workers in Cambodia when sourcing from the country.

The union and the brands also called for "clear timelines" regarding a new trade union law and wage-setting mechanisms, with the Cambodian government saying new research on the process will be released in mid-June.

Although Kristiansen declined to comment on last week's talks during the call today, he said there is "really good spirit" in its factories in Cambodia.

When asked whether recent mass faintings and ongoing worker unrest in the country was a concern, he told journalists: "We have got excellent working conditions in those factories so it doesn't concern me, because we have had our people there a month ago to see the factories.

"We certainly don't have anyone fainting there."

Full-year performance
The comments come after New Look swung to an annual pre-tax loss of GBP55m (US$92.2m), which included a GBP64.2m non-cash impairment charge to write down assets of its French retail chain Mim.

New Look, which is owned by private equity firms Primera and Apax Partners, also announced it is exploring strategic options for Mim, including a potential sale.

Although Mim posted an EBITDA loss during the 52 weeks to 29 March, Kristiansen said the division has seen "positive results" in the first two months of the new year.

"I'm happy that I've had our management there to turnaround the business...The last couple of months have been good to us," he explained. 

He said there has been "interest from outsiders to potentially acquire the business", but stressed there are also other opportunities for Mim. 

During the year, New Look's group sales rose 3% to GBP1.53bn from GBP1.48bn. In the UK, like-for-like sales grew 3% despite a "challenging" fourth quarter, when flooding impacted 25% of its stores.

Outlook
The retailer, which operates 576 stores in the UK, sees an opportunity to take more space this financial year, by expanding smaller stores and opening stores in cities it is not already in.

Although there is no goal as to how many stores New Look wants to open in the UK, the company aims to take more market share. 

"Unlike many other retailers in the UK, we actually have a very positive outlook for both online and but certainly also for retail," Kristiansen said.

"We believe that there are opportunities in the UK, not only in the UK but other European markets and in Asia, with China."

In China, where New Look operates ten stores, Kristiansen plans to open a further ten stores in fiscal 2015, adding: "We're very happy about the opportunities we have in China."

"In summary, we will continue to invest, we'll continue to expand rapidly in China, we see an opportunity for further stores in the UK - we believe in the market." 

Separately, New Look has ruled out a potential initial public offering (IPO) for at least another year. Kristiansen, who earlier this year said he had no plans to list on the stock exchange in the next year, today said: "I think once we have implemented all of the things that generate value then an IPO could be a viable option, but I don't see that happening in the foreseeable future."