New Look jobs at risk as 100 stores face closure
Embattled fashion retailer New Look could close as many as 100 UK stores as part of a radical turnaround plan to cut costs and improve profitability.
This includes the 60 stores marked for closure under a company voluntary arrangement (CVA) approved in March.
Executive chairman Alistair McGeorge said on Tuesday that the number which will definitely close after negotiations with landlords is at 85.
Discussions are ongoing regarding a further 13 stores, of which Mr McGeorge said around half were likely to close.
The company’s new strategy has so far yielded higher profits, but sales continue to decline.
Figures released on Tuesday show that the company posted an underlying operating profit of £22.2 million for the first half, compared to a loss of £10.4 million in the same period last year.
But revenue declined by 4.2% to £656.9 million. Like-for-like sales under the New Look brand dropped by 3.7%, a slower rate than last year’s 8.6% drop.
The high-street mainstay said the slide in sales was in line with its plan to improve profitability with more full-price sales.
Speaking to the Press Association, Mr McGeorge said the first part of the recovery was going well, but that he would like to “move faster”.
“We’re not looking to defend our position, we’re looking to attack,” he said.
In addition to the restructuring of its UK base, New Look last month announced its decision to exit its retail business in China, where it has 148 stores.
Annualised cost savings of £70 million have now been achieved, with another £8 million to be added.
As part of the turnaround, New Look has also improved its UK market share and ramped up online operations, increasing click and collect sales by 41% in the first half.
Mr McGeorge warned that conditions on the high street remain challenging.
“We continue to work hard to accelerate our progress, but we are facing into significant headwinds and uncertainties, including Brexit,” he said.
“Clearly the wider retail environment remains challenging and we are not expecting that to change anytime soon. However, we are on the right track and continue to drive further efficiencies across the business.
“As we look to the second half, our focus will be to continue to improve our financial and operational stability and further capitalise on our brand strength to position us well for the future.”