Fashion retailer New Look has successfully completed a £100m debt refinancing deal as it recorded a full-year loss before tax despite an increase in EBITDA and revenue.
The fashion retailer recorded a 67% increase in adjusted EBITDA for the full year, from £25.2m to £42.2m.
Retail Week can also reveal that New Look has completed the refinancing of a £100m term loan with Wells Fargo, following months of speculation, in a bid to support its future growth, as it provided its latest trading update for the 52 weeks to March 25, 2023.
New Look posted a statutory loss before tax of £87.8m for the period – up from a £25.5m loss in 2022 – which it attributed to a one-off impairment charge of £47.4m following “annual accounting assessment of all tangible and intangible assets”.
Revenue rose from £839.6m in 2022 to reach £844.7m, which New Look credited to its summer ranges being “well-received” and its prioritisation of full-price sales.
New Look noted its sandals, midi dresses, printed trousers and occasionwear categories among its bestsellers, while chief executive Helen Connolly told us that knitwear is going to be the “key category” for the autumn season.
Speaking to Retail Week, Connolly said leveraging its omnichannel operating model in a bid to respond to consumer spending patterns has been key since New look posted record online weekly sales for Cyber Monday last year.
“We have turned focus back on what the core business is about: cost and our strategic investments,” she said. “We often reference omnichannel, as does everyone, but for New Look it has made a meaningful difference. We are really focused on those customers who shop in both channels; they are the ones who are most loyal and the most valuable to us.
“One of the ways we have done that is by keeping our stock tight, so we have been able to chase back into those categories and buy back into those products where customer appetite has been strong.”
New Look also confirmed the company voluntary agreement it launched in 2020 is “on track” to end next year. Connolly said that the brand can now invest back into its stores and eye new additions to its store portfolio.
“We have closed a number of stores, but we are also investing in opening new ones to put our store portfolio in a strong position. We can now start investing back into some refurbishments and we are looking at new store opportunities,” said Connolly.
In terms of outlook, New Look said it remains “cautious” as inflationary pressures continue to take their toll, but it remains “confident” in the long-term appeal of the brand.
Connolly is hopeful that 2023 Black Friday trading will be as successful as last year. “We had our best-ever sales last year during Black Friday weekend, so we’re hoping to replicate that again,” she said.
“We want to maintain a strong full-price position and, throughout the course of November, will look at what promotional activity is there for customers. We’re not going to do blanket promotions; they will be very targeted.”
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