New Look has reported a narrowed pre-tax loss for the year ending 30 March, although total revenue saw a decline.
- Revenue for the fashion retailer fell by £75.5 million, equating to an 8.9% drop, to a total of £769.2 million.
- Retail sales decreased by 11.5% amid ongoing cost-of-living challenges and a series of store closures across the UK.
- Despite financial hurdles, New Look maintained its position as a leading womenswear retailer within the 18 to 44 age demographic.
- The company has expressed cautious optimism for the next fiscal year while navigating regulatory and market challenges.
New Look has experienced a significant financial shift, demonstrating resilience by narrowing its pre-tax loss to £21.7 million from the previous year’s £87.8 million. However, total revenue witnessed an 8.9% decline, falling by £75.5 million to £769.2 million over a 53-week period. This decline was predominantly influenced by store closures and the challenging trading environment.
Retail sales experienced a larger decrease of 11.5%, dropping to £555.1 million, influenced by the pervasive cost-of-living issues and strategic store closures. In an effort to stabilise margins, the retailer focused on acquiring a higher proportion of broad appeal stock with longevity, particularly in response to unpredictable weather patterns during spring and summer.
Despite these setbacks, New Look has upheld its stature as the second largest womenswear retailer by market share among consumers aged 18 to 44, based on data from Kantar. While ecommerce sales remained steady at £217.5 million, revenues from third-party platforms faced a 7.6% reduction, down to £44.7 million.
A notable change in the physical retail landscape was marked by the opening of five new stores coupled with the closure of 35, culminating in a total of 385 stores operational in the UK and Ireland by the year’s end. This was a strategic move aligned with the completion of a company voluntary arrangement (CVA) initiated in 2020.
Operating profit saw a reversal, increasing by £75.1 million to achieve a £22 million profit, compared to a £53.1 million loss in the prior year. The retailer successfully refinanced a £100 million term loan by negotiating a new credit facility with Wells Fargo and Blazehill in September 2023, indicating financial restructuring efforts.
In addressing future perspectives, New Look remains cautiously optimistic about the upcoming fiscal year (FY25). The company anticipates some relief from inflationary pressures and improvements in economic conditions, though it acknowledges the impact of high regulatory costs, including increases in the national living wage and national minimum wage. Strategic investments are planned to enhance its omnichannel model, encompassing store renovations, loyalty programmes, and advancements in data and AI tools.
New Look navigates challenging economic conditions with strategic financial adjustments and a focus on omnichannel growth.
