Fashion retailer New Look has seen EBITDA jump 29 per cent in its full year despite a fall in UK like-for-like (LFL) sales as it eyes overseas expansion, figures released today reveal.
In the 53 weeks to March 30th 2013, pre-tax profit reached £3.1 million, up from a £54.5 million loss over the same period last year while underlying operating profit soared 84.2 per cent to £115.5 million thanks to an ongoing turnaround plan.
Successful refinancing across the business in a bid to reduce margins and improve cost savings has seen net debt fall to £1.1 billion over the year and revenue growth is “delivering real results” the retailer said.
Chairman of New Look Alistair McGeorge said: “I am delighted to report that our three-point turnaround plan of cost savings, margin improvement and revenue growth enabled us to deliver strong results and continue to re-invest in our business.
“The strength of our financial turnaround has also enabled us to address our capital structure, with the successful refinancing of our debt, extending maturities to 2018.
“This gives the business a five year runway for Anders and his team to continue to improve performance, drive forward our international expansion and develop further our online and store development.
“Our long term goal remains the same: to de-lever the business through profit growth and strong cashflow.”
However, group LFLs dipped 0.7 per cent while the UK also saw a decline as LFLs fell 0.5 per cent, though New Look remains committed to its store refurbishment strategy.
Some 145 of the retailer’s stores have now been refurbished in the new “concept” format while remaining stores are set for refurbishment over the next three years while New Look also noted “positive momentum in our international business”, with European LFLs up 3.2 per cent.
Over the year, the retailer completed the appointment of a management team for its Chinese operations and is now working to open its first store in China in March 2014.
New Look also saw success within its multichannel strategy as online sales rocketed 50 per cent while newlook.com reported 2.5 million visits per week.
All online orders are now fulfilled within its Lymedale distribution centre while New Look also rolled out its Click & Collect and Order-In-Store offerings to strengthen its domestic operations ahead of further growth.
Despite acknowledging the challenging economic climate, New Look remains confident about the year ahead and CEO Anders Kristiansen pointed to further expansion in the coming months.
“I applaud the achievements of the past financial year - not only the containment of costs, but also an impressive improvement in underlying profitability,” Kristiansen said.
“I believe New Look is now well positioned to explore exciting development opportunities of new markets in Eastern Europe and south-east Asia – specifically Russia and China.
“As our future expansion strategy is for depth rather than breadth, we aim to concentrate on markets where we can develop a significant presence.
“I am delighted to have joined New Look at such an exciting time and am looking forward to the future.”