Oct 25, 2010
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New Look cautious on relaunching IPO in 2011

Oct 25, 2010

(Reuters) - Budget fashion retailer New Look is ready to revive its flotation plans if market conditions improve but is not sure there will be an opportunity next year, its chief executive told Reuters on Monday.

New Look
New Look's Winter Coats

Carl McPhail said in an interview at the World Retail Congress that trading conditions in Britain were likely to remain tough as the government hikes taxes and cuts spending to rein in its debts, although overseas markets were improving.

New Look, taken private in 2004 by private equity firms Apax and Permira and founder Tom Singh, abandoned plans to raise 650 million pounds in an initial public offering in February amid turbulent financial markets.

"The reality for me is the consumer has got some pain, I think, to go through. I don't think that will flush through for the next year," McPhail said.

"Are we in a position where we could (relaunch the IPO)? Yes. But would we realise the value for the business that we think is inherent in the business and the investment we've made over time? I'm not sure.

"So (we're) cautious about 2011. But, if the markets switch, we'll be there."

McPhail said trading in Britain, where the group makes over three-quarters of its sales, had been particularly tough in the two weeks running up to the government's announcement of spending cuts last week, exacerbated by unfavourable weather.

But overseas markets, where like-for-like sales plunged 12 percent in the year ended March 27, were mostly faring better.

"We see international recovering for us, particularly Mim," McPhail said, referring to its chain of boutiques in France which has seen a change in management aimed at improving performance.

Russia and Poland were particularly strong, while Ireland and Middle Eastern markets like Dubai were still struggling, he added.

McPhail said New Look would consider acquisitions to accelerate its international growth, and was also investing in its online business overseas.

The group, which in recent weeks has ramped up the number of markets it can serve online to 122 from 33, plans to launch local websites in France, Germany and the United States, with one of these likely to come onstream early next year, he said.

(Additional reporting by Victoria Bryan, Editing by Louise Heavens and Michael Shields)

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