New Look Sales Rise Defies Warm WeatherTom Beardsworth
New Look Group Ltd., Britain’s second-biggest retailer of women’s budget clothing, said it’s exited Russia because of the political turmoil in the region and is pushing expansion in China.
New Look’s franchise partner, Serbian-based Delta Holdings chose to leave Russia, where the pair together had 20 stores. The nation had been earmarked last year as a market for international growth by New Look.
The purveyor of 14.99-pound ($24) party dresses is adding stores in China and selling online via Alibaba Group Holding Ltd.’s T-mall amid a sluggish market at home. Consumer confidence there will remain “fragile” in the second half, Chief Executive Officer Anders Kristiansen said on a call today, adding that unseasonably warm weather will lead to increased discounting by competitors looking to shift inventory.
The rising share of the company’s sales outside Britain “will help us to reduce our exposure to the U.K. weather in the longer term,” Kristiansen said.
U.K. same-store sales excluding e-commerce increased by 8 percent in the first quarter and 0.5 percent in the second quarter through Sept. 27, the company said. Group same-store sales gained 6.9 percent. Adjusted earnings before interest, taxes, depreciation and amortization rose 9.2 percent to 113.2 million pounds, New Look said.
The retailer was acquired by company founder Tom Singh, Permira and Apax Partners in 2004 for 669 million pounds. It postponed plans for an initial public offering in 2010, citing an unfavorable market backdrop. Since then, year-to-date European IPO activity has more than doubled, according to data compiled by PricewaterhouseCoopers LLP.
“Whenever the shareholders are ready, we will be ready,” Kristiansen said in a conference call when asked about whether the company is considering an IPO.