New Look steps back from Chinese expansion
New Look is reviewing its plans to open up to 500 stores in China as it struggles to make ends meet in the UK amid challenging times on the high street.
The British retailer’s new executive chairman Alistair McGeorge, who rejoined the brand in November, has revealed doubts about the ambitious expansion plan set in motion under former CEO Anders Kristiansen.
“We are taking a view on all our stores. We are taking a good hard look, and we will probably do some downsizing,” he told Press Association on Sunday.
Owned by South African billionaire Christo Wiese, the company already has 148 stores in China and all outlets are owned and operated directly, rather than by a franchise partner.
The Chinese expansion is just one of several goals and plans being reconsidered by the struggling retailer, which announced an operating loss of £74.3 million for the year to March 24 last week.
The brand is lowering prices and will shift its focus back to a broader range of customers, after having tried to attract a younger target audience to compete against Boohoo and Asos.
Additionally, it is pulling back on its menswear expansion by closing dedicated men’s stores as part of a CVA agreement it signed earlier this year with landlords and creditors.
60 stores are earmarked for closure under the CVA process, affecting around 1,000 jobs.
“It is progressing very well in that we have realigned the business. Without it we probably would have been out of money, and we took the landlords along with us. But in itself it doesn’t fix the business,” McGeorge said.
The executive chairman is attempting a second turnaround of the chain, which had £1.14bn of debt at the end of March 2017.
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