New Look’s French arm goes into liquidation

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New Look France
// New Look France goes into liquidation after failing to find a credible buyer
// Paris trade court made the decision on June 26 in response to administrators’ request
// New Look France first filed for receivership in March
// New Look has been exiting international markets as part of company-wide restructure

New Look’s French operations has been put into liquidation after its search for a credible buyer failed.

It comes after a Paris trade court made the decision on June 26 in response to a request from administrators for the the fashion retailer’s French arm.

New Look first started the process to seek new owners for its stores in France as part of a wider major turnaround strategy that includes steps to leave international markets.

The retailer had appointed Paul-Henri Cécillon, chief executive of corporate turnaround specialist Phinancia, to assess the state of the business of New Look France last November.

As part of the liquidation, most of the retailer’s 30 stores will shut. Some have already closed.

New Look has had a French presence since 2006 and employs just under 500 people.

New Look’s financial performance in France has declined in the last three years, and much more so amid the “yellow vest” demonstrations on various weekends between November and January.

The retailer’s French sales fell by 13.6 per cent for the 2017-18 financial year, down to €57.9 million (£49.7 million) compared to €67 million the year prior.

The news comes as New Look pushes on with its wide-reaching CVA scheme, which includes a restructure and hundreds of job cuts from shutting down a target of 100 stores.

It has also completely withdrawing from the Chinese and Belgian markets. Its Polish arm has also filed for bankruptcy.

However, New Look’s turnaround is starting to bear some fruit, with the retailer reporting 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.

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