New Look menswear punt pays off as profits increase 17pc
Fashion chain New Look has profited from a punt on menswear and increased investment in its Chinese business, generating a 17pc rise in pre-tax profits over the last financial year.
The company drove up revenues by 5.4pc to £1.49bn from £1.14bn the previous year, with profits of £59.1m.
Menswear has been key to the brand's growth in the UK, New Look chief executive Anders Kristiansen revealed. "We only had a 3pc mix of menswear before but the 25pc of the wider apparel market is men's," he said.
"Us guys are becoming more and more fashionable," he added. "They are spending more money on clothes and we want to tap into that."
New Look now has six standalone menswear stores and all of them have "exceeded expectations", he said. The brand is now experimenting with much larger sites for men, trialling two 4,000 sq ft stores this year.
"Guys were always put upstairs or downstairs and they had to go through kidswear or lingerie to check out," Mr Kristiansen said. "We are giving them their own space. Equal rights for men!"
According to the Danish boss, New Look now holds a similar market share in menswear as Zara Men. The company already boasts 41pc of UK women as customers.
The company has also managed to crack the "multichannel" offering, which has become the Holy Grail for fashion retailers. New Look's customers frequently cross over from the online store to become bricks and mortar customers, and vice versa, it said.
"People who shop in multiple channels are three times more valuable than people who shop in one," Mr Kristiansen claimed, but refused to reveal how New Look has persuaded customers to move from one channel to the other: "We'd like to keep that a secret."
New Look has experienced positive growth in China, where the recent economic woes have sent savvy shoppers into the arms of more affordable fashion brands. It has added 66 new stores in China over the past year, taking the total to 85.
Like-for-like sales in China rose almost 9pc last year.
Mr Kristiansen said that Poland was among the weaker territories for the brand but that elsewhere in Europe, such as in France, the company was expanding rapidly.
The company experiments with new markets by selling its clothes through third parties, such as Amazon and Asos. It will open its first store in Germany at the end of this year after discovering demand through Zalando, the European e-commerce site.
By the end of this year, New Look will have 442 stores around the world.
These results were published in the wake of the collapse of high street rival BHS, which has now fallen into liquidation.
Mr Kristiansen claimed that the retailer, which was once owned by Top Shop boss Sir Philip Green, had failed to keep up with new trends.
"Without an incredibly fast supply chain, you will miss out," he said. "Trends move faster than ever before because of social media. Something that's big in South Korea today can be in the UK tomorrow. You have to land that trend before it disappears."
New Look can turn around a new product range within three to four weeks, he said, compared to the traditional industry turnaround time of up to nine months.
New Look was bought by South Africa’s Brait last year and Mr Kristiansen said that he found the new owners "very supportive". Inward investment into New Look has risen from £60m before the sale to £100m last year.
Mr Kristiansen said that the new owners were keen to take the brand into new markets. "They are the ones asking why we're not in the US yet," he said. "They are keen for us to expand."
When asked if the US was on the hitlist, he said he was reluctant to expand there now but would in a few years. "The US has to be on everyone's radar," he said. "It's a place we want to be."