New Look yesterday revealed that it had sealed the turnaround that has positioned the discount retailer at the cutting edge of women's high street fashion by more than doubling its profits.
The group, which saw its share price collapse to 50p last year, also said that underlying sales in the first two months of this year had risen by 15.4 per cent.
Stephen Sunnucks, the chief executive, attributed the pick-up to the recovery plan that was launched last June. This has seen the group spruce up its stores portfolio and revamp its supply chain to enable it to better mimic catwalk trends, earning the chain valuable plaudits from style magazines such as Vogue and Elle.
While New Look's soaraway sales increases have been helped by easy comparisons and a booming high street, Mr Sunnucks is confident going forward. "We're in a much stronger position than we've been in before. We feel we can grow whatever happens to the market, particularly in the second half," he said.
However, analysts expect sales growth to slow down sharply in line with the rest of the market. A number of high street chains such as Next and the discount retailer Peacock have already reported slowing growth.
Record pre-tax profits for the year to 30 March of £62.3m compared with £30.6m last year confirmed that New Look had overcome a raft of corporate headaches from successive profit warnings to a boardroom shake-up.
New Look fell spectacularly out of favour with the City in the wake of a series of misguided actions at board level that culminated in the departure of its chief executive, Jim Hodkinson, in 2000 after he famously pinched the bottom of one of his female employees. As evidence of the group's trading turnaround filtered through its shares have soared, closing up 3p yesterday at 268.5p.
The group, which has about 500 shops in the UK and a joint venture in France, said its decision to relocate to larger stores and renovate smaller shops had buoyed the growth in sales. Turnover last year rose to £585.4m compared with £469.8m a year earlier. It is planning to double its total selling space in the UK to 2 million square feet within five years. It expects to open a further 20 new bigger stores this year, bringing its total to 60 out of a planned 160.
Mr Sunnucks said the group's better fashion "hit rate" had boosted the gross margin by 4.1 per cent. New ranges, including sizes up to 24, girlswear, accessories and swimwear, had also helped, he added.
Although traditionally best known among teenagers, New Look said that its market share among 25 to 34 year olds had increased by 15 per cent. The group is also looking at expanding its joint venture in France, where it has a 51 per cent stake in Mim, a private French retailer.
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