UK-based fashion retailer New Look has confirmed it is to exit its retail business in China where “performance has been below expectations.”
The retailer today (18 October) said it would close its remaining 120 stores in China by the end of 2018, with the Shanghai head office to close shortly after.
New Look says it has been gradually reducing the number of its store in China, adding performance has been below expectations despite substantial investments.
“This business has not achieved the necessary sales and profitability to support the significant future investment required to continue these operations,” it says.
The withdrawal comes amid an ongoing strategic review of New Look’s other international markets.
In its annual results in June the retailer posted a GBP234m (US$306m) loss.
A restructuring plan followed in March with the retailer announcing the closure of 60 UK stores — a move which saved it from falling into the hands of administrators.
In August it reported an underlying first-quarter profit of GBP14.4m, up 19% from GBP12.1m a year earlier. Sales, however , fell 2.7% to GBP329.4m.
“Having reviewed the trading performance of our business in China and the substantial investment required to continue operations in the market, we have made the difficult decision to exit our stores in China,” says New Look’s executive chairman, Alistair McGeorge.
“As our turnaround plans continue, we remain focused on ensuring that New Look is well positioned to drive strong business performance and profitable growth.”
In its most recent annual results the retailer posted a GBP234m loss.