New Look, the fashion retailer tipped as the next high street takeover candidate, failed to deliver the sales recovery the City had hoped for yesterday, despite the recent sunny weather that sent shoppers flocking to the high street.
The company said like-for-like sales rose by just 0.1 per cent in the seven weeks to 12 July. This was an improvement on the 6.6 per cent fall in the eight weeks to 24 May, but meant like-for-like sales in the first 15 weeks of its year were still 3.5 per cent weaker than a year earlier.
"A recovery was expected, given the better weather," Mark Charnock, an analyst at Investec Securities, said.
Stephen Sunnucks, the chief executive, said the fashion trend for mini skirts, vests and three-quarter length trousers was still dragging down selling prices, although volumes were up sharply. "We are gaining market share, volume-wise," he said, adding that trading was improving as the autumn range entered the shops.
The company, whose founder Tom Singh is considering selling his 28 per cent stake, said gross margins had slipped just 0.2 per cent in the last 15 weeks, supported by having less stock in the summer sale. It added that comparisons with last year were particularly onerous. Trading at New Look, which targets bargain-hungry shoppers with an eye for the latest fashions, lagged its rival Peacocks, which earlier this week reported an 11 per cent rise in underlying sales.
Mr Sunnucks said this was because New Look stocked less tailored items and suits, which fetch higher prices, because its stores were smaller. "Tailoring is the next target. Hopefully with more space [from a move to open bigger stores] we will balance the range," he said.
Analysts said bid speculation was likely to centre on a management buy-out, although Mr Sunnucks declined to comment. Asked when he expected an outcome of the strategic review being carried out by Deutsche for Mr Singh, he said: "I am hoping it will be weeks, not months."Reuse content