New Look swings to profit as turnaround efforts continue

For the third quarter, group underlying operating profit at New Look reached 38.5 million pounds (49.6 million dollars) compared to underlying operating loss of 5.1 million pounds in the third quarter of FY18. Revenues were down 5 percent to 1,016.1million pounds (1,310.6 million dollars) for the third quarter, which the company said were in line with expectations given focus on driving more profitable sales. New Look brand like-for-like sales were down 2.3 percent compared to a 10.7 percent decline same quarter last year. Like-for-like sales in the UK were positive at 0.9 percent.

Commenting on the third quarter results, Alistair McGeorge, Executive Chairman of New Look, said in a statement: “Today’s results show that we continue to make good progress in delivering improved operational and financial stability despite the challenging retail environment. However, we have more work to do and our focus is now on accelerating our turnaround plans.”

New Look continues to implement its turnout strategy

The company added that adjusted EBITDA increased 75 percent to 97.7 million pounds (126 million dollars) supported by cost savings, while group adjusted EBITDA increased 78 percent to 78 million pounds (100.6 million dollars).

Elaborating on its turnaround efforts, the company said, broad appeal product performance continues to improve and it managed to improve profitability in key womenswear categories such as dresses and ‘tops and bottoms’ with some challenges being addressed in footwear and accessories. In-store and e-commerce customer conversion rates also improved and ecommerce profitability increased significantly. Click and Collect footfall into stores also witnessed a steady rise, increasing to 47 percent of online sales mix. The company achieved 78 million pounds of annualised cost savings.

The company had earlier announced that New Look Belgium, which operates six stores was unable to continue trading and administrators were appointed and it also decided to exit retail business in China, with all stores closed as of January 1, 2019. The company further said that it continues to carry out strategic review of other non-core international markets.

Picture:Facebook/New Look