Fashion retailer New Look is to enter the Chinese market in the coming year as it looks to refinance its £1 billion debt, it is understood.
Following a failed attempt to enter the country last year after it was unable to secure a partner, the retailer is planning on opening its first store in early spring 2014, the Financial Times (FT) reported.
Eyeing retail hubs Beijing and Shanghai, the retailer is said to be planning on putting a team on the ground in the country with plans to open between five and 10 stores ahead of a further roll-out.
Last December, New Look appointed Anders Kristiansen as its new chief, highlighting his multinational experience as Vice-CEO of China’s largest fashion retailer Bestseller and Kristriansen told the FT that there was high demand for the brand in the burgeoning Chinese retail sector.
Expansion is a key focus of New Look’s ongoing recovery plans as its seeks to refinance its £1.1 billion net debt which includes £750 million of payment in kind notes.
Kristriansen told the FT that he was interested in taking the retailer “to the next level”, and added: “ Internationally there are huge opportunities?.?.?.?I would not have joined if I thought the refinancing was a worry.”
An increasing number of retailers are setting their sights on expansion in the east as the European market continues to struggle economically, though Retail Analyst at The Economist Intelligence Unit Jon Copestake warned that New Look may struggle in the country.
“With European markets flagging, it is unsurprising that New Look are looking east for further opportunities, especially given the strong background in China that their new Chief Executive brings.
“A possible slowdown of growth in China would be unlikely to affect a mid-market player such as New Look, which can provide an alternative western brand to the proliferation of luxury chains.
“A cautious initial investment is a canny way to test the market, although failing to partner with a local player could present some regulatory or planning problems.
“There could also be some risk attached to the brand itself. New Look may not be global enough to appeal to Chinese consumers, and may fail to tap into the aspirational buying that is fuelling retail growth in China.”