New Look's bonds slump as sales disappoint

 
Helen Cahill
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The directors did not take a bonus his year (Source: New Look website)

New Look's bonds have come under pressure after the clothing retailer posted plummeting sales for the year.

The retailer's debt is listed on the Luxembourg stock exchange and, on Friday, was trading at just over half its value.

Last week, New Look announced a like-for-like sales drop of 6.8 per cent. Underlying profit fell by 44.1 per cent, down from £174.7m to £97.6m.

Read more: New Look's directors skip bonuses as sales fall

And, the firm said it does not see business getting easier over the coming months, due to rising input costs, and wages coming under pressure as inflation increases.

Following the disappointing results, New Look's directors waived their bonuses for the year.

In 2015, New Look issued £1.2bn in bonds following its takeover by the South African private equity firm Brait. Following the news of New Look's sliding sales, a £180m portion of the bonds were trading at 55.9 per cent of their value, down from trading at 78.8 per cent.

Many other retailers are struggling with the same pressures as New Look. Accounts filed for Sir Philip Green's holding company at Companies House show that profits at his fashion empire fell by 16 per cent for the year. Meanwhile, Marks and Spencer's clothing and home sales have fallen by 5.9 per cent.

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