New Look’s revenues and profits took a hit in 2016, as the high street fashion sector continues to endure a slump and shows no sign of letting up anytime soon.
Revenues at the fashion retailer dipped by 2.4 per cent to £1.45 billion in the full year to March 24, down from £1.49 billion the year prior.
While New Look Brand like-for-like sales went down by 6.6 per cent and UK like-for-like sales slid by 6.8 per cent, the retailer’s overall revenue dip was slowed down by a 14.3 per cent growth in own website sales along with 30.9 per cent growth in third party ecommerce sales.
Meanwhile, New Look’s adjusted EBITDA dropped by 31.8 per cent to £155 million in the recent fiscal year, which it attributed to sales performance and investment in strategic initiatives.
On the other hand, underlying operating profit plummeted by 44.1 per cent to £97.6 million, down from £174.7 million the year prior.
Despite the challenging market conditions from across its UK and European markets, New Look insisted it was making good progress across its strategic initiatives, with growth in multichannel services and dominance in the under-35 womenwear retail market.
The high street chain also expanded its estate in China to 110 stores, up from 85 stores year-on-year, and recorded “positive” like-for-like sales performance.
“The retail environment is now more competitive than ever. We have seen a growing shift in customer mindset during the year to a ‘buy now, wear now’ mentality, which challenges us to be even faster in identifying and responding to trends, buying with more conviction and becoming ever more agile,” New Look chief executive Anders Kristiansen said.
“We’ve responded by improving our buying processes, working to achieve an even faster supply chain and strengthening our buying and design teams to make sure we deliver a stronger product proposition.
“Our industry continues to evolve; immediacy and convenience matter more than ever before in the search for great fashion.
“Our customers need to be absolutely clear what we stand for and to feel inspired by what we do. We are renewing our determination to offer even more compelling lead-in entry prices across our ranges. By being faster on the latest trends and acting with added conviction, we will reduce reliance on promotions and discounting.”
New Look expected the challenging retail environment in the UK to continue well into the current financial year and have set “plans accordingly”.
“We remain resolutely committed to delivering on our strategy for the benefit of all our customers and stakeholders and are confident we have the right strategy in place to do so,” Kristiansen said.