Fashion chain New Look has slumped deeper into the red with annual losses of more than £500 million after hefty writedowns and warned over a “challenging” start to its new year.
The retailer reported pre-tax losses of £522.2 million for the year to March 30, against losses of £190.2 million the previous year after writing off £402 million of goodwill and brand value.
Executive chairman Alistair McGeorge cautioned trading has come under pressure since the year-end as the recent wet weather takes its toll.
Speaking to the Press Association, he said: “The market is as challenging as I’ve ever seen in my lifetime in terms of consumer uncertainty, Brexit uncertainty and weather uncertainty.”
“We are not on our own saying it’s been a difficult first quarter,” he said.
But the group – which has been shutting stores under a major overhaul – saw sales falls narrow and reported an improved performance at the operating level as it posted underlying profits of £33.2 million against losses of £35.7 million the previous year.
It reported core like-for-like sales in the UK and Ireland down 1.6% against the 11.6% tumble seen the previous year.
Total group-wide annual revenues fell 3.8% to £1.2 billion as it shut stores and focused on more profitable sales.
Mr McGeorge said the group was making progress in its overhaul, but stressed there is “more work to do”.
“Whilst New Look enters the new financial year in a fundamentally healthier and stronger position, in many respects today marks the starting line,” he said.
“We have more work to do to enhance trading and deliver further operational improvements as we continue our turnaround plans.”
He added: “We expect the retail environment to remain as challenging as ever in the year ahead, with continued Brexit uncertainty and unseasonable weather impacting current trading.”
Mr McGeorge also admitted that the group’s recent woes had affected its ability to hire new talent, although he cheered the appointment on April 1 of former House of Fraser boss Nigel Oddy as chief operating officer.
Founder Tom Singh also recently announced plans to retire at the end of June.
The chain has upended its leadership team after completing £1.3 billion in debt refinancing last month as part of its turnaround plans.
It has also closed 102 stores largely as part of a Company Voluntary Arrangement (CVA) and has retrenched from overseas markets such as China and eastern Europe.
The group said it was ahead of plan with cost savings of more than £80 million and was eyeing further efficiencies in the new financial year.
It has the option on nearly another 200 stores to give 60 days’ notice of closure, but said it has “no intention” currently to shut more outlets.
The group also revealed it is considering opening some stores where it has recently closed, such as Belfast.