New Look profits rise at expense of sales

The fast-fashion retailer said that, in anticipation of an “uncertain” market in the run-up to Christmas, it decided to trade for profit over sales, held stocks tightly and reduced the level of markdown.

Like-for-like gross profit was up 4.2 per cent during the period. Gross margin was up 400 basis points against the same period last year. Total group sales grew by 9.7 per cent, driven by space and range expansion in the UK and Europe, according to the retailer.

In a statement, the retailer said: “The gross margin performance has directly benefited profitability and we expect good growth in EBITDA for the full year (£176.6 million).”

It added that, in the UK, it has “consolidated its position as the third-largest womenswear retailer and continues to hold the number-one position in women’s footwear.”

Denim, knitwear and outerwear were the key sales drivers during the period, with “good performances” from menswear and childrenswear.

The retailer said it was pleased with the progress from its New Look-branded stores in France and Belgium, having opened four stores during the year, with a further five planned for the spring. It added that its international fascia Mim “continues to perform well”.

New Look will open a further 14 stores as part of its Middle East franchise by the summer.

Chief executive Phil Wrigley said: “We are pleased with the performance of New Look over the Christmas period. While we expect the consumer environment to remain challenging in 2008, we are confident that New Look will continue to gain market share and deliver further revenue and profits growth.”