New Look enters FY20 with financial and operational stability
New Look progress in returning to proven broad appeal product and value-led pricing. Improvements in YoY profitability across key Womenswear categories (e.g. dresses, separates and ‘going out’) with some remaining challenges being addressed, particularly footwear and accessories
The brand maintained number 2 position for overall Womenswear market share in 18 to 44 age and outperformed the UK market for core women’s clothing in stores by 4.5 percent. Cohesive multichannel model and a fundamentally realigned supply chain have given impetuous to sales. New Look launched ‘order in store, collect in store’ and photo search functionality, further enhancing customer experience. Sales from mobile app now account for 10% of e-commerce sales.
International strategic review complete resulting in closure of China and appointment of administrators in Belgium, France and Poland. The decisions were not taken lightly, and the review has been a long and considered process.
The e-commerce strategy focused on profitable sales improving e-commerce underlying operating profit by 78.2% to £21.2m (FY18: £11.9m). Click and Collect and e-commerce returns options continue to drive footfall into stores. Alistair McGeorge, Executive Chairman said that the company has achieved a remarkable amount over the past year, delivering on their aim to achieve financial and operational stability. “Firstly, we have made progress in recovering the broad appeal of our product and have delivered year-on-year improvements in profitability across key areas. Our e-commerce and store businesses are now working together better than ever, and we are starting to see the benefits of improved speed to market.”
Cost savings in excess of £80m, overachieving plans, with further opportunities already identified for FY20. “We have exceeded our cost saving plans, addressed our previously over-rented UK store estate, completed the review of our international businesses, and delivered further operational efficiencies across the business,” shared Alistair.
The company successfully completed its financial restructuring, which has secured the company’s future and long-term profitability by materially deleveraging its balance sheet and providing it with the financial flexibility to better attack the future. “Whilst New Look enters the new financial year in a fundamentally healthier and stronger position, in many respects today marks the starting line. We have more work to do to enhance trading and deliver further operational improvements as we continue our turnaround plans,” stated Alistair. He continued, “We expect the retail environment to remain as challenging as ever in the year ahead, with continued Brexit uncertainty and unseasonable weather impacting current trading. However, we will continue to focus on what is in our control by further enhancing profitability through our fantastic product, building brand equity and grasping new market opportunities.”Europe News Retail