New Look reports £522m loss amid cost saving efforts

Fashion retailer New Look has reported a statutory loss before tax of £522.2m in its full year results for the 53 Weeks to 30 March 2019. This was compared to the previous year’s loss of £190.2m, however the company said this was “principally driven” by £423.3m goodwill and brand impairment charge (non-cash) relating to its restructuring. New Look also implemented a restructuring plan which helped the retailer to reduce its £1.35bn debt to £350m. Furthermore, it secured £150m in new long term capital. The retailer reported a core underlying operating profit of £33.2m, a turnaround from its full year 2018 loss of £35.7m. The company’s revenue dropped 3.8% to £1.23bn in line with expectations given its focus on driving more profitable sales and fewer stores. Its core like-for-like (LFL) sales fell 1.6%, an improvement on the previous year’s 11.6% drop. New Look’s adjusted EBITDA increased to £80.2m compared with the previous year’s £18m. Alistair McGeorge, executive chairman, said: “We have achieved a remarkable amount over the past year, delivering on our aim to achieve financial and operational stability. Firstly, we have made progress in recovering the broad appeal of our product and have delivered year-on-year improvements in profitability across key areas. Our e-commerce and store businesses are now working together better than ever, and we are starting to see the benefits of improved speed to market. “Secondly, we have exceeded our cost saving plans, addressed our previously over-rented UK store estate, completed the review of our international businesses, and delivered further operational efficiencies across the business. Thirdly, we have successfully completed our financial restructuring, which has secured the company’s future and long term profitability by materially deleveraging our balance sheet and providing us with the financial flexibility to better attack our future.” He added: “We recognise that the past year has been incredibly challenging for our colleagues, investors, suppliers, creditors and other stakeholders. We are grateful for their continued support, and I particularly want to thank those colleagues who left the business for their contribution during their time here. “Whilst New Look enters the new financial year in a fundamentally healthier and stronger position, in many respects today marks the starting line. We have more work to do to enhance trading and deliver further operational improvements as we continue our turnaround plans.”