Nick Goodway: Teenagers move markets, so the all-new New Look had better stay well clear
Wednesday 14 August 2013
Outlook Three years ago my then teenage daughters helped to scupper New Look's planned stock market flotation. I had applied the highly scientific Dad's credit card test. Choose a store, enter it when it opened on a Saturday morning and rendezvous with your Pater at the checkout 30 minutes later.
Primark won hands down (they were much younger then). New Look barely made a small dent on the credit card balance.
New Look's owners – the private equity firms Apax and Permira, alongside its founder, Tom Singh – wisely decided in February 2012 not to go ahead with an initial public offering that could have valued it at a staggering £1.7bn.
I, unwisely, failed to follow through the experiment and so did not buy shares in Primark's owner, Associated British Foods, which have since doubled in price.
Anyway, to the present, and New Look has a new look. In fact several.
It has new management with the chief executive Anders Kristiansen, a Dane newly arrived from Chinese retailing.
It has that new look (I can't help the puns), or, as the management prefers to say, it has "concept stores". To be precise, about 170 of the 590 UK shops have been refurbished. And management (the new one) says they are trading much better than the old ones.
It has new financing. A successful bond issue in May pushed the debt maturity out to 2018 and net debt is steady at £1.1bn. That debt, and the plan to pay it down, was another reason the 2010 share issue was scuppered.
And New Look even seems to have traded well through the bizarre weather we have experienced since April. It needed fewer sales with less stock and entered July's summer heatwave at a storming pace, with dresses and skirts flying off the rails.
Best of all New Look reinforced the point that an initial public offering is not on the cards for at least this year and probably several years to come.
Buoyed by the new management's enthusiasm, I returned to the younger daughter for her views, via BBM, natch.
"Cheap shoes," she opened positively. "Everything else just looks crap to me."
"No idea why they spent so much money on their Oxford Street store just to look like Topshop but allow the Brent Cross branch to look cheaper than Primark." Ouch.
And the dresses and skirts? "Poorly designed and poorly made. " So not a fan? "Last place I would shop even after Primark."
While these views are not necessarily those of the author of this column, it would make a lot of sense for New Look to remain in private hands for a while longer.
- 2 Italian police 'reveal' what Jesus looked like as a young boy
- 3 General Election 2015: 14-year-old boy asks Nick Clegg – 'can you kill Katie Hopkins?'
- 4 University student in court for allegedly covering housemates' food in window cleaner and spit
- 5 Ryan Gosling posts tribute to 'Ryan Gosling Won't Eat His Cereal' creator Ryan McHenry
Italian police 'reveal' what Jesus looked like as a young boy
Who should I vote for? The Independent quiz matches best political party for undecided voters ahead of the general election
Mysterious 'X-Files' sounds heard miles above the Earth
Garland shooting: Isis claims attack on Prophet Mohamed cartoon contest in Texas as its first action on US soil
Met Gala 2015: Beyoncé manages to out-skimp Rihanna, Miley and Kim Kardashian combined with near-naked ensemble
In defence of liberal democracy
Over 50,000 families shipped out of London boroughs in the past three years due to welfare cuts and soaring rents
EU asylum policy is 'a direct threat to our civilisation', says Nigel Farage
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
General election live: SNP suspends two members for disrupting Labour rally
iJobs Money & Business
£20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...
£25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...
£215 per day: Ashdown Group: Junior Project Manager (website, web application ...
£40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...