Value fashion retailer New Look has taken the opportunity to cash in on affordable fashion during the recession. The company's chairman and former CEO Phil Wrigley explains how, in the second part of his interview session with just-style news editor Joe Ayling.

Having began his career in the fashion industry as finance director at Debenhams, New Look chairman Phil Wrigley knows his balance sheets. And even on a recession-torn UK high street, is still finding the answer after New Look reported a 10.2% annual profit jump in June.

A key factor to such unlikely growth is a flight to value that benefits those selling affordable but desirable fashion items. However, being cheap does not suffice alone - and certainly would not post-recession.

Aware of this, Wrigley is determined to capitalise on New Look's current popularity, largely within the women's wear sector, and secure the loyalty of shoppers after the economic dust settles.

In addition, New Look's future depends on the performance of its substantial international retail business, e-commerce and supply base.

Wrigley is reluctant to pitch New Look alongside any given retailer, instead pointing out that customers shop with different businesses at different times for different things.

New Look is the number one volume retailer of women's footwear in the UK, and TNS found it to be the market leader in denim retail during 2008 too.

Wrigley says: "The world is your competitor and we look very closely at those people who've got the biggest market share around us, like Marks & Spencer, Next, Topshop, Primark, Dorothy Perkins, George, and Tesco."

Nonetheless, the clear differentiator for a value retailer like New Look is price point, pressured by the weakness of the pound and fluctuation in oil prices during fiscal 2009.

"You can't let customers be bounced around by the challenges to your business model," Wrigley maintains.

Retailing - from Dublin to Dubai
In addition to its 586-store domestic retail chain, New Look operates more than 300 stores in France and Belgium - mainly through its Mim chain - and 23 franchises in the Middle East. It also runs 26 stores in the Republic of Ireland and opened its first store in Russia last year.

Wrigley says: "Dubai has been more difficult [than the UK] due to a number of factors. The economy there has hit difficulties and despite great support from Abu Dhabi there's been a significant reduction of building work and employment in financial services.

"Our franchise operator there, the Landmark Group, is very strong though. They run a very large retail group - bigger than New Look - and are long term partners who are very well prepared to ride out the short-term difficulties of a recession."

Wrigley tells just-style that New Look has seen a weaker performance in France than in the UK too, but notes more success in neighbouring Belgium.

"It's a bit patchy in different countries and different cultures respond somewhat differently to economic challenges it would seem," Wrigley adds.

Having launched its e-commerce site in 2007, New Look is looking to quash doubts about whether value retailing lends itself to Internet shopping too, and has since became the UK's fifth most visited fashion website.

"Almost everything works online. The majority of the population now shop online, going from nothing ten years ago, so it's a real explosion" Wrigley says.

"Online fashion gives the customer more choice and a multi-channel approach is very appropriate for the 21st century.

"A lot of our customers check out things online, don't buy anything but come into the stores. Other people check it out and then buy it online."

The whale-sized ethical challenge
Last year, New Look used 938 factories in 29 countries across the world, and is partly responsible for looking after workers positioned across Bangladesh, Cambodia, China, India, Turkey and Vietnam.

When asked about the company's ethical initiatives, Wrigley points out that New Look is the first retailer to pay a living wage to its main supplier in Bangladesh, and without increasing overtime hours. The garment industry in Bangladesh employs more than 10m people.

He says: "The whole issue with ethics is an incredibly complex one. It's a bit like eating a whale, it's best not trying to do it in one sitting because you'll choke. You just have to be determined, consistent and keep plugging away.

"If we can actually make improvements each month and each year then we feel we're doing the right thing by our customers and staff. But we don't push it down their throats, we don't have a big advertising campaigns, we'd rather be discovered doing the right things."

During the second half of just-style's interview with Phil Wrigley, his measured ideas about sourcing, retailing and staffing make it clear why he's the hot ticket for industry conferences.

Indeed, he stands alongside the likes of Sir Stuart Rose and Sir Philip Green as a true heavyweight of UK retailing.

In physical stature, Wrigley is still nimble enough to turn out regularly at office five-a-side soccer games. "In my head I'm still there but my legs don't get me there fast enough, so I've become a classic cynical hacker at times," he jokes.

There is nothing cynical about him in the boardroom, but either way you'd rather have Phil Wrigley in your team than not.

By Joe Ayling, news editor.

Read the second part of just-style's interview with Phil Wrigley, where he discusses his role as chairman, the flight to value fashion and the global economy here.