New Look posts loss after 'very difficult' year, slashes prices

Struggling fashion retailer New Look posted a loss on Tuesday, with sales down 7.3% following a "very difficult year" as the company announced it was slashing its prices but said it was beginning to see "green shoots".

In the year to 24 March, the group made an underlying operating loss of £74.3m versus a profit of £97.6m the year before. Of that, £34.2m were one-off costs, including stock clearance incurred in FY18 to enable a "clean trading position" for FY19.

Revenue slumped to £1.35bn. New Look brand like-for-like sales declined 11.4%, while UK LFL sales were 11.7% lower and own website sales fell 19.2%. The only bright spot was third party e-commerce sales, which rose 15.5% in the year.

New Look, which entered into a company voluntary arrangement in March, said it would be cutting its prices to offer "significantly better value", with 80% of its products retailing under £20.

As far as current trading is concerned, the group said its liquidity position continues to improve and early first-quarter trading indicates improvements in specific womenswear areas where initial attention has been focused.

Executive chairman Alistair McGeorge said: "Last year was undoubtedly very difficult for New Look, with a well-documented combination of external and self-inflicted issues impacting our performance.

"Since November, we have focused on making the necessary changes to get the company back on track and reconnect with our customers. Our turnaround plan is now well underway, and we have already made substantial operational improvements to help stabilise the business, reduce our fixed cost base and put us in a better position to drive future full price sales.

"We have started the new financial year with a much cleaner stock position and are now seeing green shoots emerge.

"We still have more work to do to restore long-term profitability, but I am confident we are now better placed to achieve this than we were when I returned to the business over six months ago. Trading conditions will remain tough in the year ahead, but further operational efficiencies and a resolute focus on our core strengths and heartland customer will help to ensure we remain on the right track."