New Look sales take hit in "extremely challenging" market
New Look's like-for-like group sales were down 4.6% in the 13 weeks ending 24 December 2016 as the young fashion retailer claims UK market conditions remain "extremely challening".
For the third quarter of the group's financial year 2017 (FY17), it posted total revenues of £422.6m, which were marginally up on the previous year by 0.8%. Underlying operating profit for the quarter was £52.2m, down 26.1%. For the year-to-date group revenues were £1,140.7m (down 2.9%) and underlying operating profit was £111.5m, down 32.6%.
CEO Anders Kristiansen said the UK market continued to be "extremely challening with reduced footfall and a highly promotional environment on the high street, resulting in a disappointing like-for-like sales performance."
The ability for the group to maintain a level performance for total group revenue was down to "good performances outside the UK, online and in menswear, proving that our strategy of diversification is the right one for our business," he added.
Despite the UK challenges the group continues to make progress against its strategic goals. It delivered positive like-for-like sales in China and has just surpassed the 100-stores mark in the country. It continues to open menswear-only stores across the group, having opened four during the quarter, and now has 19.
Multichannel sales remained strong and it reported record online sales during the Black Friday promotional period at the end of November. The business also claims to have had a positive response to its new beauty launch.
"Globally, fast fashion is getting faster. The consumer mindset is shifting, driven by social media, to a ‘buy now, wear now’ mentality. We have responded accordingly by improving our buying processes, working to achieve a faster supply chain, tightening our stock control and strengthening our Buying and Design teams to deliver a stronger product proposition," Kristiansen said.
“We are clear on the actions needed to capture customer spend, but these will take time to implement. While we expect 2017 to be tough and are setting our plans accordingly, we strongly believe in our ability to continue to execute our strategy," he added.