EMBATTLED fashion retailer New Look could close as many as 100 UK stores as part of a radical turnaround plan to cut costs and improve profitability.
This includes the 60 stores marked for closure under a company voluntary arrangement (CVA) approved in March.
Executive chairman Alistair McGeorge said yesterday the number which will definitely close after negotiations with landlords is 85.
Discussions are ongoing regarding a further 13 stores, of which McGeorge said half were likely to close. The company’s new strategy has so far yielded higher profits, but sales continue to decline.
Figures released yesterday show the company posted an underlying operating profit of £22.2 million for the first half, compared to a loss of £10.4 million in the same period last year.
But revenue declined by 4.2% to £656.9 million. Like-for-like sales under the New Look brand dropped by 3.7%, a slower rate than last year’s 8.6% drop.
The firm said the slide in sales was in line with plans to improve profitability with more full-price sales. McGeorge said the recovery was going well, but he wanted to “move faster”.
“We’re not looking to defend our position, we’re looking to attack,” he said.
In addition to the restructuring of its UK base, New Look last month announced its decision to exit its retail business in China, where it has 148 stores.
Annualised cost savings of £70 million have now been achieved, with another £8 million to be added.
As part of the turnaround, New Look has also improved its UK market share and ramped up online operations, increasing click and collect sales by 41% in the first half.
McGeorge warned that conditions on the high street remain challenging. “We continue to work hard to accelerate our progress, but we are facing into significant headwinds and uncertainties.”
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