New Look’s finances have taken a sudden turn, with the fashion retailer swinging to a half-year loss in its half-year report.
The retailer, owned by South African investment firm Brait, recorded an underlying operating loss of £10.4 million in the six months to September 23, compared to the £59.3 million profit recorded in the same period last year.
New Look’s like-for-like sales in the UK also slumped 8.4 per cent in the first half of this year, while total revenue dropped 4.5 per cent to £686 million.
In addition, the retailer continues to deal with £1.2 billion worth of debt and is reportedly in talks with lenders about restructuring.
However, New Look said it has an “adequate liquidity and cash position” with £242.5 million in cash, liquidity and operating facilities available.
The news comes amid a rising trend of British fashion retailers being stung by rising costs deriving from a fall in the value of the pound since the Brexit vote, inflation as well as falling consumer confidence.
Executive chairman Alistair McGeorge – who was parachuted back into New Look after the sudden departure of chief executive Anders Kristiansen in September – said the results reflected a “challenging retail environment on the UK high street”.
“The immediate focus in this period of transition will be to deliver stability and get the business back to basics by reconnecting with the New Look customer and recovering our broad appeal,” McGeorge said.
“Whilst we’re not anticipating a reversal in fortunes overnight, I am confident we will implement the necessary changes to get the company back on track.”
Non-executive director John Gnodde said the second half of the New Look’s fiscal year was “likely to remain challenging” but maintained that the company had an “adequate liquidity position”.
“I am confident that we have a fundamentally good brand with a strong team in place to deliver a significant improvement in our performance,” he said.
Since the start of the second half, New Look made 390 redundant after a consultation period with its 19,000 staff members.