New Look Refinancing Announcement and Preliminary Results 2011/2012
25 June 2012
New Look has taken steps to improve the financial position of
the Group, having agreed amendments to borrowings and an extension
of all maturities on senior debt out to April 2015. This agreement
received 100 per cent consent from New Look's syndicate of lenders.
Improving our financial position by extending the medium term
maturities will allow the company to focus on its strategic
objectives and growth initiatives. The extension will also allow
management greater time to evaluate options for the PIK tranche.
The Company will also prepay a portion of the senior, second lien
and mezzanine debt. At year end, total net debt was in line with
last year at £1.1bn.
Preliminary Results Financial Headlines
Group Sales: £1.5bn (‐2%)
- Group like‐for‐like sales (ex VAT): ‐5.9%
- UK like‐for‐like sales (ex VAT): ‐5.7%
Full Year EBITDA** £147m: (2010/11: £191m)
- H1 EBITDA £69m (2010/11: £120m)
- H2 EBITDA £78m (2010/11: £71m)
Cash: £212m (2010/11: £191.4m)
Operational and Development Overview
New Look has made good progress through the year against the
backdrop of a difficult economic environment that has hit consumer
confidence and footfall on the high street. The Group has
maintained its No.2 position in the UK womenswear clothing and
accessories value market* and the improved performance in the
second half of the year shows the impact of the actions taken under
the leadership of Alistair McGeorge, who joined the Group as
Executive Chairman in May 2011. A rigorous focus on costs and
working capital contributed to an improved cash position at year
end of £212.3m (£191.4m).
We made considerable progress in our strategy of improving
ranging, pricing and quality and broadening our appeal across our
customer base. We continued to keep tight control of inventory and
worked to improve lead times to give us greater flexibility to buy
into the key seasonal trends. Looking forward, this focus will
allow us to reduce our markdown and improve gross margin.
We have also been addressing more fundamental, structural issues
which have impacted the whole of the retail sector and mean we have
to ensure we deliver across whichever channel is most convenient to
our customers. We are, therefore, improving our multi‐channel offer
with initiatives such as "click and collect" and in‐store online
ordering.
Our online business has performed strongly, winning market share
in an increasingly competitive online market. At the same time, we
are working on our store portfolio and have concluded that the
growth of online shopping is likely to result in 50‐100 fewer
stores than we have today. However, stores will remain a vital part
of our multi‐channel offer and we have trialled a new store concept
during the year to improve the customer shopping experience.
Following some very encouraging results we are now planning to
launch a roll out across our store estate with an initial 120
stores to be refurbished in the coming financial year.
In addition, we have made significant progress internally,
making changes to strengthen the top management team, while
managing operations and costs to generate maximum efficiency and
flexibility.
Our international franchise business continued to perform
strongly, beating its budget, increasing store numbers by 54% and
entering four new major market clusters with new partners in
Indonesia, the Balkans, North Africa and South East Europe.
Outlook
Looking ahead we will continue the work already started to
improve ranging, pricing and quality, to build our online offer and
to adapt our store portfolio to the changing environment. The start
of the financial year has seen a continuation of the encouraging
trends from the second half, albeit that we, like others on the
high street, have been impacted by the abnormally wet and cold
spring weather. While we expect the economic backdrop to remain
challenging, we are confident that New Look will continue to make
progress through the year.
Alistair McGeorge, Executive Chairman,
said:
"New Look is making good progress in its turnaround, delivering
on our plan, in what remains a challenging consumer environment.
The evidence for this can clearly be seen in our performance in the
second half compared to the first.
When I joined the business a year ago we were facing significant
internal disruption, we had lost our edge in terms of our value
position and alienated some customers with our ranging. All this
meant we had undermined our competitiveness on the high street.
"We have made significant progress in addressing these issues -
work that will continue through this year. We are completely
focussed on delivering a better customer experience, whether it be
in store or online. We are also continuing our work to ensure we
have a strong brand and a distinctive proposition that generates
improved customer loyalty.
"Our long‐term goal is sustainable growth and we have taken
steps to address some of the issues with our capital structure.
Clearly there is much that remains to be done, but we are confident
that we now have the right strategy in place and are doing what is
necessary to continue to make progress through this year and
beyond. Our mission is to deliver exciting, authoritative,
appealing fashion, at the right price every time, and across
whichever channel is most convenient to our customers. This is the
key to our future success."
Enquiries
Tulchan Communications
t: +44 (0)20 7353 4200
Lucy Legh or Susanna Voyle
Notes to editors
*Kantar Worldpanel Fashion market update, 52 w/e 18 March
2012
**Earnings before interest, taxation, depreciation and
amortisation
New Look is the No. 2 value retailer for women's clothing
and accessories market in the UK and the No. 1 value retailer for
the under 35s women's clothing and accessories market, including
footwear. We have over 1,100 stores across the globe in 16
countries.
New Look Shareholders
Apax Partners
Apax Partners is one of the world's leading private equity
investment groups. It operates across the United States, Europe and
Asia and has more than 30 years of investing experience. Funds
under the advice of Apax Partners total over $40 billion around the
world. These Funds provide long‐term equity financing to build and
strengthen worldclass companies. Apax Partners Funds invest in
companies across its global sectors of Tech & Telecom, Retail
& Consumer, Media, Healthcare and Financial & Business
Services.
Permira
Permira is a European private equity firm with global reach. The
Permira funds, raised from pension funds and other institutions,
make long‐term investments in companies with the ambition of
transforming their performance and driving sustainable growth.
Founded in 1985, the firm advises funds with a total committed
capital of approximately €20 billion. The Permira funds specialise
in investing in five key sectors: Consumer, Financial Services,
Healthcare, Industrials and Technology Media Telecoms. Since 1985
the Permira funds have made nearly 200 private equity investments
with a focus on driving transformation to build better
businesses.
Tom Singh
Tom founded New Look in 1969 with a single store. As well as
running the BMD department at New Look, Tom is the Chairman of TIE
in the UK, a founder member of the Social Investment Task Force and
is active as a philanthropist.
The family's charitable activities include eye care and
education in India. The family is also a key investor and venture
partner in a UK based Cleantech Fund.