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New Look is a leading UK clothing retailer in the value segment, selling stylish clothing, accessories and footwear at low prices, mainly to women aged between 16 and 30. Strong performance over the holiday period in 2009 allowed New Look to leapfrog Next to become the #2 in UK women's wear behind Marks & Spencer with just over 6% share. It held that position for several years before being overtaken itself by Primark, another specialist in the under-35 age group and the value segment. In 2015, the business was acquired by Brait, the investment company of South African financier Christoph Wiese. However it has struggled since then with changing consumer tastes within the fiercely competitive bricks and mortar fashion market. In the year to 2018, same-store sales fell by 12%, resulting in a sizeable pretax loss.
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New Look Retail Group
Dorset DT3 5HJ
Tel: 44 (0)1305 765 000
New Look Retail Group
45 Mortimer Street
London W1W 8HJ
Tel: 44 (0)20 3219 7281
New Look claims to be the UK's biggest retailer of clothing and accessories by value to women under 25, the #1 in women's jeans and dresses by volume, and the #2 retailer overall by value for women's apparel (behind Marks & Spencer) with 6.3% share by early 2016.
The chain offers a number of inhouse brands including AX and plus-size Inspire, and has strengthened its profile with a number of endorsement or design partnerships with selected youth market celebrities including singer Lily Allen and TV presenters Kelly Brook and Fearne Cotton. An exclusive line of clothing by designer Giles Deacon, modeled by Agyness Deyn, gained considerable publicity during 2007. Deacon continues to produce occasional collections for the chain. New Look took its first steps into men's clothing in 2004 - Deacon was responsible for selected apparel in this segment also - and the children's sector from 2005. The latter range is produced in partnership with Adams. Men's and kids' clothing is sold only in selected, mainly larger stores and accounts for only a small proportion of sales - less than 5% in 2011. The group enjoyed a big promotional push in 2011 as the hosts of fashion-based reality show New Look Style The Nation (on terrestrial station Channel 4) which set out to discover budding new stylists.
The group had almost 600 stores in the UK by the end of 2017. It has gradually disposed of smaller regional stores in favour of larger city and out-of-town outlets. There is also a growing international footprint, with almost 85 outlets in the Irish Republic, France, Belgium and Poland, as well as more than 80 franchised stores in the Middle East and Europe. New Look's first store in China opened in 2014, and another 125 had followed by mid 2017. The company also operates its own ecommerce business and retails via several third party websites, including Asos, Koovs and Zalando, with online sales now reaching 120 countries worldwide. However the steady decline in performance since 2016 has prompted a pull back since the beginning of 2018. It announced plans to close 60 UK stores, including two flagship stores in London, and is negotiating with landlords to reduce rent at almost another 400.
Until recently, the group also owned the Mim fashion chain in France and Belgium, with almost 330 outlets. This was less fashion-oriented than the main New Look brand, offering a more conservative, basic range. In Spring 2014, the group said it was exploring strategic options for that business. It eventually agreed to sell the chain to Hong Kong group Main Asia for an undisclosed sum.
The group was until recently controlled by private equity funds Apax and Permira who together owned a little over 55% of the group's shares. There had been repeated talk of an IPO since the late 2000s, but those plans were repeatedly postponed. In May 2015, South African investor Christoph Wiese agreed to acquire New Look for an implied value of £865m. The deal completed the following month. His investment vehicle Brait ended up with an 89% shareholding. Management share the remaining 11%. Brait's other UK investments include a 78% holding in Virgin Active health clubs, and, since the end of 2015, 57% of frozen food supermarket Iceland. In South Africa the group controls food company Premier; Wiese is also the controlling shareholder in food retailer Shoprite.
