New Look Group Ltd., Britain’s second-biggest women’s budget-fashion retailer, said three international markets have the potential to overtake the U.K. in terms of importance as it expands beyond home.
Germany, Russia and China “can be as big as the U.K., or significantly bigger,” Anders Kristiansen, chief executive officer of the closely-held company, said on a conference call after New Look reported an increase in first-half earnings.
New Look, whose owners include private-equity firms Permira Advisers LLP and Apax Partners Worldwide LLP, is setting its sights on expansion after selling bonds in May to refinance net debt of 1.1 billion pounds ($1.7 billion). Poland will form a fourth prong of the chain’s international growth, the CEO said.
In China, the retailer plans to open its first store in spring and to have 20 by the end of the year, clustered around Shanghai and Beijing, Kristiansen said. It already has 21 stores in Russia, where it is seeking a joint venture partner. In Germany, New Look wants to open standalone stores to add to the 10 concessions it has in department stores.
Kristiansen drew comparisons with Hennes & Mauritz AB, saying that where H&M does well “we do well.”
Earnings before interest, taxes, depreciation and amortization rose 19 percent to 103.7 million pounds ($164.5 million) in the 26 weeks to Sept. 28 on lower levels of discounting and tighter inventory control, New Look said today.
U.K. same-store sales rose 2.6 percent, while group same-store sales gained 1.9 percent.
“In line with the rest of the sector, current trading is more challenging and as yet we are not seeing any benefits of economic recovery feed through to our customers’ pockets,” Kristiansen said.
When asked about whether the company is considering a share sale, the CEO said New Look is unlikely to consider an initial public offering in the next 12 months.
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