New Look eyes more UK space and accelerates overseas expansion

Kristiansen said that despite New Look’s vast 576 UK store portfolio, the retailer was mulling more store openings.

“I see the opportunity for us to take more space in the UK in cities where we’re underrepresented,” he said.

Manchester, Bradford and Taunton were highlighted as locations earmarked for expansion.

Meanwhile, despite revealing this week that New Look was exploring strategic options for its French Mim business - which could result in a sale - Kristiansen said that international growth was its major focus.

“We’re focusing on investing in our future. It’s paid off to invest in new markets”, he said.

New Look is in talks to form a joint venture in Russia, which Kristiansen said was dependent on political stability in the country. It will also open its first German stores this year, along with a local language website.

The retailer has 10 stores in China and is plotting a further 10 this year. It will then accelerate openings when it establishes which type of location works best.

New Look is looking to offload Mim, in which it acquired a majority stake in 2004, which Kristiansen said was not core to its business. Kristiansen said he was not prepared to “give it away” but said Mim was not part of New Look’s mid to long term plans. “We want to focus on growing the New Look brand across the world,” he said.

Despite the IPO rush in retail, Kristiansen ruled out a New Look flotation in the next 12 months, although he said it was a “plausible exit”.

New Look underlying operating profit rose 11.3% to £128.5m but it slumped to a £55m statutory pre-tax loss in the year to March 29, against a £3.1m pre-tax profit the prior year, due to the exceptional non-cash impairment of £64.2m, to write down the value of Mim’s net assets. The retailer also has a £1.04bn debt pile.

Group sales jumped 3% to £1.53bn and group like-for-likes increased 2.2%. Kristiansen said that it was impacted by floods across the UK in February, with 25% of its store estate affected.

The retailer has upped choice for its shoppers by adding products with a more premium price point to its core offer. Its exit price for jeans was £22.99 until earlier this year when it increased to £34.99 by increasing quality and fit.  Kristiansen said it had “virtually sold out” of the products.