(Bloomberg) -- New Look Retail Group Ltd. added to the gloom among Britain's clothing retailers, reporting a full-year loss and warning of challenging times ahead as online competition increases and shoppers seek instant gratification.
The pretax loss was 16.6 million pounds ($21.5 million) for the year through March 25, the South African-controlled company said in a statement Tuesday. Sales fell 2.4 percent to 1.45 billion pounds, while the New Look brand's like-for-like revenue declined 6.6 percent.
New Look, which operates 872 stores selling fashion mainly for women and teenage girls, joins other U.K. apparel sellers such as Next Plc and Marks & Spencer Group Plc in the retail doldrums. The chain, majority owned by Brait SE, said shoppers are growing ever more trend-conscious and harder to please.
“The retail environment is now more competitive than ever,” Chief Executive Officer Anders Kristiansen said. “We have seen a growing shift in customer mindset during the year to a ‘buy now, wear now' mentality, which challenges us to be even faster in identifying and responding to trends, buying with more conviction and becoming ever more agile.”
New Look's weak results add to the woes of Brait, an investment company whose biggest shareholder is South African billionaire Christo Wiese. In March, Brait said it would not proceed with plans to move its registered office to the U.K. from Malta, citing uncertainty stemming from Britain's vote to leave the European Union.
Bonds Slide
Brait shares fell as much as 3.4 percent in morning trading in Johannesburg. The stock has slumped since the company said two weeks ago that its net asset value per share for the year through March 2017 would be down as much as 43.5 percent from a year earlier.
New Look's bonds also tumbled on the results. The company's 177 million pounds of notes due July 2023 fell 14 pence on the pound, the biggest drop on record, to an all-time low of 64 pence, according to data compiled by Bloomberg. Its 700 million pounds of bonds maturing in July 2022 declined 6 pence to 81 pence, also the lowest on record.
In addition to online retailers like Amazon.com Inc., grocers such as Lidl and J Sainsbury Plc are bolstering their apparel offerings to take on the U.K.'s specialist chains. Lidl, the German discounter, said Tuesday it's enlisted fashion model and designer Heidi Klum to develop a new clothing range.
New Look said sales rose 14 percent from its own websites and 31 percent from third-party online outlets. While about two-thirds of its stores are in the U.K., it increased its presence in China to 110 stores.
The pretax loss compared with one of 34.9 million pounds a year earlier, when figures were weighed down by one-time costs of 93.4 million pounds related to the Brait takeover and a bond refinancing. Underlying operating profit fell 44 percent to 97.6 million pounds.
--With assistance from Katie Linsell
To contact the reporter on this story: Eric Pfanner in London at epfanner1@bloomberg.net.
To contact the editors responsible for this story: Paul Jarvis at pjarvis@bloomberg.net, Thomas Mulier
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