New Look's full-year sales rise as it mulls sale of French Mim business
High street fashion retailer New Look has seen its full-year group sales rise by 3% to Â£1,528.8 million as it continues to pursue international and multichannel growth. However, the group has revealed that it may sell its French arm Mim after the business pushed the group into a full-year pre-tax loss.
In the year to 29 March 2014, group like-for-like sales edged up 2% with New Look brand like-for-likes rising by 2.7%. In the UK sales rose by 3% on a like-for-like basis compared to drop of 0.5% in the prior year.
Gross profit was £805.9 million compared to £785.1 million in the previous year while underlying operating profit grew by 11.3% to £128.5 million. Group adjusted EBITDA also rose, climbing by 5.8% to £200.2 million
However, New Look made a statutory loss before tax of £55 million compared to a pre-tax profit of £3.1 million in 2013 when an impairment charge of £64.2 million to write down the value of Mim's net assets was included.
Online sales surged by 63.9% with own website sales rising by 42.3%. Third party online sales climbed to £22 million from £1.6 million in 2013 as the group built on the success of its partnership with ASOS to sign agreements with Koovs, La Moda, Smart Guy, The Iconic, Zalando, and Zalora.
During the year, New Look opened its first ten stores in China and plans to launch a further ten outlets in the country in 2015. It also bought back its Polish franchise which included ten stores.
New Look chief executive Anders Kristiansen said: “I am pleased with what the new team has achieved in its first year. We have delivered a good result, growing both sales and EBITDA and maintaining our market share by value at 5.8%.
“It has been a year of real strategic development and I am delighted with the progress we have made in both our international strategy and multichannel offer. Our decision to build scale in four key geographies namely: China, Poland, Russia and Germany, is, we believe, key to New Look’s future continued success. In the year we opened our first five stores in China and bought back our Polish Franchise providing us a solid base from which to grow.
“Our strategy is to focus on building and developing the core New Look brand in the UK, internationally and online and on that basis we have taken the decision to explore strategic options for Mim, including potential divestment.”
New Look said it had made a number of improvements to its website and mobile app during the year. It revealed that more than one in four e-commerce customers now use its click-and-collect service and that its website receives 2.7 million visits per week.
Looking ahead the group said it expects the retail environment to become “ever more competitive”. Kristiansen added: “We’ve made great progress against our strategic objectives during FY14, and delivered on what we set out to achieve in the year. While remaining vigilant on costs, we will continue to invest in identified growth areas. I am confident that New Look is going into the new financial year in a good position to meet the challenges that lie ahead.”
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