New Look says it's slashing 80% of items to below £20 in final attempt to save fashion empire

New Look is to slash costs throughout shops in a bid to revive earnings after a 12 months of plunging gross sales.

The enterprise – which is already set to shut 60 shops this 12 months – stated it plans to scale back 80% of inventory to £20 or much less.

It comes after the style empire reported an working lack of £74.three million within the 12 months to March 24 this 12 months.

In asserting its figures, New Look teased at a drastic turnaround plan to lure consumers again in with Boohoo-type costs.

Boohoo has seen gross sales soar up to now 12 months – with earnings virtually doubling due to decrease costs

In an announcement, bosses stated it plans to supply “considerably higher worth with 80% of merchandise to retail beneath £20”.

It can additionally deal with “value-led quick style” and supply wardrobe fundamentals with a full value focus.

Chairman Alistair McGeorge stated: “Final 12 months was undoubtedly very troublesome for New Look, with a well-documented mixture of exterior and self-inflicted points impacting our efficiency.

“Since November, we’ve got centered on making the mandatory adjustments to get the corporate again on monitor and reconnect with our clients.

“Our turnaround plan is now properly underway, and we’ve got already made substantial operational enhancements to assist stabilise the enterprise, cut back our fastened price base and put us in a greater place to drive future full value gross sales.”

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Is New Look too costly?


Shopper web site, VoucherCodesPro stated the value promise has the potential to “seize consideration” from misplaced, cash-strapped consumers.

“In the present day it has been introduced that New Look needs 80% of its garments to promote for beneath £20 attributable to plunging gross sales, each on-line and in-store,” spokesman George Charles stated.

“It is positively going to seize extra consideration from potential clients and we might properly see an enchancment due to this tactic which is a rarity when information comes out {that a} enterprise is struggling.

“Not solely are they eager to make the vast majority of their items cheaper, which appeals to probably the most fundamental discount hunter in all of us, however they’re additionally widening their age demographic to 18 – 45. We hope that New Look could make this work – it’s going to be unhappy to see one other excessive road title disappear.”

Drastic motion

New Look joins a string of companies taking motion in a 12 months of disaster talks for the excessive road

New Look’s gross sales within the UK fell by 11.7% on a like-for-like foundation – whereas complete income was £1.34 billion, down from £1.45 billion 12 months on 12 months.

The enterprise stated it was hit with a £34.2 million one-off price, which included an distinctive cost from inventory clearances.

Earlier this 12 months, introduced plans to axe 60 shops and cut back lease in an extra 393 branches.

It is a part of a Firm Voluntary Association (CVA) – a process that allows companies in debt to repay debt whereas buying and selling – in an effort to stop it from closing fully.

In complete, it is estimated the choice might result in as many as 980 job losses, though New Look stated it plans to redeploy workers the place potential.

If earnings aren’t revived, New Look might observe within the footsteps of BHS and Toys “R” Us
(Picture: Getty Pictures Europe)

The record contains its flagship Oxford Avenue retailer in London.

New Look chairman Alistair McGeorge stated: “With a view to assist restore long-term profitability, it’s clear we have to cut back our fastened price base.

“Along with implementing different cost-saving initiatives, we’re already specializing in driving future full value gross sales by realigning our pricing to supply considerably higher worth, including flexibility to our purchasing mannequin, and enhancing our pace to market.”

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Excessive road closures

The poor buying and selling information comes after Home of Fraser proposed a CVA, saying it supposed to close 31 shops , placing 6,000 jobs in danger.

Mothercare and Carpetright have additionally undertaken CVAs thus far this 12 months in a bid to save lots of on prices.

Torrid buying and selling on the excessive road has triggered a swathe of retail failures, with Toys R Us, Maplin and Poundworld all getting into administration.

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