New Look books £33m operating profit as turnaround bears fruit

New Look
// New Look posts full-year underlying operating profit of £33.2m, compared to a loss of £35.7m last year
// Like-for-likes down 1.6%
// Full-year revenue declined 3.8% to £1.23bn
// Core adjusted EBITDA increased to £80.2m compared to £18m the previous year

New Look has made a full-year profit of almost £33 million thanks to a turnaround programme that included a raft of store closures and job cuts via a CVA.

For the year ending March 30, the fashion retailer reported an underlying operating profit of £33.2 million compared to a loss of £35.7 million the year before.

New Look added that core adjusted EBITDA increased to £80.2 million, compared to £18m the year prior, demonstrating strength in key focus areas following its restructuring scheme.

However, its statutory loss before tax widened to £522.2 million compared to a loss of £190.2 million the year prior, principally driven by £423.3 million in goodwill and brand impairment charge (non-cash) relating to the restructuring.

In addition, the retailer’s full-year revenues declined 3.8 per cent year-on-year to £1.23 billion while like-for-likes dipped 1.6 per cent.

On the other hand, its ecommerce arm saw underlying operating profit skyrocket by 78.2 per cent to £21.2 million.

The past year saw New Look undergo a major restructure that included a raft of store closures and job cuts through a CVA, as well as ending operations in overseas markets such as China, France and Belgium.

New Look said this helped lead to year-on-year improvements in profitability across key areas.

“Our ecommerce and store businesses are now working together better than ever, and we are starting to see the benefits of improved speed to market,” New Look executive chairman Alistair McGeorge said.

He added: “We have exceeded our cost saving plans, addressed our previously over-rented UK store estate, completed the review of our international businesses, and delivered further operational efficiencies across the business.”

“We have successfully completed our financial restructuring, which has secured the company’s future and long-term profitability by materially deleveraging our balance sheet and providing us with the financial flexibility to better attack our future.”

New Look said the past year has been “challenging” for colleagues, investors, suppliers, creditors and other stakeholders.

“We expect the retail environment to remain as challenging as ever in the year ahead, with continued Brexit uncertainty and unseasonable weather impacting current trading,” McGeorge said.

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