New Look profits decline as first-quarter sales slump

The fashion retailer posted a 29% fall in core adjusted EBITDA year on year to £23.5m in the 13 weeks to June 29.

On a statutory basis, the retailer’s pre-tax losses narrowed to £2.7m from £15.5m during the same period the previous year, which it attributed to the debt restructure it completed in May.

New Look’s overall revenue fell 14% during the period to £258.3m, while like-for-likes dropped 10.1%, which the retailer attributed to “highly unseasonable weather and ongoing consumer uncertainty”.

However, the fashion retailer said like-for-like sales in the eight weeks to August 24 had risen 2.2% year on year.

Executive chairman Alastair McGeorge said: “A key focus during the first quarter was to conclude our comprehensive financial restructuring, which we successfully completed in May, securing the company’s long-term future.

“As we previously announced at our full-year results, Q1 trading was marked by continued consumer uncertainty and, being a seasonal business, we were clearly not immune from what has been the most unseasonable May and June on record, impacting footfall across the retail sector.

“Despite these challenges, we maintained good control of our stock, cash position and costs. I am pleased our recent trading shows that we have delivered positive like-for-like sales performance and we have outperformed the market according to the BRC2, which underlines our continued confidence.”

Chief operating officer Nigel Oddy added: “Following a challenging first quarter, we are now starting to see improvements in our second quarter reflecting the operational changes we are making as we continue to recover the broad appeal of our product.

“‘Broad appeal’ and ‘core’ clothing categories now represent 95% of our product mix and this enhanced offer is resonating with our customers. We are transforming our attitude to buying and are fully focused on buying into successful trends quickly, supported by an improved supply chain.

“We are prudently investing in refreshing some of our smaller stores through our ‘Revive’ store refurbishment programme. We have also launched a range of exciting concessions in flagship stores as we look to further enhance the customer experience.

“As we have said previously, our successful financial restructuring positioned us at the starting line. The turnaround continues and we are focused on driving transformational change.

“I am confident the business has the right foundations in place and will continue to strengthen as we attack the future through delivering fantastic product to our customers, building brand equity and grasping new market opportunities.”