New Look about to Quit China
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Struggling UK fashion retailer New Look is set to cull its China store network.
Weeks after signing a Company Voluntary Arrangement with its creditors and landlords in the UK – a plan which will see it close 60 stores – chairman Alistair McGeorge has cast doubt on the future of the ambitious China plans announced by former CEO Anders Kristiansen.
“We are taking a view on all our stores,” he told the Press Association in the UK. “We are taking a good hard look, and we will probably do some downsizing.”
So far, New Look has opened 148 stores across China, barely one third of its target. The stores are company owned rather than franchised as many international retailers choose to in China. It did not open any in Hong Kong or Macau.
In the year to March 24, New Look recorded a loss of £74.3 million (US$98.4 million; HK$772.6 million) after a £97.6 million profit the previous year.
Besides store closures, McGeorge is planning to reduce prices and broaden its target market from the millennials it was targeting under Kristiansen.
Questions & Answers
Q.What specifically is New Look planning to do with its stores in China?
What specifically is New Look planning to do with its stores in China?
New Look is planning to cull its China store network and will probably downsize. This comes after opening 148 stores, which is barely one-third of its initial target for the region.
Q.What was New Look's financial performance in the most recent reporting period?
What was New Look's financial performance in the most recent reporting period?
In the year to March 24, New Look recorded a loss of £74.3 million. This follows a profit of £97.6 million in the previous financial year, indicating a significant downturn.
Q.How will New Look's strategy change under Alistair McGeorge compared to the previous CEO?
How will New Look's strategy change under Alistair McGeorge compared to the previous CEO?
McGeorge plans to reduce prices and broaden the target market, moving beyond the millennials that former CEO Anders Kristiansen primarily focused on. He is also reviewing all store operations.
Q.Are the New Look stores in China run as franchises?
Are the New Look stores in China run as franchises?
No, the New Look stores in China are company-owned. This differs from many international retailers who often choose a franchised model when operating in the Chinese market.
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