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New Look profit rises – but silence on IPO

City A.M. Reporter
BUDGET fashion retailer New Look posted a 17.7 per cent rise in annual profit but has remained silent about its ambitions for a stock market return after postponing its flotation in February.

The chain, which blamed volatile financial markets for derailing an expected £1.7-£2bn listing, said higher taxes and unemployment, and a weaker pound, would make for tough trading in the year ahead.

However, it was confident of coping, thanks to a trend towards budget fashions which has also spurred strong growth at rivals like Primark and Matalan.

New Look, taken private in 2004 by private equity firms Apax and Permira along with founder Tom Singh, said it made an underlying operating profit of £163min the year to 27 March.

Turnover rose 10.7 per cent to £1.46bn.

The group, which runs over 1,100 stores in 13 countries, said it gained market share in Britain and saw particularly strong growth in online sales.

It said in a statement: "The retail sector remains vulnerable to economic factors such as increases in taxation, sterling weakness and unemployment.

"Looking further out, however, we remain confident in the strength of our business model and future growth prospects, underpinned by the market's structural shift to value."

New Look said in February it hoped to raise around £650m to reduce its debts which at that time were more than £1bn.

However, investors were wary of the plan amid an uncertain outlook for consumer spending and volatile financial markets.