- Vivian Hendriksz |
London - New Look is prepared to close up to 60 underperforming stores across the UK in order to keep it from going under, putting 980 jobs at risk, but this may not be enough to turn the struggling fashion retailer around warns analysts.
The high street retailer, owned by South-African Brait, announced its proposal for a company voluntary arrangement on Wednesday, which included up to 60 potential store closures. New Look hopes that a number of store closures, in addition to slashing rent on all its stores and a new plan to improve its overall operational performance could help turn its business around. However, Charlotte Pearce, retail analyst at GlobalData, data and analytics company believes that much more work needs to be done in order to save New Look.
"While the closure of stores will lead to market share loss in the short term, it is a long-awaited and necessary move," said Pearce. "New Look is now in danger of slipping out of the top 15 UK clothing retailers this year. The retailer’s plan to close just 10 percent of its UK store estate is not enough and New Look must continue to rationalise its remaining oversized store network given it is a huge encumbrance for the retailer." She added that a leaner store estate will improve New Look's space productivity and thereby increase the overall profit per store and help offer a more consistent brand image, "which is much needed for the retailer’s survival."
New Look was the third biggest Value Clothing retailer in the UK back in 2009 but has since fallen to sixth, and will fall further as closures impact.— Patrick O'Brien (@pat_gdretail)
Pearce noted that the addition of two flagship stores on Oxford Street as well as a select number of stand-alone menswear stores earmarked for potential closure also "indicates yet another unsuccessful strategy for the retailer." New Look first announced plans to open stand alone men's wear stores across the UK in August 2015 in the hopes of tapping into the growing men's wear market. Since then the fast-fashion retailer has opened a number of stand-alone stores, including stores in Doncaster, Kent, and Birmingham. However, consumers appetite to visit stand-alone men's stores from New Look seems not to have been as strong as anticipated, as the retailer is urged to continue to rationalise its "oversized" store network.