New Look losses widen but underlying performance improves

Full-year losses at New Look widened amid a "challenging" environment, but the struggling fashion retailer hailed a return to underlying profitability on Tuesday.

In the year to 30 March 2019, statutory pre-tax losses widened to £522.2m from £190.2m the year before, mostly on the back of a £423.3m goodwill and brand impairment charge related to its restructuring.

Revenue slipped 3.8% to £1.24bn, in line with expectations, as the group focused on driving more profitable sales and fewer stores.

On a brighter note, core underlying operating profit came in at £33.2m compared to a loss of £35.7m in 2018, while core adjusted earnings before interest, taxes, depreciation and amortisation rose to £80.2m from £18m.

Core like-for-like sales declined 1.6% during the year, which was an improvement on the 11.6% drop seen in 2018.

New Look said it has reduced debt from around £1.35bn to £350m and achieved cost savings of more £80m, ahead of plans, with further opportunities already identified for 2020.

Executive chairman Alistair McGeorge said: "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.

"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."