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New Look H1 profits improve but revenues drop 4.2 percent

By Prachi Singh

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Report

New Look Retail Group Limited for the 26 weeks to September 22, 2018, reported improvement in profitability, while revenue declined 4.2 percent to 656.9 million pounds (859 million dollars). New Look brand like-for-like sales were down 3.7 percent compared to 8.6 percent drop in the first half of last year. The company added that adjusted EBITDA increased to 49.8 million pounds (65 million dollars) supported by cost savings, while adjusted EBITDA excluding China rose to 57.9 million pounds (75.7 million dollars). Underlying operating profit was 22.2 million pounds (29 million dollars) against underlying operating loss of 10.4 million pounds (13.6 million dollars) last year.

Commenting on the company’s first half trading, Alistair McGeorge, New Look’s Executive Chairman, said in a statement: “The significant cost savings, which have been implemented are delivering improved profitability and we continue to see better performance in our new womenswear ranges. The decision to exit our stores in China was a difficult one but was right for the business to ensure we are well positioned for sustainable and profitable growth. We continue to work hard to accelerate our progress, but we are facing into significant headwinds and uncertainties, including Brexit. Clearly the wider retail environment remains challenging and we are not expecting that to change anytime soon.”

As a part of its turnaround plan, New Look managed to improve sales and profitability in key womenswear categories with challenges remaining in footwear and accessories. Women’s clothing in UK stores, the company said, outperformed market by 5.6 percentage points according to BRC with improvement in overall UK market share. E-commerce profitability continued to increase substantially and click and collect sales mix continued to drive footfall into stores, increasing to 41 percent.

On October 18, 2018, the company announced its decision to exit its retail business in China by end December 2018 since the business had not achieved the necessary sales and profitability to support significant future investment required, while New Look added that strategic review of other international markets continues.

Picture:Facebook/New Look

New Look