New Look Sales In The UK In The Three Quarter Fell 4.7% Year-On-Year

High street in England

Retailer

Retail Group Ltd. complained that the local "challenging retail market" continued to crack down on its local performance, but yes.

The expansion of new categories, the boom of online sales and the growth of international business are enough to make up for the weakness of the UK. In the 2017 quarter of fiscal year three, the group's revenue grew again, and the decline in important sales and profit indicators also narrowed compared with the first half of the fiscal year.

However, the group is expected to show that the harsh business environment in the UK with high passenger traffic and competitive discounts will continue to the fourth quarter and the 2018 fiscal year. They will focus on improving business performance and diversifying development strategies to resist external aggression.

According to the data of the British Retail Association, the retail sales in the United Kingdom only increased by 1.1% during the holiday season from November to January, the slowest since 2009 and the slower growth in January to only 0.1%, mainly due to consumer restraint and expenditure after the holiday.

The three quarter of New Look Retail Group Ltd. has included the first 13 weeks as of December 24, 2016. During the same period, the same store sales in the UK dropped 4.7%, down 8.8% from the first half of the year, and the overall sales decline of the same store decreased from 8.4% in the first half to 4.6%.

According to the world clothing and shoe net, the sale of fast fashion and high street brand Topshop in the 7 weeks after the black Friday in November 2016 to the first week of the new year in 2017 has dropped by nearly 11%. The brand Arcadia Ltd. Group group has also declined by about 6.5% in the same store. The group also owns many brands such as Dorothy Perkins, Miss Selfridge, Burton, Evans, Topman, and so on.

In fact, there are many bright spots in this financial report. For example, the sales of online platforms sold by the group to 120 countries and regions in the world have increased by 18.2% year on year, and the third party e-commerce sales have increased by 73%. The two figures are much higher than the 9.5% and 21.5% of the first half of the year.

Driven by online business, the group's total revenue recorded a slight increase of 0.8%, reversing a 5% decline in the first half of the year. The total income in the three quarter was 419 million 300 thousand pounds, while the total income in the first three quarters 1 billion 140 million 700 thousand pounds was 2.9% less than that in the previous year.

New Look Retail Group Ltd. CEO Ander Kristiansen said in the earnings report that the smooth development of sales depended on the excellent performance of the international market, online channels and men's clothing, and again proved that diversification is a strategy suitable for group business.

China is an important part of this strategy. The group entered the mainland in 2014, and last year it proposed 500 stores in 3 years and more than Uniqlo.

The group revealed that the mainland business in the three quarter had a positive growth in the same store sales under the background of poor market environment, but did not give specific data. During the period, there were more landmark 100th stores in China. At present, the number of mainland stores has accounted for more than 1/3 of 276 of the total number of stores in the international market, and 591 stores in the United Kingdom as at the end of the season.

Men's independent stores also added 4 new products in the three quarter, which has increased to 19 stores.

In addition, the beauty products launched in November 2016 are also positively echoed by consumers.

Women's clothing is still the most important business of the group. In the earnings report, Kantar Worldpanel continues to quote data. It claims to be the first retailer in the UK in the first 24 weeks to December 18, 2016, under the age of 35.

However, Honor Strachan, chief analyst at GlobalData, believes that customers of New Look Retail Group Ltd. have gradually been absorbed by fashion providers.

"The power of e-commerce has weakened the attractiveness of New Look's physical stores.

ASOS PLC, ASC.L, Boohoo.com PLC (BOO.L) and Missguided, such as the platform of fashion products, attractive pricing and unique shopping experience, continue to encourage New Look's core customers to purchase online more frequently and reduce the need for shop shopping, which in turn is conducive to the growth of New Look's own e-commerce platform.

In terms of profitability, the three quarter New Look Retail Group Ltd. achieved a pre tax profit of 30 million 100 thousand pounds, a sharp decrease of 37.6% from 48 million 200 thousand a year earlier, while a pre tax deficit of 900 thousand pounds was recorded in the first half.

The adjusted core profit, EBITDA, fell 19.7% to 66 million 900 thousand pounds, or 28.6% narrower than in the first half.

As a fast fashion retailer, Ander Kristiansen is aware that fast fashion is becoming faster and faster all over the world. The social media driven consumer mentality has changed to "buy and wear".

He said that the group has improved the procurement process so as to speed up the supply chain operation, tighten up inventory control and strengthen procurement and design teams to present a stronger supply of products.

New Look Retail Group Ltd. was purchased by South African private Holdings Company Brait SE (JSE:BAT) at 780 million pounds in 2015. The paction gave it a valuation of 865 million pounds, while the Tom Singh created in 1969 still retained a minority stake.

Brait SE said last October that it plans to list in London in March this year (pferring the first market from Luxemburg to the London Stock Exchange) while maintaining its second listing in Johannesburg, South Africa.

The largest shareholder of Brait SE is Christo Wiese, a 73 year old retail giant in South Africa, which accounts for 35% of the shares, but controls the voting rights of investment companies through management and family members.

In recent years, he has been active in the M & A activities of the British retail industry. Before buying the New Look Group Ltd., he also bought a 78% stake in the Virgin group, the fitness club of Virgin Group, in Britain for 682 million pounds.

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