Profits wiped out at New Look in 2010

The fashion retailer New Look yesterday laid bare the depth of its annus horribilis in 2010 that saw its pre-tax profits evaporate after a series of self-inflicted wounds on pricing, fashion ranges and cost controls.

Alistair McGeorge, the executive chairman of New Look, has kicked off a strategic review of the private equity-backed chain, which pulled a £1.8bn flotation in February 2010.

He said the company had "suffered significant internal disruption" last year, notably from moving its buying-and-merchandising team from Weymouth to central London last spring, which resulted in about half of them departing.

However, Mr McGeorge – the former chief executive of rival Matalan who was parachuted in to New Look in April – pulled no punches in describing a catalogue of errors and lamented the company had not been "very cost-conscious" in terms of how it conducts business.

He said there had "not been enough value" in New Look's fashion ranges and that it had allowed too many products to drift towards the upper end of its pricing structure, which "undermined our competitiveness".

Mr McGeorge said: "We should be fantastic for going-out wear but for some reason we lost our way a bit." He added its supply chain was "too slow" and hinted it would look to rejig its supplier base to international territories closer to the UK.

New Look's UK like-for-like sales tumbled by 7.1 per cent over the year to 26 March, which would have been worse without booming online revenues. Its plummeting sales forced New Look to engage in fierce discounting that dragged its gross margins down by 280 basis points.

The overall impact was that New Look's pre-tax profits were wiped out, following a £36m profit the year before. Total sales at the chain, which has 650 stores in the UK, fell by 0.2 per cent to £1.46bn. It was helped by a more robust performance overseas, including at its Mim chain in France and Belgium.

Net debt at New Look – whose private equity owners, Apax and Permira, hold 27 per cent each of the chain – fell only marginally to £1.035bn. The company said it could meet its next repayment of £110m in its 2013 financial year from its cash flow. Following the ousting of its chief executive Carl McPhail and chairman John Gildersleeve in March, Tom Singh, who founded New Look in 1969 and still holds a 22.4 per cent stake, returned as commercial director.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Content Writer - Global Financial Services

£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Web Developer - PHP

£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Field Sales Consultant - Financial Services - OTE £65,000

£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Loan Underwriter

£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...

Day In a Page

The Silk Roads that trace civilisation: Long before the West rose to power, Asian pathways were connecting peoples and places

The Silk Roads that trace civilisation

Long before the West rose to power, Asian pathways were connecting peoples and places
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled

The honours that shame Britain

Outcry as donors, fixers and MPs caught up in expenses scandal are ennobled
When it comes to street harassment, we need to talk about race

'When it comes to street harassment, we need to talk about race'

Why are black men living the stereotypes and why are we letting them get away with it?
International Tap Festival: Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic

International Tap Festival comes to the UK

Forget Fred Astaire and Ginger Rogers - this dancing is improvised, spontaneous and rhythmic
War with Isis: Is Turkey's buffer zone in Syria a matter of self-defence – or just anti-Kurd?

Turkey's buffer zone in Syria: self-defence – or just anti-Kurd?

Ankara accused of exacerbating racial division by allowing Turkmen minority to cross the border
Doris Lessing: Acclaimed novelist was kept under MI5 observation for 18 years, newly released papers show

'A subversive brothel keeper and Communist'

Acclaimed novelist Doris Lessing was kept under MI5 observation for 18 years, newly released papers show
Big Blue Live: BBC's Springwatch offshoot swaps back gardens for California's Monterey Bay

BBC heads to the Californian coast

The Big Blue Live crew is preparing for the first of three episodes on Sunday night, filming from boats, planes and an aquarium studio
Austin Bidwell: The Victorian fraudster who shook the Bank of England with the most daring forgery the world had known

Victorian fraudster who shook the Bank of England

Conman Austin Bidwell. was a heartless cad who carried out the most daring forgery the world had known
Car hacking scandal: Security designed to stop thieves hot-wiring almost every modern motor has been cracked

Car hacking scandal

Security designed to stop thieves hot-wiring almost every modern motor has been cracked
10 best placemats

Take your seat: 10 best placemats

Protect your table and dine in style with a bold new accessory
Ashes 2015: Alastair Cook not the only one to be caught in The Oval mindwarp

Cook not the only one to be caught in The Oval mindwarp

Aussie skipper Michael Clarke was lured into believing that what we witnessed at Edgbaston and Trent Bridge would continue in London, says Kevin Garside
Can Rafael Benitez get the best out of Gareth Bale at Real Madrid?

Can Benitez get the best out of Bale?

Back at the club he watched as a boy, the pressure is on Benitez to find a winning blend from Real's multiple talents. As La Liga begins, Pete Jenson asks if it will be enough to stop Barcelona
Athletics World Championships 2015: Beijing witnesses new stage in the Jessica Ennis-Hill and Katarina Johnson-Thompson heptathlon rivalry

Beijing witnesses new stage in the Jess and Kat rivalry

The last time the two British heptathletes competed, Ennis-Hill was on the way to Olympic gold and Johnson-Thompson was just a promising teenager. But a lot has happened in the following three years
Jeremy Corbyn: Joining a shrewd operator desperate for power as he visits the North East

Jeremy Corbyn interview: A shrewd operator desperate for power

His radical anti-austerity agenda has caught the imagination of the left and politically disaffected and set a staid Labour leadership election alight
Isis executes Palmyra antiquities chief: Defender of ancient city's past was killed for protecting its future

Isis executes Palmyra antiquities chief

Robert Fisk on the defender of the ancient city's past who was killed for protecting its future