EUR 203.58 For Business Accounts Only

New Look 2Q17/18 - EBITDA keeps falling; still decent liquidity but debt restructuring looming

UK value-fashion retailer New Look has sunk deeper with its 2Q17/18 results (ended 23 September), the worst since margins began to collapse five quarters ago. A new management team was brought in and will implement a strategic shift aimed at returning to New Look’s basics. It is led by New Look’s former boss Alistair McGeorge, appointed as executive chairman (following the departure of CEO Anders Kristiansen in September), who successfully led the turnaround of the business over 2011/14.  New Look’s founder Tom Singh is also taking an executive role alongside the chief product officer (he used to be a non-executive director). During the call, management spoke of the major reasons for underperformance, mentioning the wrong customer messaging, which became too young and overly fashionable without highlighting value; the focus on e-commerce sales at the expense of profitability; lost flexibility and speed in spotting changing trends; previous season stock not cleared quickly enough; and weaknesses in cost controls.