New Look refuses to rule out float as profits jump

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The fashion chain New Look kept alive the possibility that it might float the business as it posted a 17.7 per cent uplift in annual profits yesterday.

The private equity-owned chain, which has 1,108 stores globally, blamed the volatility of the equity markets for its decision in February to scrap its initial public offering for the second time in three years.

Carl McPhail, the chief executive, said: "We are not ruling anything in or out [in terms of a flotation]."

But he added: "Nobody is doing specific work on an IPO [currently] as I don't think the markets are right at this stage."

New Look's underlying operating profit jumped to £163m for the year to 27 March. Total sales were up 10.7 per cent at £1.45bn. The chain, which has 664 shops in the UK and Republic of Ireland, was buoyed by a 5 per cent jump in its underlying sales.

It is backed by the private equity firms Apax and Permira and grew its market share by sales value from 4.7 per cent to 5.2 per cent for the 24 weeks to 28 March, according to Kantar Worldpanel.

However, New Look performed less well overseas, where like-for-like sales dropped 12 per cent as they were dragged down by the poor showing of its 300 Mim stores in France.

Mr McPhail said he expected the Government to lift VAT from 17.5 per cent to 20 per cent in next month's Budget but hoped its implementation would be delayed until January.

New Look's pre-tax profits rose to £36m, compared with £3m a year ago.

Number of shoppers tumbles

In a further sign of caution among the nation's shoppers, non-food retailers suffered a fall in footfall for the seventh consecutive month in May.

The number of people visiting stores was 3.7 per cent lower last month than in May 2009, despite stronger footfall over the two bank holiday weekends, said analysts at Synovate. The number of customers in non-food stores was 2 per cent lower in May than in April.

Tim Denison, of Synovate, said the data suggested an uncertain outlook for shops and the wider economy. He said: "May's figures look pretty disappointing, particularly as May 2009 was a very weak month for retail footfall.

"They are hardly welcoming to the new Government and certainly reinforce the scale of the challenges ahead."