New Look to revamp its store portfolio
Troubled fashion chain embarks on property review as it continues search for a chief executive
Sunday 28 August 2011
Debt-laden fashion retailer New Look has embarked on a property review as part of its turnaround as the search for a new chief executive gets under way.
Group property director Richard White, who joined the business in February, has begun a review of the 604-store estate in the UK. He has hired property adviser CB Richard Ellis to analyse the future of its stores, which range in size from 600 sq ft to 30,000 sq ft.
New Look has struggled following a dire trading period last year, with its pre-tax profits wiped out. It made a £36m profit the year before.
Earlier this year Alistair McGeorge was drafted in as executive chairman amid a management shake-up, and Tom Singh, who founded New Look in 1969 and still holds a 22.4 per cent stake, returned. Mr McGeorge kicked off a strategic review in June and headhunters are this month being sought to identify a new chief executive.
The property review is part of New Look's plan to improve the business and reduce costs. Mr White said: "Everything is being reviewed, analysed and changed. There will be a new store refit to ensure we have a flexible store design that works in all our sizes of stores. We will look at the entire network of stores and at how to use the space we have, better."
New Look began opening stores across the UK in the 1970s. But, as shopping patterns have changed, many of its older shops are now the wrong size or in the wrong location.
The chain has started discussions with landlords on leases that are coming to an end. New Look has proposed to close some locations unless landlords can offer rent-free deals; it would pay just rates and service charges. In some cases it has offered to pay a percentage of that store's turnover.
Mr White added that where some of its stores are too big, it is looking at options to sublet space to concessions and other retailers.
New Look is one of a number of retailers planning to reduce store numbers by predominantly focusing on larger stores in fewer locations. Next and Sir Philip Green's Arcadia have been operating this strategy for some time.
Sir Philip has said he is closing 300 stores when leases come to an end and will move some of his Arcadia brands, such as Dorothy Perkins and Burton, into Arcadia's Bhs stores.
New Look will be keenly watched by Mary Portas, who was asked by the Government in May to lead an independent review into the future of the high street. Ms Portas said at the time: "With town centre vacancy rates doubling over the past two years the need to take action to save our high streets has never been starker."
Liz Peace, the chief executive of the British Property Federation, said: "The issues facing our high streets are extremely complex, with recession, structural changes caused by the internet and consumer preference all in play.
"In times of change it is important that leases adapt. Landlords are increasingly flexible with leases that are shorter, offering breaks and substantial rent-free periods."
New Look's net debt stood at £1.035bn earlier this year. Its private equity owners, Apax and Permira, who hold 27 per cent each, withdrew plans for a £1.8bn flotation in 2010.
New Look is also thought to be planning to boost its online sales by introducing more brands.
- 1 Isis propaganda video shows 25 Syrian soldiers executed by teenage militants in Palmyra
- 2 Number of young homeless people in Britain is 'more than three times the official figures'
- 3 The map showing the most dangerous tourist destinations in Europe, according to the Foreign Office
- 4 Right to die: Belgian doctors rule depressed 24-year-old woman has right to end her life
- 5 The biggest first date turnoff has been revealed
Isis propaganda video shows 25 Syrian soldiers executed by teenage militants in Palmyra
Number of young homeless people in Britain is 'more than three times the official figures'
Van driver who comforted Clark Carlisle and called 999 after suicide attempt dies age 24
Greece debt crisis explainer: A history of just how the country landed itself in such a mess
Greece debt crisis referendum: Greeks want to vote No to austerity – but Yes to Europe
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
More Britons believe that multiculturalism makes the country worse - not better, says poll
'I wish the BBC would stop calling it Islamic State' – David Cameron unleashes frustration at broadcaster
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
iJobs Money & Business
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...
£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...
£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....
£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...