New Look Strategic Review

The owners of New Look, a High Street fashion retailer, have appointed bankers to oversee a strategic review that is expected to result in a change of ownership for the company next year.

Background

New Look has appointed Rothschild to advise on a potential exit, following a number of unsolicited approaches for the business from unidentified parties. The company operates almost 340 branches and employs around 10,000 staff across the UK, making it the second-largest retailer of women’s clothing in the country for the 18-44 age group.

Current Ownership and Performance

New Look has been owned by its current shareholders, Alcentra and Brait, since October 2020. In April, investors injected £30 million into the business to support its digital transformation. Last year, the chain reported a turnover of £769 million, with an improvement in gross margins and a pre-tax loss of £21.7 million, compared to £88 million in the previous year.

Challenges and Restructuring

Like many High Street retailers, New Look experienced a difficult period during the Covid-19 pandemic and underwent a formal financial restructuring through a voluntary arrangement. In autumn 2023, the company concluded a £100 million refinancing deal with Blazehill Capital and Wells Fargo.

Current Performance and Digital Sales

A New Look spokesman stated that the company is performing well, driven by a strong summer trade and significant online market share gains. Around 40% of New Look’s sales are now generated through digital channels, with the latest data from market intelligence company Kantar showing that the company has moved into second place in the online 18-44 category, overtaking Shein and ASOS.