New Look China’s rapid roll-out pays off
UK high street fashion retailer New Look plans to open 50 new stores in China this year as its Asian foray gains momentum.
Anders Kristiansen, CEO, says New Look China witnessed a “strong reaction” to its launch.
“Since the year end, we’ve opened seven more stores already, taking us to 92 altogether in this market,” he said.
Nivindya Sharma, senior analyst at Verdict Retail, says after “a slow burn”, investments in China are finally starting to pay off with the brand reporting positive like-for-like sales growth.
“The aggressive store expansion program in China and social media engagement initiatives on Weibo and WeChat will help the brand reach new consumers, making China a lucrative market,” she said.
Globally, a focus on brand and product development, and strategic investment in menswear and eCommerce, have all contributed to top line sales growth for the value fashion retailer.
Revenues reached £1.490 billion, operating profit grew by 14 per cent to £174.7 million, while adjusted EBITDA grew by 7 per cent to £227.2 million.
“New Look has rightly focused on becoming more competent across its multichannel operations to become top of mind for its young millennial customer base,” observed Sharma.
“Order in Store now accounts for 8 per cent of online orders, and New Look’s push to build greater awareness of this option will go some way to limit customer attrition to rivals Primark and H&M. It has also capitalised effectively on its extensive store portfolio with 31 per cent of all online orders now picked up instore, driving footfall and giving New Look an opportunity to cross-sell and drive impulse purchases.”
She said healthy own brand like-for-like sales growth is testament to the strength and continuing appeal of New Look’s fashion-forward product offer, aided by the retailer’s determination to ‘right-time’ its product drops, ensuring it has the latest trends and looks in-store.
“Furthermore, store refurbishments combined with improvements to its website’s functionality and appearance ensure customers are willing to browse and shop with New Look across all channels, supporting sales densities and profitability.”