Turnaround star McGeorge returns to New Look as sales, profits fall further
Ex-star performer New Look has had a tough time lately and Tuesday’s set of first-half results didn’t seem to offer any sign that an upturn is due soon.
The company said it wants to get “back to basics” and improve its womenswear performance but kit isn’t predicting a fast turnaround.
The UK-based value fashion retailer said the 26 weeks to September 23 had bad news on total revenue, comp sales and even e-sales. But there was one beacon of hope. Alistair McGeorge has been named executive chairman with immediate effect. He comes back to the ailing business after having previously led it “through a period of recovery from 2011”.
As a result, Danny Barrasso, who’s been standing in as interim CEO since the departure of Anders Kristiansen just over two months ago, has gone back to his previous role of UK & Ireland MD.
So with McGeorge at the helm, we should expect to see some shake-ups at the business. But that’s for the future. As for the immediate past, the company the 26 weeks to September 23 saw revenue down 4.5% to £686 million, comp sales down a worrying 8.6% and UK comps down an almost-as-bad 8.4%.
And even though third-party website sales rose a healthy 17%, sales from its own website dropped 7.6% - a poor performance in an environment where even struggling store chains usually manage to increase their web sales.
Adjusted profits on an ebitda basis plunged to £24.2 million from £86.9 million “driven by [the] challenging UK sales performance,” and the underlying operating loss was £10.4 million, compared to a £59.3 million profit a year ago. The post-tax loss was a scary £72.7 million after the tiny £0.9 million profit this time last year.
The company said, however, that it retains “an adequate liquidity position” of £242.5 million and even though H2 is likely to stay challenging, the business should be able “to deliver a significant improvement in our performance.”
The new executive chairman added that he’s not expecting “a reversal in fortunes overnight, [but] I am confident we will implement the necessary changes to get the company back on track.”
And that means “ensuring that we buy into the right trends with the right product, have an efficient supply chain, and provide customers with great value. New Look is a remarkable brand supported by brilliant people, and we will focus on getting back to basics and rebuilding our position within the UK womenswear market."
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