New Look same-store sales slump as restructure continues
Same-store sales fell by 10.1 per cent in the first quarter for UK-headquartered fashion retailer New Look.
For the 13 weeks to June 29, the company says it was affected by bad weather which led to lower footfall in stores, compounded by consumer uncertainty surrounding the Brexit crisis.
Combined UK and Ireland retail sales fell by £35.5 million (14.1 per cent) to £210.3 million for the quarter.
Pippa Stephens, a retail analyst at GlobalData, says the retailer is continuing to struggle as it progresses with its transformation process, which includes closing stores, axing menswear from physical locations and attempting to revive the broad appeal of its products.
She said that with falling like-for-like sales in its core business, the company must continue to focus on improving its remaining stores to boost footfall.
“With like-for-like sales rising 2.2 per cent for the first eight weeks of the second quarter, New Look is starting to show signs of green shoots. While its ‘Revive’ programme for refurbishing its smaller destinations will help to attract shoppers, it should also improve its visual merchandising by displaying products more clearly to enhance the shopping experience, as its stores often feel cluttered – making them difficult to browse,” said Stephens.
While consumers are shifting to shopping online, New Look’s e-commerce sales have continued to decline, with group sales (excluding third-party e-commerce) falling £1.3 million to £38.1 million.
“Although its digital channel outperformed versus total sales, New Look must drive more traffic onto its site through increased digital marketing, and by offering more affordable and convenient delivery options,” said Stephens.
“Although the high prices of its fulfilment options will make its online channel more profitable, uncompetitive prices are off putting for shoppers, hindering conversion. Its delivery-saver scheme is priced at £19.99, double that of other value players like PrettyLittleThing and Boohoo.com, so this should be lowered to become more competitive.”