Fashion retailer New Look clocks 2% dip in FY'11 sales

New Look has taken steps to improve the financial position of the Group, having agreed amendments to borrowings and an extension of all maturities on senior debt out to April 2015.  This agreement received 100 per cent consent from New Look’s syndicate of lenders. Improving our financial position by extending the medium term maturities will allow the company to focus on its strategic objectives and growth initiatives.

The extension will also allow management greater time to evaluate options for the PIK tranche. The Company will also prepay a portion of the senior, second lien and mezzanine debt. At year end, total net debt was in line with last year at £1.1bn.

Preliminary Results Financial Headlines

• Group Sales:  £1.5bn (-2%)
• Group like-for-like sales (ex VAT): -5.9%
• UK like-for-like sales (ex VAT): -5.7%
• Full Year EBITDA** £147m: (2010/11: £191m)
• H1 EBITDA £69m (2010/11: £120m)
• H2 EBITDA £78m (2010/11: £71m)
• Cash: £212m (2010/11: £191.4m)

Operational and Development Overview

New Look has made good progress through the year against the backdrop of a difficult economic environment that has hit consumer confidence and footfall on the high street.

The Group has maintained its No.2 position in the UK womenswear clothing and accessories value market and the improved performance in the second half of the year shows the impact of the actions taken under the leadership of Alistair McGeorge, who joined the Group as Executive Chairman in May 2011.

A rigorous focus on costs and working capital contributed to an improved cash position at year end of £212.3m (£191.4m).

We made considerable progress in our strategy of improving ranging, pricing and quality and broadening our appeal across our customer base. We continued to keep tight control of inventory and worked to improve lead times to give us greater flexibility to buy into the key seasonal trends. Looking forward, this focus will allow us to reduce our markdown and improve gross margin.

We have also been addressing more fundamental, structural issues which have impacted the whole of the retail sector and mean we have to ensure we deliver across whichever channel is most convenient to our customers.

We are, therefore, improving our multi-channel offer with initiatives such as “click and collect” and in-store online ordering. Our online business has performed strongly, winning market share in an increasingly competitive online market.  At the same time, we are working on our store portfolio and have concluded that the growth of online shopping is likely to result in 50-100 fewer stores than we have today.

However, stores will remain a vital part of our multi-channel offer and we have trialled a new store concept during the year to improve the customer shopping experience.  Following some very encouraging results we are now planning to launch a roll out across our store estate with an initial 120 stores to be refurbished in the coming financial year.