Group sales rose sharply during the 2000s, but have plateaued since 2010, with sales more or less unchanged for five consecutive years at between £1.4bn and £1.5bn, despite a larger store estate. That stall led to the abrupt departure of CEO Carl McPhail in 2011. Revenues for the year to March 2014 rose 3% to £1.53bn, their best performance for many years. The sale of Mim caused a decline for the year to 2015 to £1.41bn. However, like for like sales for the New Look brand rose 4%. Pretax profits more than doubled to almost £51m. For the year to 2016, revenues were £1.49bn, with underlying profits of £59m. (Refinancing of the group's debt resulted in a reported net loss of £34m).
However the following year witnessed a sharp downturn in performance, with six consecutive quarters of declining sales. For the year to March 2017, revenues slipped over 2% to £1.45bn, and the group reported a pretax loss of almost £17m. Increases in international and ecommerce sales were undercut by a 9% decline in UK bricks and mortar sales to £972m. Combined ecommerce sales were over £290m. However, same-store sales across the group fell 7%.
The following year saw an even worse slump, with sales falling to £1.3bn, including a near-20% decline in ecommerce sales. Same store sales fell by 12%, and the group posted an annual loss of £235m.
The group is also sitting on net debt of over £1bn inherited from its purchase by Brait.
Following the departure of Carl McPhail in 2011 he was succeeded as CEO by Alistair McGeorge. Anders Kristiansen was appointed as chief executive in January 2013, at which point McGeorge moved to chairman. He stepped down in May 2014, to be succeeded briefly as non-executive chairman by New Look's founder Tom Singh who had maintained an executive position with the group on and off since the late 1990s, latterly as commercial director. He still owned around 22% of New Look's equity up to its acquisition by Brait in 2015, and continues to be a director of the company along with his daughter Anna Singh. Brait CEO Jon Gnodde became non-executive chairman following the deal. The sharp downturn in performance between 2016 and 2017 led to the departure of Kristiansen in Sept 2017. Danny Barrasso, previously UK managing director, moved up to interim chief executive before leaving the group in early 2018. Alistair McGeorge was reinstated as executive chairman.
In summer 2017, the group hired former Inditex executive Paula Dumont Lopez to become chief creative officer, taking over from veteran designer Roger Wightman. However that appointment was cancelled following the ousting of Kristiansen, and Wightman remains as chief product officer. (Lopez joined arch-rival Primark instead). Richard Collyer is CFO.
Marketers include Georgina Whalley (group marketing director), Paul Rasmussen (head of digital) and Matt Roberts (head of CRM)
The company was founded in 1969 in sleepy market town of Taunton, Dorset by Anglo-Indian entrepreneur Tom Singh, whose grandparents had run a drapery shop since arriving in the West Country from the Punjab in the 1930s. He opened the first store with money borrowed from his parents and used it as a launch pad for a series of additional outlets, co-run with his wife, and mostly in smaller market towns where competition from other retailers was less intense. The business gradually expanded over the following two decades, including the opening of stores in France. After a couple of false starts in the early 1990s, the business floated in 1998, earning the Singh family a substantial fortune. In 2000 the company merged its 30 stores in France with local chain Mim in return for a 51% shareholding in the combined business. It bought out the remaining minority stake in 2003 for around £30m.
Following floatation, Tom Singh remained a director, and with his wife and parents retained a controlling 34% stake in the business. In 2003 he announced that he was considering his position, leading to speculation that New Look could become the bid target for a larger buyer. Instead, Singh eventually tabled a £662m offer to take the group private again, backed by investment funds Apax and Permira. The deal was accepted by shareholders in 2004. Singh launched a full overhaul of the business, opening a new automated distribution centre and restructuring the company's supply chain. He also expanded the chain with the purchase of 34 former Littlewoods outlets. Sales and profits have risen sharply since then, allowing Singh and his other private equity investors to repay their investment in 2005.
In 2006, Singh relinquished his executive role once again although he remained a director. There was speculation that the group might float once again in 2007, but any such plans were abandoned in the wake of turbulence in the markets. New Look finally launched its IPO prospectus in February 2010, with a target valuation of the business at £1.7bn. It withdrew plans for a float just a week later, citing renewed turbulence in the markets.
Last full revision 3rd April 2018
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