Fast fashion retailer New Look is showing signs of a turnaround in performance as the business, which is currently trading under a CVA, achieved a 19% increase in underlying profits in Q1 to £14.4m.
Adjusted EBITDA was stabilised and up 1.5% to £27.6m, while revenue was down -2.1% at £329.4m and UK like-for-likes were down -4% (compared to a -8.2% drop in the same quarter last year).
Executive chairman Alistair McGeorge said the business had made good progress in delivering cost savings and stabilising profits, and had seen “encouraging green shoots” in womenswear.
“We ended the quarter with a clean stock position and have seen improved sales performance in the areas we have addressed so far in our product review. We are confident there is more to come as we focus on our remaining product ranges.
“As we recover the broad appeal of our product, we were pleased to improve our market performance and deliver better customer conversion rates. This shows the strength and resilience of our brand, and the positive impact of the changes we are making,” McGeorge said.
The business said its “cohesive multichannel” model was working with improvements in customer conversation rates in-store and online with e-commerce profitability up “substantially”. Its Click & Collect sales mix increased to 40% (Q1 FY18: 27%), which drove footfall into stores.
New Look secured support from 98% of its creditors for its CVA (Company Voluntary Arrangement) in March of this year. During the course of the three-year process the retailer expects to close around 60 of its 600 stores.