New Look eyes China expansion

PRIVATE equity backed New Look said it is planning a major push into China adding 50 stores over the next 12 months as the retailer posted a disappointing third-quarter trading update.

Chief executive Anders Kristiansen, who has been busy turning the business around, also said it was now fit to float should backers Apax and Permira resurrect plans to list it on the stock market. Back in 2010 they had pulled its initial public offering in the wake of the financial crisis, which would have seen the business return to the market having been taken private in 2004.

Kristiansen said: ‘We’ve demonstrated that in tough periods we continue to perform well so I think this business is ready [to float]. It is up to the shareholders whether the business should be floated or not.’

He heralded a ‘robust performance’ over the crucial Christmas period despite underlying sales falling 1pc for the third quarter. Total sales were down 1.6pc to £399.9m and operating profit shrank 2.7pc to £76.8m. However, Kristiansen insisted the performance was strong given tough market conditions that had affected all the big players on the High Street.

‘October and November were affected by unseasonably warm weather, we grew market share in the period and profits grew 28pc. How can I not be happy?’

Pre-tax profit increased to £35.2m from £27.5m and the firm claims to have grown gross margin. Shoppers snapped up anything with a check design from shirts to skirts and denim was also a popular trend.

New Look has 18 stores in China which will grow to 70 within the next 12 months overtaking Ireland as the firm’s second biggest market outside the UK.

Independent retail analyst Nick Bubb said: ‘New Look is very late in talking about Christmas trading, but in its Q3 results it tells a familiar story of a weak autumn, on the back of the warm weather, and then a strong late run.’