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New Look blames poor sales on weak consumer spending and bad weather | Business

New Look has blamed a steep fall in sales on weak consumer spending and mild autumn weather, which knocked demand for its winter clothing ranges.

The chief operating officer, Nigel Oddy, said the 7.4% drop in first-half like-for-like sales reflected ongoing consumer uncertainty and seasonal volatility.

Sales picked up over the summer months but fell in September due to the “unseasonably warm weather”, which also dented demand at Next and Marks & Spencer.

Oddy is working with the executive chairman, Alistair McGeorge, on a turnaround of the private equity backed business in which half year losses narrowed from £42m to £11m on sales of £524m in the six months to the end of September. McGeorge returned to the helm in 2017, having successfully led a previous revamp.

Last year New Look used a company voluntary arrangement – a form of insolvency – to close 102 stores and slash its rent bill. The turnaround team said the retailer had alienated its core customers by selling clothes that were too young and edgy

To rectify that New Look said only 2% of this year’s winter clothing range was the “trend” product that accounted for 75% of the 2018 ranges. It had also cut the size of the range by a quarter and decreased the “clothing lead times” – the time it takes from the beginning of the design process to a product reaching stores – by 12 days so it could repeat successful products.

“We have reviewed our entire product range,” Oddy said. “Our offer is now much improved as we focus on buying into successful trends quickly.”

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However, the GlobalData retail analyst Sofie Willmott said that after two years there was little evidence the turnaround was bearing fruit and suggested there was a risk New Look could lose the shoppers wanting to buy low-cost, on-trend pieces.

“New Look is at risk of going down the same road as M&S by offering a range that is too safe,” she said.

Brait, the investment vehicle controlled by the South African billionaire Christo Wiese, paid £780m for a majority stake in New Look in 2015. However, its holding was diluted as part of this year’s debt restructuring, which reduced the debt it was carrying from £1.35bn to £350m. Brait remains the biggest shareholder with an 18% stake.

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