Singh set to delay bid for New Look until new year

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The Independent Online

Tom Singh may wait until the new year before launching a formal offer for New Look, the womenswear chain he founded in 1969.

The retail entrepreneur and his private equity backers, Permira and Apax Partners, have made an indicative offer of 348p a share, valuing the business at £707m.

But people familiar with Mr Singh's plans say he is likely to wait until New Look's Christmas trading update on 13 January before deciding whether to bid and at what price.

New Look, the number three womenswear retailer behind Marks & Spencer and Next, unveiled a 3.8 per cent drop in half-year like-for-like sales yesterday. It said Apax and Permira had begun an eight-week due diligence process due to finish on 19 December.

Mr Singh and his partners could bid before Christmas but seem unlikely to want to undertake a deal over the holiday period and before seasonal trading levels are clearer.

New Look blamed the fall in sales for the six months to 27 September on an unusually high figure in the first half last year, when like-for-likes rose 8.7 per cent.

Stephen Sunnocks, the chief executive, said that in the eight weeks to 22 November, the decline was just 0.8 per cent. Overall sales rose 6.2 per cent to £334.5m and pre-tax profits climbed 7.3 per cent to £48.2m. Earnings per share rose 10.2 per cent to 16.2p and the interim dividend was lifted 9.1 per cent to 3p. Mr Sunnocks said: "We are pleased with the overall profit performance which is due in part to good management of costs and margins against a more difficult sales background in the first half.

"We have been encouraged by the positive response to our autumn/winter ranges, but trading conditions have been generally more difficult over the past few weeks."

A trial of menswear in 10 stores in the Midlands and the North-east of England was going well. The company began the trial after research showed that women buy 40 per cent of men's clothing.

Other key parts of the company's strategy were also progressing well, said Mr Sunnocks. This includes an expansion of retail space by 200,000 sq ft this year, well above the company's expected growth of 145,000 sq ft.