New Look hails ‘strong year’ despite widening losses

The company said the £87.8m loss included an impairment charge of £47.4m following an accounting procedure conducted in the period valuing its property leases and other assets.

Adjusted EBITDA increased 67% to £42.2m, compared with £25.2m in 2022. Gross margin stood at 45.8%, up from 43.1%, driven by the retailer’s full price sales strategy.

Total revenue edged up to £844.7m during the year, compared with £839.6m in the previous year.

As part of its trading update, the retailer also confirmed that it has completed a £100m debt refinancing deal ahead of its existing loan maturing in June next year. The company said its summer ranges were well-received, with popular products including sandals, midi dresses, printed trousers and occasionwear.

It has continued to right-size its store estate, as well as seeking new stores, with openings planned in Grimsby and Leicester later this month.

Looking ahead, New Look remains cautious on outlook as inflationary pressures continue to impact consumer sentiment but it is confident in long-term appeal of the brand. The retailer added that its CVA, launched in 2020, is on track to end in 2024.

CEO Helen Connolly told Drapers: “We have had a strong year. I’m really proud of the resilience that both the team and the business have shown in navigating what obviously have been really tough external conditions.

“We have been focusing on the core business, whether it be through keeping our stock models tight, or focusing on our full-price sales, less marked down and far more targeted promotional activity, rather than a blanket activity. “

CFO Richard Collyer added: “We understand the pressure that [customers] are facing. We will be sensible in how we approach [the season, by offering great value and products] while making sure we protect our positions. We’re excited and let’s see what the what Christmas and the golden quarter bring.”