New Look’s Profits Torn To Shreds
New Look had a disastrous year in 2010. Pre-tax profits have all but vanished completely.
New Look floated in February 2010 with a value of £1.8 billion but just over a year later they are struggling to make a profit. CEO Alistair McGeorge blames internal disruption, including some poor decisions on fashion ranges, pricing and cost controls. Also New Look lost a lot of experienced buyers after moving the team from Weymouth to London (not a move which will appeal to many people!).
Overall sales are down by just over 7% although the high street stores have actually fared worse, fortunately they have been bolstered a little by increased online sales.
New Look found themselves in a downward spiral as declining sales prompted them to bring out new promotions and discounts which in turn failed to bring in increased shoppers so further reduce profits.
In 2009 New Look made a £36 million profit but just one year later it is struggling to make a profit.
New Look seems to be another victim of the retail decline and rise in Internet shopping.
New Look Full Year Results
- Total sales -0.2% to £1.46bn (£1.46bn)
- Group like-for-like sales -5.5% (2010: +1.2%)
- UK (inc. e-commerce) like-for-like sales -7.1% (2010: +5.0%)
- International like-for-like sales +0.5% (2010: -12.4%)
- Group adjusted EBITDA £190.2m (2010: £249.4m)
- Underlying operating profit £98.0m (2010: £162.7)
Alistair McGeorge, Executive Chairman, 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.
Find out more from the New Look investors advice pages: www.newlookgroup.com/newlook/en/investors/irhome