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Banks hired by NewLook

FASHION chain New Look yesterday edged closer to a possible &pound;1.7bn stock market flotation by handpicking banks to work on the deal.<br /><br />The budget fashion chain, owned by private equity firms Apax and Permira, has chosen to work with JP Morgan Cazenove, Deutsche Bank and Credit Suisse. Lazard has acted as an adviser to the retailer for the past year while it has considered its options. <br /><br />Last week New Look held a beauty parade of banks which was also said to include unsuccessful suitors Goldman Sachs and Nomura. All parties declined to comment.<br /><br />It is believed that New Look will launch an IPO next year, but it maintains its immediate focus is on a successful Christmas trading period.<br /><br />If a flotation takes place, it is expected that chairman Phil Wrigley will step down to make way for a successor with City experience, sources have said.<br /><br />The group is one of a number of retailers looking at a possible IPO next year amid rising equity markets and signs of a consumer recovery.<br /><br />Other flotation candidates include online grocer Ocado, pet food specialist Pets at Home and fashion retailer Supergroup.<br /><br />In the year to March 2008, New Look reported a 15 per cent growth in sales to &pound;1.3bn, while profits were up 10 per cent to &pound;217.6m. But the company still has more than &pound;1bn of debt.<br /><br />New Look, which was founded in 1969 by Tom Singh, who still owns 22 per cent of the group, was taken private by Apax and Permira in 2004 for &pound;699m. In 2007 the retailer&rsquo;s private equity owners abandoned plans to sell the company after bidders failed to meet their near &pound;2bn asking price.