New Look eyeing 2 billion flotation

British high street fashion heavy weight New Look has reportedly hired JP Morgan to look at options for a stock market listing, which could value it at 2 billion pounds. The retailer has recently reported a 1 percent quarterly dip in its domestic like-for-like sales.

According to Sky News, the flotation will be managed by the New York-based investment bank and would be valued at circa two billion pounds.

Earlier this month, the retailer’s chief executive officer, Anders Kristiansen, said on a call with reporters after New Look reported a decline in third-quarter sales: “It’s a business that’s ready, but it’s not my decision to decide when we should do an IPO or not.” “It has to be the shareholders that take the decision,” he added.

It is worth to remember that the retailer postponed its earlier IPO plans in 2010. But now, and as New Look’s CEO somehow hinted on that call with reporters, Britain’s second-biggest retailer of women’s clothing would be equipped for an initial public offering amid renewed speculation its private-equity holders are seeking an exit, reported Bloomberg.

As market insiders remind, Apax Partners and Permira Advisers, which acquired a significant stake in the company back to 2004, are reportedly working with Goldman Sachs Group Inc. to seek new investors.

Analysts not sure about good timing for an IPO

However, there is certain disagreement amongst analysts covering the stock regarding whether New Look is ready or not for an IPO. “It’s still too early to try a float and they must continue to work on rebuilding the track record,” said earlier this month Nick Bubb, an independent retail analyst in London.

According to third-quarter financial results released last week, New Look saw like-for-like sales in the UK declined by 1 percent, a dip that it attributed to unseasonably warm weather. Anders Kristiansen, its chief executive, described New Look's trading performance as "robust...against a challenging backdrop".

"It was a record online sales performance over the Christmas period with all channels well-prepared for peaks in demand around Black Friday, Cyber Monday and Boxing Day, whilst our high street presence came into its own as we handled a surge in demand for our Click & Collect and Order in Store offerings," he said in this vein.