New Look blames poor weather for fall in sales

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The Independent Online

New Look, the high street clothing retailer, became the first major fashion victim of Britain's absent summer yesterday when it reported a sharp fall in sales due to "unseasonable weather".

New Look, the high street clothing retailer, became the first major fashion victim of Britain's absent summer yesterday when it reported a sharp fall in sales due to "unseasonable weather".

The warning knocked 12 per cent off New Look's share price and sparked fears of a string of downbeat sales updates from Britain's high street stalwarts. Debenhams is due to update the market on its sales progress today with Marks & Spencer due to issue a sales statement at its annual shareholders meeting tomorrow.

New Look, which specialises in fashionable clothing at budget prices, said sales in the 15 weeks to 9 July were down by 3.9 per cent compared with last year, excluding new selling space. The company blamed a combination of poor weather and a strong comparative period last year when the weather was good.

Though much of Britain basked in sunshine yesterday it came too late for New Look's figures. Steve Sunnucks, chief executive, said: "I've been in retailing for over 20 years and I can say that the last few weeks have been very, very difficult."

Asked to comment on the outlook for other retailers, he said: "I would have thought the department stores and larger shops like M&S would not be so badly hit because when the weather is bad people prefer to stay in one place rather than go outside. That affects smaller stores like ours."

New Look shares fell 11.5p to 97.5p on the warning. The sales update was a fresh blow to the embattled company, which ousted its chief executive in May following a bottom-pinching incident at an industry dinner. Nick Bubb, retail analyst at SG Securities, said: "It is going to be difficult for them to restore credibility. The question is whether they will get squeezed between M&S and Matalan."

New Look said it hoped to combat the weak sales with cost-cutting measures designed to save up to £5m a year.

Meanwhile Matalan, the fast-growing chain of out-of-town discount stores, shrugged off the high street gloom. It reported booming trading figures with underlying sales in the nine weeks to 8 July up by 30.8 per cent compared with the same period last year. Margins have also improved, the company said. Its share of the UK clothing market has grown from 1.7 per cent to 2 per cent in the year. Matalan shares rose 8p to 562p.

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