New Look's earnings rise as recovery plan pays off
British value fashion retailer New Look posted a 25 percent rise in underlying first half earnings as it removed costs and improved margins as part of a recovery plan following a slump in earnings in 2011-12.
The firm, owned by private equity groups Apax, Permira and founder Tom Singh, also said on Tuesday its current sales performance is now showing year-on-year growth.
A spokeswoman for New Look said the firm hoped to refinance its net debt of 1.05 billion pounds ($1.67 billion) within the next 18 months.
The firm reported earnings before interest, tax, depreciation and amortisation (EBITDA) of 86.9 million pounds in the 26 weeks to Sept. 22, up from 69.4 million pounds in the same period last year.
Group sales from over 1,100 stores in 16 countries fell 1.7 percent to 710.5 million pounds, with sales at UK stores open over a year, excluding VAT sales tax, down 3.1 pct.
However, New Look said it saw “significant” gross margin improvement, reflecting less markdowns and fewer discount sales.
British retailers are mostly struggling as consumers hold back spending in the face of job insecurity, rising prices, subdued wages growth and government austerity measures.
“The next stage of our recovery should see sales growth return based on the product improvements being made and the better presentation of product in store,” said Chairman Alistair McGeorge.
In the first half New Look extended some senior debt maturities to April 2015 and repaid 73.8 million pounds of debt.