New Look slashes prices amid sharp fall in annual sales

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Fashion chain New Look is continuing to cut prices as it tries to turn around its business.

New Look wants 80% of its clothes to sell for less than £20.

The price cuts come amid falling sales. Like-for-like sales plunged by 11.7% in the financial year which ended in March, and website sales tumbled 19%.

New Look is one of many retailers this year that struck a Company Voluntary Agreement (CVA) under which a company buys time to sort out its debts.

It is trying to broaden its appeal to include older customers, giving it an age target range of between 18 and 45.

Results from New Look, which has hundreds of stores and has been a High Street presence since 1969, contrast sharply with online rival Boohoo, which also reported results.

Sales of its three brands, Boohoo, PrettyLittleThing and Nasty Gal were 53% higher in the most recent quarter compared with the same quarter last year.

Boohoo brands target customers aged between 18 and 28, with clothes priced at about £15.

Clothing retailer, Ted Baker, also released profits on Tuesday. Its half-year sales were up 4%, mainly thanks to growth in its online sales.

New Look

  • Founded 1969 with first store in Taunton, Somerset
  • 594 outlets in UK
  • 213 outlets in Europe, China and the rest of Asia
  • Bought by private investment vehicle Brait in 2015. Brait also owns a stake in Iceland and Virgin Active Gym

‘Self-inflicted issues’

New Look also booked a one-off cost of £34m, partly for discounting old stock.

The company said it had made “significant progress”, which will be reflected in next year’s results.

Last November it brought back Alistair McGeorge, who ran the business between 2012 and 2014.

Mr McGeorge said: “Last year was undoubtedly very difficult for New Look, with a well-documented combination of external and self-inflicted issues impacting our performance.

“We still have more work to do to restore long-term profitability, but I am confident we are now better placed to achieve this than we were when I returned to the business over six months ago.”

Under its turnaround plan, the company is cutting 1,000 jobs and closing 60 stores.

The plan will cut the fashion chain’s rents by between 15% to 55% across its remaining 393 stores.

Last month, the company hit the headlines with news it was attaching higher prices to its bigger sizes, a policy it said it would reverse.

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