New Look narrowed its losses in the first half of the year, despite a decline in sales caused by the ongoing challenges facing the UK high street.
The retailer reported that its statutory loss before tax was £11.2m, compared to a loss of £41.9m in the first half of last year.
Revenue fell from £601.1m to £523.8m as like-for like sales in the UK and Ireland dropped 7.4 per cent, reflecting “ongoing consumer uncertainty and seasonal volatility”.
Adjusted earnings before interest, tax, depreciation and amortisation were £42.6m, compared to £62.5m the previous year.
Why it is interesting
Despite the challenges facing the high street, which New Look executive chairman Alistair McGeorge said he does not expect to improve, the retailer sounded confident about its prospects in the second half of the year.
Despite the overall decline, sales growth was positive in July and August. “All is to play for as we enter peak trading,” New Look chief operating officer Nigel Oddy said.
The retailer has reduced the product options available in store by 25 per cent and by 32 per cent online in a bid to enhance customer experience.
The company said it will revive its investment programme in smaller profitable stores and has introduced new concessions to replace its in-store menswear offering.
What New Look said
Executive chairman Alistair McGeorge said: “We are reviewing our customer strategy, and, as I have said before, investing in our leadership and people will be the single biggest enabler to transforming our business.
“This time last year we were forced to trade for cash to meet our interest obligations and we lacked the financial stability needed to operate effectively and invest in the business. Now, with our financial restructuring complete, we are in an entirely different position, with a materially deleveraged balance sheet, lower cash debt servicing costs and strengthened liquidity.
“Even set against the tough trading conditions of H1, we enter H2 with much improved operational foundations and a healthy balance sheet capable of weathering continuing volatility in the retail and consumer environment. Whilst we do not expect the retail environment to improve, we expect a better second half performance as we focus on driving profitable sales, maintaining strong control over our cost base and investing prudently in our people.”
Main image credit: Getty