“Pricing mistakes” cost News Look £60m profit´s fallMonday, 13 June 2011
Group adjusted EBITDA and underlying profit both fell around £60 million compared to last year, totaling £249.4 million and £162.7 million respectively. This whipped off pre-tax results compare to last year´s £36m profit.
Alistair McGeorge, Executive Chairman of New Look, said: “Clearly these are disappointing results, reflecting a business that was suffering significant internal disruption against the backdrop of a harsh and deteriorating consumer economy.
“Additionally, we allowed our price architecture to drift upwards, which undermined our competitiveness and relative value positioning in the marketplace.”
Net debt at New Look – whose private equity owners, Apax and Permira, hold 27 per cent each of the chain – fell only marginally to £1.035bn. The company said it could meet its next repayment of £110m in its 2013 financial year from its cash flow.
As for international sales, they grew 0.5 per cent over the 12-month period and newlook.com is now the second most visited UK women’s clothing website with a market share of four per cent.
New Look is trying to boost trade through a ‘Look and Feel’ store upgrade and refurbishment programme, and has completed work in 331 of its 1,051 outlets worldwide.
McGeorge added: “New Look is now going through a transition to ensure we are firmly focused on delivering, with greater consistency, what our customers expect – great fashion at great prices.” “This is a business with a strong brand and fantastic people and we are confident that we have put in place the right first steps to ensure New Look is returned to sustainable growth,” he assured.
McGeorge, former boss of value fashion retailer Matalan, was appointed to lead New Look in April after former CEO Carl McPhail and former Non-Executive Chairman John Gildersleeve left the company the previous month. Following the ousting of the latter, Tom Singh, who founded New Look in 1969 and still holds a 22.4 per cent stake, returned as commercial director.
The retailer, private equity-owned up to the date, failed in its attempt at a £1.7bn flotation last year but has recently admitted it has shelved hopes of returning to the public markets until it addresses poor trading and its complicated debt structure. New Look’s net debt increased marginally to £1.07bn, despite a £40m loan repayment in the period, reflecting the mounting costs arising from a previous loan.