In the latest financial year, New Look saw a significant improvement in pre-tax losses despite a drop in revenue.
- The pre-tax loss narrowed to £21.7m from £87.8m in the previous year, showing financial stabilisation.
- Revenue fell 8.9% to £769.2m, largely due to store closures and challenging market conditions.
- Retail sales decreased by 11.5% as cost-of-living pressures affected consumer spending.
- Despite setbacks, New Look’s operating profit turned around to a £22m profit, marking a notable recovery.
New Look has shown significant strides in narrowing its financial losses in the year leading to 30 March, posting a reduced pre-tax loss of £21.7 million, a notable improvement from the previous year’s loss of £87.8 million. This reduction illustrates a marked improvement in financial stability, despite the retailer experiencing a decline in revenue by 8.9%, down to £769.2 million. The primary reasons cited for this downturn include the closure of numerous stores and the unfavourable trading climate impacting the fashion retail industry.
The year saw New Look grappling with an 11.5% decrease in retail sales. The company attributed this to ongoing cost-of-living challenges faced by consumers, which curtailed spending, alongside strategic store closures aimed at restructuring. Interestingly, New Look undertook measures to navigate the fluctuating market dynamics by investing in ‘broad appeal stock with longevity’. This strategy was instrumental in maintaining their margins amid unseasonable weather patterns affecting the spring and summer sales.
Ecommerce performance remained relatively unchanged at £217.5 million, demonstrating resilience in the face of market pressures. However, revenue from third-party platforms experienced a dip, decreasing by 7.6% year-on-year to £44.7 million. Despite these setbacks, New Look successfully increased its operating profit by an impressive £75.1 million, turning a previous loss of £53.1 million into a £22 million profit, showcasing a robust financial recovery.
On the operational front, New Look proceeded with the opening of five new stores across the UK, yet closed thirty-five, ending the year with a total of 385 stores, a noticeable reduction from the previous year’s 414 locations. This rationalisation was predominantly a consequence of the company’s voluntary arrangement initiated in 2020, which reached completion in September 2023. The company maintained a cautiously optimistic outlook for FY25, anticipating a reduction in inflationary pressures and a potential uptick in economic conditions.
In their future strategy, New Look expressed intentions to continue safeguarding customer spending power by preserving key entry price points and investing thoughtfully to stimulate volume growth across its omnichannel model. Planned investments in store refurbishments, loyalty schemes, as well as data and AI tools underscore the retailer’s commitment to adapting to evolving consumer needs and enhancing operational efficiencies.
New Look’s financial recovery signals positive momentum despite the challenges, with strategic plans set to support ongoing growth.
