New Look stock market flotation shelved

High street fashion chain New Look shelved plans for a stock market flotation today in the wake of recent financial turmoil.

The decision marks the second time in two years that New Look's owners have scrapped an initial public offering (IPO) for the retailer.

It is also the latest in a series of market listings to be put on hold this week amid uncertainty for equities.

The private equity owner of Alton Towers and Madame Tussauds firm Merlin Entertainments was revealed today to have put the leisure group's stock market debut on ice, just a day after the same company halted an IPO for US travel business Travelport.

New Look, which is owned by buy-out firms Permira and Apax Partners, stressed that today's move will not see it bin flotation plans altogether.

Carl McPhail, chief executive of New Look, said: "We have taken the difficult decision to postpone the IPO as a result of the considerable volatility in the equity markets.

"We remain convinced of the strengths of the New Look business and its suitability as a public company. We will re-evaluate our options when market conditions improve."

New Look has 1,010 stores, including 601 in the UK, and rang up sales of more than £1.3 billion in its most recent financial year.

The group was hoping to raise around £650 million in the stock market listing to pay down debt and position it for further growth.

But its plans have been thrown off course by heightened volatility on markets in recent weeks, sparked by fears over debt levels in Greece and other embattled European countries.

The recent eurozone woes compounded a shares sell-off seen after America announced plans to tax banks and limit their activities.

London's FTSE 100 Index has recently slumped to lows not seen for three-and-a-half months and America's benchmark index closed below the 10,000 mark at one stage.

But it is also believed that investor concerns are behind the spate of IPO cancellations.

There is said to be a reluctance among overseas institutional investors to put money into UK shares generally, given unease over the value of sterling.

More specifically to New Look, investors are thought to have been worried it was trying to list at too high a price and with too much debt.

A spokeswoman for New Look insisted there was good appetite from investors and their initial feedback was positive, but said the firm would not have received the right price in current market conditions.

Since the beginning of the year, retail shares have fallen by around 11.3 per cent, according to the firm.

New Look abandoned plans to float two years ago after a lukewarm response from investors, while a £2 billion sale of the business also failed when the company was unable to agree a price with potential suitors.

Weymouth-based New Look was founded in 1969 by Tom Singh, and was taken private in 2004 by Apax and Permira for £700 million, with Mr Singh retaining a stake.

Since then its new owners have invested around £450 million in the business, although it now has an estimated £1.1 billion debt.

The IPO cancellations will be disappointing to private equity and investment bankers, with expectations for a new wave of listings as part of a market recovery.

Kraft's successful bid for Cadbury and KKR's recent deal for pet accessories chain Pets at Home were seen as heralding the return of deal activity.

But the decisions confirm the fragility of the recent New Year bounce-back, which helped drive the Footsie to levels not seen since before the collapse of Lehman Brothers in 2008.

Takeovers have also been hit by recent turbulence - the owner of discount retailer Matalan postponed sale plans earlier this week after its would-be private equity buyers baulked at a £1.5 billion asking price.

Markets will now be watching closely for an update on the expected £1 billion IPO of online grocer Ocado.

It is said to be planning to come to market in the second quarter of the year and is reportedly poised to appoint advisers.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooksA special investigation by Andy McSmith
Life and Style
Powdered colors are displayed for sale at a market ahead of the Holi festival in Bhopal, India
techHere's what you need to know about the riotous occasion
Arts and Entertainment
Larry David and Rosie Perez in ‘Fish in the Dark’
theatreReview: Had Fish in the Dark been penned by a civilian it would have barely got a reading, let alone £10m advance sales
Details of the self-cleaning coating were published last night in the journal Science
Approved Food sell products past their sell-by dates at discounted prices
Life-changing: Simone de Beauvoir in 1947, two years before she wrote 'The Second Sex', credited as the starting point of second wave feminism
peopleHer seminal feminist polemic, The Second Sex, has been published in short-form to mark International Women's Day
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Evening Administrator

£8 per hour: Recruitment Genius: This Pension Specialist was established early...

Guru Careers: Executive Assistant / PA

£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...

Ashdown Group: Graduate Application Support Analyst

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Reach Volunteering: External Finance Trustee Needed!

Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...

Day In a Page

Homeless Veterans campaign: Donations hit record-breaking £1m target after £300,000 gift from Lloyds Bank

Homeless Veterans campaign

Donations hit record-breaking £1m target after huge gift from Lloyds Bank
Flight MH370 a year on: Lost without a trace – but the search goes on

Lost without a trace

But, a year on, the search continues for Flight MH370
Germany's spymasters left red-faced after thieves break into brand new secret service HQ and steal taps

Germany's spy HQ springs a leak

Thieves break into new €1.5bn complex... to steal taps
International Women's Day 2015: Celebrating the whirlwind wit of Simone de Beauvoir

Whirlwind wit of Simone de Beauvoir

Simone de Beauvoir's seminal feminist polemic, 'The Second Sex', has been published in short-form for International Women's Day
Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Why would I want to employ someone I’d be happy to have as my boss, asks Simon Kelner
Confessions of a planespotter: With three Britons under arrest in the UAE, the perils have never been more apparent

Confessions of a planespotter

With three Britons under arrest in the UAE, the perils have never been more apparent. Sam Masters explains the appeal
Russia's gulag museum 'makes no mention' of Stalin's atrocities

Russia's gulag museum

Ministry of Culture-run site 'makes no mention' of Stalin's atrocities
The big fresh food con: Alarming truth behind the chocolate muffin that won't decay

The big fresh food con

Joanna Blythman reveals the alarming truth behind the chocolate muffin that won't decay
Virginia Ironside was my landlady: What is it like to live with an agony aunt on call 24/7?

Virginia Ironside was my landlady

Tim Willis reveals what it's like to live with an agony aunt on call 24/7
Paris Fashion Week 2015: The wit and wisdom of Manish Arora's exercise in high camp

Paris Fashion Week 2015

The wit and wisdom of Manish Arora's exercise in high camp
8 best workout DVDs

8 best workout DVDs

If your 'New Year new you' regime hasn’t lasted beyond February, why not try working out from home?
Paul Scholes column: I don't believe Jonny Evans was spitting at Papiss Cissé. It was a reflex. But what the Newcastle striker did next was horrible

Paul Scholes column

I don't believe Evans was spitting at Cissé. It was a reflex. But what the Newcastle striker did next was horrible
Miguel Layun interview: From the Azteca to Vicarage Road with a million followers

From the Azteca to Vicarage Road with a million followers

Miguel Layun is a star in Mexico where he was criticised for leaving to join Watford. But he says he sees the bigger picture
Frank Warren column: Amir Khan ready to meet winner of Floyd Mayweather v Manny Pacquiao

Khan ready to meet winner of Mayweather v Pacquiao

The Bolton fighter is unlikely to take on Kell Brook with two superstar opponents on the horizon, says Frank Warren
War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable