Aug 3, 2021
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New Look recovery underway in Q1 after tough year

Aug 3, 2021

Value fashion specialist New Look issued a trading update and its annual results on Tuesday and said it had made a “solid start to FY22 trading following store reopenings after [a] resilient FY21 performance”.

New Look

In the first 13 weeks of FY22 to June 26, total revenue was up by 181.7% versus the same quarter in FY21 at £194.4 million. Its own e-commerce sales were up by 3.8% versus Q1 last year, and by 43.3% versus two years ago.

Adjusted EBITDA was £15 million versus a loss of £16 million Q1 last time.

It saw an improvement in conversion and reduced markdown activity that “underline strong product performance as customers continue to re-engage with the brand across all channels”. 

Meanwhile, the year to March 27 saw it achieving the number one position for overall womenswear market share in the 18 to 44 age range, according to Kantar Worldpanel.

But it wasn’t all good news as it had a tough year, punctuated by the need for its Company Voluntary Arrangement (CVA) and financial recapitalisation. That said, this completed in November 2020 and provides “firm foundations for future growth”.

It’s clear why the move was needed as revenue fell to £542.2 million from £912.8 million, reflecting Covid-19-related store closures. But it saw “strong” online sales growth of 69%, with over 225 million visits, serving customers in 66 countries. 

Adjusted EBITDA plummeted to £4.3 million from £132.2 million but statutory profit before tax rose to £108 million from a loss before tax of £430.7 million, “primarily reflecting intangible impairment reversals on future cash flows from stores following [the] CVA”.

CEO Nigel Oddy said: “We have been delighted to welcome our customers back to our stores since reopening from April 2021, which, as expected, has driven strong sales growth as lower footfall has been offset by improved sales conversion rates.

“We are focused on driving profitability and are pleased by the full-price sales we are now generating in-store and online as customers react positively to our spring/summer ranges. When the weather became warmer, seasonal product sold strongly, particularly dresses and sandals. It was also especially pleasing to maintain momentum in e-commerce, with year-on-year sales growth since our stores reopened, despite the strong prior year comparator. 

“Customers are coming back to our brand and when they do, they clearly like what we have to offer, especially when they shop across both stores and online.

“Last year’s results are clearly not reflective of the health of the business as it stands here today. We are in a fundamentally stronger position following the successful recapitalisation and CVA.”

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