How New Look Is Achieving More by Doing Less
It’s fair to say that UK-based fashion brand New Look has had its share of struggles recently. However, you don’t get to stay in the game for as long as New Look has by quitting when the going gets tough, and the much-loved retailer is bouncing back with a fresh outlook.
New Look’s group revenue fell by 12.9 percent year on year to £523.8m in the six months to 28 September 2019, but it reduced its statutory loss before tax by £30.7m to £11.2m. Attributing the downturn to ongoing customer uncertainty – UK centric issues such as Brexit have sent reverberations through many industries based in the country – and seasonal volatility, New Look has also seen it’s adjusted EBITDA plummet 31.8 percent year on year to £42.6m, and like-for-like sales in the UK and Ireland were down by 7.4 percent.
Having promoted a new Chief Executive Officer, New Look feels it’s ready to meet this challenge head on a drive the brand forwards to a bright future and continued success.
Some brands would focus on growing their offerings in response to such a situation, but New Look has adopted a very different strategy. Focusing instead on becoming a truly omnichannel shopping experience, the brand has actually sought to reduce the volume of products it sells and instead drive customer experience as its main USP.
New Look has reduced the number of products it sells in its brick and mortar locations by around 25 percent and by 32 percent through its ecommerce presence. This reduction will give the brand room to breathe and focus on its core and broad appeal clothing – product lines the retailer has become well known for and which made up 98 percent of its autumn and winter lines. Last year, trend and fashion focused lines accounted for 75 percent of the product mix. New Look is also seeking to bring new products to market faster and reduce its average lead times to an impressive twelve days.
“The first half of this financial year has been incredibly busy for New Look as we focused on strengthening the operational foundations of the business,” said New Look’s former Chief Operating Officer, and now Chief Executive Officer, Nigel Oddy . “We have reviewed our entire product range, improved our lead times, enhanced the customer journey, revitalized the company’s values, and have begun to make the necessary changes to our leadership. As we continue to recover the broad appeal of our product, our offer is now much improved as we focus on buying into successful trends quickly.”
New Look’s fresh strategy is also allowing it to give its valued customers more choices about how they access its range of fashionable and attractive clothing by expanding into the world of digital marketplaces. Now, aside from New Look’s brick and mortar locations and proprietary ecommerce platform, customers will be able to purchase its products on eBay and through multinational clothing, footwear and home products retailer, and fellow Brit, Next’s online store.
“Alongside reviewing its product proposition, New Look is clearly making other major changes in order to explore new opportunities, which is wise and necessary in the fast-changing retail market,” said Lead Retail Analyst, Sofie Willmott. “Opening its first New Look Girl branch in [Kent-based shopping center] Bluewater stocking the 915 range and launching on both Next and eBay shows that its refreshed management team are open to new routes to market for the brand. Given Next’s strong performance online, New Look should benefit from being present on its site however it must ensure that its own website sales are not further cannibalized by offering different ranges and exclusives on each platform.”
More and more brands have been changing up their strategy and moving from large all-encompassing stores to smaller, local, and more specialized brick and mortar locations, and it’s great to see a retailer such as New Look embracing this principle. Customers today tend to gravitate more towards brands where they can get a more bespoke and personal service, and this is reflected in how many high street retailers are restructuring their physical presences.
Online marketplaces are another popular way for retail brands to connect with new audiences. Rather than trying to compete with platforms such as eBay and Amazon – something which often results in a race to the bottom from which can emerge only one winner – it’s far more productive and profitable to work with them and try to establish mutually beneficial relationships.
New Look has certainly had a rough ride, but it’s great to see such a long-standing and beloved retailer bouncing back in the way it is.
“Nigel and the team have made good, tactical progress to improve our product, speed to market and leadership capabilities, all whilst maintaining good control of our stock, cash and costs,” said New Look Chairman, Alistair McGeorge . “We are reviewing our customer strategy, and, as I have said before, investing in our leadership and people will be the single biggest enabler to transforming our business.”
The transforming role of retailers in an omnichannel world is sure to be a hot topic at eTail Europe 2020 being held in June at the Queen Elizabeth II Conference Centre, London.
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