New Look to raise prices as the cost of cotton rockets

BUDGET retailer New Look yesterday warned that its prices would be hiked by up to eight per cent as the cost of cotton continued to surge.

The company, which provides cut-price fashions to young shoppers, saw UK sales drop 4.5 per cent in the 26 weeks to 25 September.

Chief executive Carl McPhail said price rises were inevitable, but said that the sales fall came against very strong comparative figures for the year before.

New Look, which is owned by private equity firm Permira and Apax Partners, postponed a float planned for February after volatile markets saw it pull back.

McPhail said: “We are not ruling out a float in the future but we do not have to do it. We have a very strong cash position.”

He also said Britain’s second-biggest womenswear retailer by value of sales was gaining market share and its internet business was closing the gap on online specialist ASOS.

Meanwhile international sales, which account for about 23 per cent of the total, climbed 2.4 per cent on a like-for-like basis.

New Look, which runs over 1,000 stores in Britain and abroad, said in February it had hoped to raise £650m in its planned flotation, to reduce its £1bn of borrowings.

But investors were wary of the plan, particularly after department store chain Debenhams returned to the stock market in 2007 laden with debt and saw its shares plunge. Primark earlier this week said that the soaring price of cotton was hitting its margins.