(Bloomberg) -- British fashion chain New Look Retail Group Ltd. has given up on China, saying it doesn't see a path to profits in the world's second-largest economy and will leave the market this year.
“Despite substantial investments in China in recent years, performance has been below expectations and this business has not achieved the necessary sales and profitability,” the company said in a statement Thursday morning.
New Look, owned by South African investment company Brait SE, approved a program in March to reduce its number of stores and cut its rent bill. Now it intends to close its remaining 120 stores in China by the end of 2018. It's continuing a strategic review of other international markets.
“It's the right decision to make,” Jefferies analyst Stephen Lienert wrote in a note to clients. It allows the company to focus on the U.K. market and online spending, he added, noting that the investment in China contributed most of the company's operating loss in the international division.
--With assistance from Luca Casiraghi.
To contact the reporter on this story: Tiago Ramos Alfaro in London at talfaro1@bloomberg.net
To contact the editors responsible for this story: Simon Lee at slee936@bloomberg.net, John J. Edwards III, John Lauerman
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