What slowdown? New Look is bucking the high street's trend, as profits leap

Emma Haslett
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New Look reported a strong year, despite challenges for the high street (Source: Getty)

Here's one retailer making hay while the sun shines: New Look, beloved of budget fashionistas, has reported a jump in profits - despite slowing confidence on the high street.

The figures

In a statement this morning, the UK's second-largest women's clothing retailer said revenues rose 5.4 per cent to £1.49bn in the year to the end of March, while pre-tax profits rose 16.8 per cent to £59.1m.

New Look brand like-for-like sales rose 3.6 per cent, while UK like-for-likes rose 3.4 per cent. Those were driven by a stonking rise in online sales: on its own website, sales jumped 27.9 per cent, while on third party sites (such as Asos), they jumped 41.8 per cent.

The retailer also reported success abroad, with 85 stores in China, up from just 19 last year. It added that it had opened six standalone menswear stores.

Why it's interesting

It hasn't been an easy few months for retailers, with even Next, that great bellwether of high street success, cutting its full-year forecast at the beginning of last month.

But this morning it looked like there might be light at the end of the tunnel, with the British Retail Consortium suggesting high street sales grew 1.4 per cent in May, driven by online sales, which grew 13.7 per cent.

But it looks like New Look's decisions to focus on multichannel (aka online), menswear and international expansion are paying off. In February it said the new menswear-only stores had helped to boost revenues by 5.6 per cent in the three months to the end of December.

Today's statement came just over a year after the brand was bought for £780m by Brait, a private equity firm owned by South African billionaire Christo Wiese. Today chief executive Anders Kristiansen called the year a "milestone" for New Look.

What New Look said

On a less positive note, Kristiansen added:

Retailing in the UK is more challenging than it has been for some time, and we expect some impact on the business. However, while we remain watchful of volatility in consumer sentiment I am confident in our strategy and our ability to continue to execute it long term.

In short

A strong year for New Look under its new owner, driven by growth abroad and new strategic initiatives. But chief executive Anders Kristiansen has warned of bumps in the road ahead.