New Look bolstered the notion that retailers fare better in private hands yesterday when it revealed underlying sales had leapt ahead over the Christmas period.
The fashion retailer, which succumbed to a £699m management buyout last February, said like-for-like sales shot 11.6 per cent higher during the 14 weeks to 1 January. Gross margins also rose, it added.
New Look's outperformance was in contrast to its record as a quoted retailer when the company was more used to its sales falling than rising. Over Christmas 2003, its like-for-like sales fell 3 per cent. Phil Wrigley, the chief executive, admitted that the distraction of the buyout had hit the group's top line last year. "The whole business suffered. But because it has been well run, it didn't impact bottom line profit," he said.
Gilets, mini skirts, baby doll tops, and "anything embellished with rhinestone" flew out of New Look's UK stores, as its customers largely ignored this season's prim, ladylike look, Mr Wrigley said.
He said fears about consumers' ability to spend were "overblown", adding: "Things are in a pretty good shape at a macro level. We see slightly more challenges this year but it's not a doomsday scenario." Despite yesterday's warnings from Woolworths and House of Fraser, Mr Wrigley said: "I don't think Christmas will turn out to be as dreadful as characterised for the market as a whole."
New Look also outlined its ambitious expansion plans, ahead of a possible return to the stock market as early as 2007. Mr Wrigley is confident the group can double in size, giving it an eventual market capitalisation of £1.5bn. The group, owned by Permira, the private equity firm, is expanding into menswear, which it sells from 30 stores, and childrenswear, as well as overhauling its French retail arm, Mim. It is adding 200,000 sq ft of trading space in the UK this year, taking its total trading space to 1.8m sq ft.
- More about: