New Look profitability improves but sales still declining
The retailer has implemented £70 million worth of annual cost-saving measures.
Embattled fashion retailer New Look has reported improved profit as it continues a radical turnaround plan, despite an ongoing decline in sales.
The company posted an underlying operating profit of £22.2 million for the first half, compared to a loss of £10.4 million in the same period last year.
But revenue declined by 4.2% to £656.9 million. Like-for-like sales under the New Look brand dropped by 3.7%, a slower rate than last year’s 8.6% drop.
The high street mainstay said the slide in sales was in line with its plan to improve profitability with more full-price sales.
New Look is in the midst of a major cost-cutting plan, part of which saw it put forward plans to close 60 stores in March.
Last month it also announced its decision to exit its retail business in China, while other international operations are under review.
Annualised cost savings of £70 million have now been achieved, with another £8 million to be added.
As part of the turnaround, New Look has also improved its UK market share and ramped up online operations, increasing click and collect sales by 41% in the first half.
Executive chairman Alistair McGeorge warned that conditions on the high street remain challenging.
“We continue to work hard to accelerate our progress, but we are facing into significant headwinds and uncertainties, including Brexit,” he said.
“Clearly the wider retail environment remains challenging and we are not expecting that to change anytime soon. However, we are on the right track and continue to drive further efficiencies across the business.
“As we look to the second half, our focus will be to continue to improve our financial and operational stability and further capitalise on our brand strength to position us well for the future.”