Struggling fashion chain New Look has reported further losses in sales and revenue as the business considers a Company Voluntary Arrangement.
Its Q3 results to 23 December show overall group revenue at the business dropped 6.3% or £71.5m to £1bn, and group like-for-like sales fell 10.6%.
The company said the results were affected by a poor performance in the UK, where like-for-like sales fell by 10.7% and online sales fell by 15%.
The retailer is working with CBRE and Deloitte to decide the future of its real estate portfolio.
It is in the middle of a turnaround plan and considering a CVA, which could see it close around 60 of the near-600 UK shops in its 7m sq ft estate. A CVA would have to be approved by creditors and a decision has yet to be agreed.
Charlotte Pearce, retail analyst at GlobalData, said: “As expected, New Look’s results announced this morning leave us with little positivity for 2018 with a £71.5m drop in group revenue to £1,069.2m and another significant decline in UK like-for-like sales against a weak comparative.
“Alongside product, New Look’s store estate needs to be addressed. Its 596-strong UK store network, which has grown in the past two years despite clothing spend shifting from physical stores to online, is a huge encumbrance, and while closures will lead to market share loss in the short term, they are long awaited and necessary.
Shuttering high-rent, larger town centre stores would allow it to benefit from greater cost savings in the short term but in the longer term, its portfolio of outdated small format stores in local high street locations must also be rationalised as footfall levels continue to dwindle – making the size of its store estate more comparable to rivals H&M and Primark.”
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