New Look has suffered declines in the “unseasonably warm” three months to December 27- but the fast fashion chain is still buoyant after growing market share.
New Look's revenues dropped 1.6 per cent in the third quarter, from £406.6m to £399.9m. Adjusted EBITDA was £76.8m, down 2.7 per cent from £78.9m last year.
However, underlying operating profit was up 1.8 per cent to £62.8m and profits before tax rose 28 per cent to £35.2m. The period included the sale of loss-making French chain Mim in November.
Christmas was strong, with sales up 4.1 per cent in the seven weeks to January 3.
Looking at the year to date, New Look's figures appear stronger. Revenues are up 2.9 per cent to £1.1bn for the nine months, while underlying operating profit has climbed 6.7 per cent to £149.3m. Profit before tax is up 29.2 per cent to £63.3m.
Why it's interesting
New Look is now over a year into its turnaround under relatively new chief executive Anders Kristiansen. The chain had been hit hard by the rise of Primark, and had been viewed as having lost its way.
During his tenure, New Look has shuffled its store portfolio, altered its international strategy to chase emerging markets like China, as well as key European markets like France and Germany, and bolstered its menswear division as it looks to steal market share from the likes of Topman.
Financials have also improved, and although this quarter, which included Christmas and Black Friday, is down, New Look has still managed to grow market share when other retailers have struggled.
What New Look said
As with so many retailers, the fashion chain is cautiously optimistic, noting that there are still concerns around the wider consumer environment, but insisting it is “confident in the strength of the New Look brand”.
Kristiansen said: “This is a robust performance against a challenging backdrop. Although October and November were affected by unseasonably warm weather, we grew market share in the period and our Christmas trading figures are testament to the quality of our product and the continued investment made in our multichannel offer, both in-store and online.
"It was a record online sales performance over the Christmas period with all channels well prepared for peaks in demand around Black Friday, Cyber Monday and Boxing Day. Mobile and tablet ordering overtook desktop for the first time on Boxing Day."
He added: "Despite the heavily promotional environment, we maintained the level of full price sales on last year and grew gross profit margin."