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The Investment Column: New Look arrives at last

NEW LOOK, the women's fashion retailer, has been threatening to come to the stock market for so long that owner Tom Singh must feel a huge sense of relief now that his time has finally come. It had to pull its float four years ago due to wobbly market conditions. And in the last 18 months it has considered a reverse takeover of Etam and Oasis when they hit problems.

New Look is certainly an impressive growth story. Its store numbers have grown from 150 to 400 in five years and annual profits have shown 50 per cent compound growth over the same period. It prices its garments keenly for those who love a bargain and, with short lead times, it can order more of good sellers and cut its losses on those that bomb.

Management has been strengthened considerably with the appointment of Howard Dyer from Hamley's as chairman, Jim Hodkinson from Kingfisher as chief executive and Tony Collyer from Allders as finance director. Trading is also good. New Look made profits of pounds 33m on sales of pounds 242m last year. And in the first quarter of this year like-for-like sales are up 9 per cent.

So far so good. The problem for New Look could be one of timing and here, one is almost tempted to question the quality of the advice. The retail sector is extremely fragile at the moment with fashion particularly weak after a shock profits warning from Next and Oasis' problems still fresh in the memory. Monsoon made the mistake of pricing its stock too highly in December and its shares have rarely risen above the issue price since.

New Look has a good story to tell investors but it will have to be priced keenly if it is not to suffer the same fate.