Later, landlords of the other stores were unsure about New Look’s business prospects and wanted the fashion brand to vacate premises so that they could relet the space. As a result, in a span of eight months, the number went up to 85 from 60. And the numbers are expected to surpass 100. In October 2018, Alistair McGeorge, executive chairman, said the company is considering shutting down 120 outlets in China.
The reasons stated for the mass shutdown are cost cuts and increased profitability. But to be fair to New Look, it has been pushed to resort to such measures because the retail environment in general hasn’t been that great in the United Kingdom, thanks to Brexit – though Brexit isn’t the only thing that has worked against UK’s retail industry. Unfortunately, the inclement UK retail environment isn’t likely to change soon.
Due to the closures, New Look is left with around 500 stores in the UK. The brand’s comparable sales fell by 3.7 percent during the 26 weeks after the stores would be closed as planned. That's technically a loss, but it isn’t that bad after all, especially when one considers that the company had an 8.6 percent slump last year, in the same period. Also, the store had operating profits of £22.2m to report for the first time in 2018. In 2017, New Look incurred an operating loss of £10.4m.
Though the company is trying its best to keep its employees on roll by shifting them to newer roles, the impact has been so significant that it couldn’t help but do away with a significant chunk of its staff. Close to 1,000 people, or even more, were shown the door.
New Look tried and is continually trying to become profitable by employing by a widened online operation and multiple full-price sales. This has helped the brand save close to £70m. Of the 60 outlets slated for shutdown, 24 have been closed. However, the company has been renegotiating rents on at least 10 stores, which should trade rent-free until at least post-Christmas.
These plans would leave the brand with 508 stores in operation. The company is doing well in areas it could control, which includes women’s clothing. However, it still requires to do better in the shoes and accessories department, and supply chain.
News in the same category
Pet lovers in Whitby will be pleased to hear that there is a new superstore now open in the town set to offer everything that their pets need.
In what will be another blow to the high street, is has been announced that Argos in the Hardshaw Centre will be closing in 2019.
If you own a recent Apple mobile device, you can now use it as a payment method in the UK. It's easy, fast and completely secure.
The proposed extension of the Royal Victoria Place shopping centre in Tunbridge Wells, which has already faced a lengthy delay in starting, may not now take place as the centre is now apparently about to be sold for a sum in the region of £100 million.
