New Look — or New Look Retailers Limited to give it its full name — has filed its accounts for the year to the end of March with both positive and negative movements as revenue and adjusted EBITDA fell, but the gross margin rose and the statutory loss before tax narrowed.

The latest period was a 53-week one compared to 52 weeks for the previous financial year and the affordable fashion retailer said total revenue fell to £735.4 million from £816.9 million due to store closures and tough trading conditions. Had the results been prepared on a 52-week basis revenue would have fallen to £721.2 million.

UK retail sales fell to £538.5 million from £609 million, caused by the challenging trading environment. Also, during its key spring/summer trade, it was hit by unseasonable weather patterns and combined with low consumer confidence this meant customers bought less seasonal stock. But it proactively managed its position, buying a higher proportion of “broad appeal stock with longevity”, which helped it maintain its margins in the face of heavy discounting by competitors.

E-commerce sales remained strong at £217.45 million, only marginally down from the £218.97 million in the previous year. But e-commerce still experienced comparable challenges to its UK retail stores regarding customer sentiment. And sales via its third-party e-commerce partners fell to £24.18 million from £35.27 million. 

The group also re-entered Europe via a Germany-based hub, meaning European third-party sales were no longer made through the company.

The gross margin rose to 48.7% from 44.9% as the retailer pushed through “considered” price increases and a higher mix of full-price sales in the latest year.

Operating profit rose to £17.4 million (or £15.8 million on a 52-week basis) from £6 million, but adjusted EBITDA fell to £46.6 million (£45 million for the 52 weeks) from £50.5 million following the sales reduction, although it was helped by targeted cost savings. As mentioned, the statutory loss before tax was lower, at £3.65 million compared to £10.85 million the year before.

Squeezed consumers, omnichannel strength

It said that the financial year saw “no let up in the squeeze on the UK consumer” and that the clothing market was “also experiencing disruption from new fast-fashion entrants”.

Some of these were online but New Look made the most of its omnichannel model with its customers shopping across both its stores and its webstore. One example of this is that while it introduced paid returns for shoppers returning items to its distribution centre, they can continue to return items to stores without a fee.

Other omnichannel developments included all online returns now being backhauled six days a week from stores to the distribution centre where they’re processed and made available for online trading within 48 hours. As part of this implementation, it also has the ability to offer next-day click & collect at all stores.

The company successfully completed its CVA during the period saying that this provided more certainty around its store estate and it also completed its refinancing in September 2023. 

Highlights during the year saw it in number two position for overall womenswear market share in the 18 to 44 age group and it said the strength of its product offer was underlined by it maintaining top spot in market share in women’s dresses and going-out clothing (according to Kantar).

It increased its known customers who shop online, in-store and via its app by 10% to over 8.7 million and during the year its online platform served customers in 53 countries with over 246 million site visits, up from 235 million. 

Following the completion of its CVA, it ended the year with 356 stores in the UK compared to 386 in the earlier period.

And the company said that looking ahead to FY25, it was cautiously optimistic about the future. It’s investing in a number of initiatives and trials during the current year, including store renovations, loyalty, data and AI tools in order to work out which investments return the most value and support its omnichannel model.

As for the outlook, the company said that omnichannel model continues to provide it with a competitive edge as the market evolves. It believes it’s well-positioned to reap the rewards as economic conditions improve, although it’s fully aware that this may take longer than it would like. The company said it’s cautious in the face of an unpredictable trading environment but added that it’s confident in the strength and appeal of its brand.