NEW LOOK swung back into profit last year as the retailer started to reap the benefits of a turnaround plan that has driven out £100m of costs over the last two years and helped to revive sales.
The company, owned by its founder Tom Singh and private equity groups Apax and Permira, reported a pre-tax profit of £3.1m in the year to 30 March, up from a loss of £54.5m the prior year.
Revenues rose 2.5 per cent to £1.48bn, with like-for-like sales down 0.7 per cent but online sales up 50.1 per cent.
Executive chair Alistair McGeorge was parachuted into the firm two years ago after a failed IPO and falling sales.
He embarked on a three-point turnaround plan aimed at cutting costs, improving margins by selling fewer clothes at discount prices and driving sales growth.
“Each of those stages have made a significant contribution,” finance chief Alastair Miller told City A.M. “We have taken £100m in costs out of the business in the last two years... and reduced markdowns from 33 per cent to 26 per cent – driving our two per cent increase in margin.”
The group runs 1,100 stores in 32 countries. It has revamped 145 of its 590 UK stores, which Miller said helped deliver an eight per cent sales uplift. New Look’s net debt stood at £1.1bn after a refinancing. It has now set its sights on China, with its first shop due to launch in 2014.