UK fashion retailer New Look, owned by private equity groups Apax and Permira and founder Tom Singh, announced on Tuesday that it has returned to profit after making a loss in 2012.
The company, which operates over 1,100 stores, declared a full year pre-tax profit of GBP3.1m, compared to a loss of GBP54.5m last year. Its sales have risen by 2.5% to GBP1.48bn, with online transactions increasing by 50.1% to almost GBP95m in the 12 months to March 2013, following improvements made to its website. New Look’s online store has been made easier to use, with an extended product range available, which includes brands and garments offered as online ‘exclusives’.
Total revenues rose by GBP36.5m to GBP1.48bn, however the company expects expect the economic outlook to remain challenging, with consumer confidence in the UK showing few signs of recovery. Factors such as poor weather conditions have also disrupted consumer spending patterns.
New Look said it has executed three-point turnaround plan of cost savings, margin improvement and revenue growth, which has resulted in a financial turnaround. This has enabled the company to continue to re-invest in its business and address its capital structure with the successful refinancing of its GBP1.1bn debt, extending maturities to 2018.
CEO Anders Kristiansen said: “I believe New Look is now well positioned to explore exciting development opportunities of new markets in Eastern Europe and south-east Asia – specifically Russia and China. As our future expansion strategy is for depth rather than breadth, we aim to concentrate on markets where we can develop a significant presence”.
In addition, New Look said that in the last year it has closed 42 underperforming stores and refurbished almost a quarter of its existing stores and now has 589 outlets in the UK. It has also increased its overseas stores from 499 to 549 and plans to open the first New Look outlet in China next March.