60 stores closures not enough to save New Look say analysts, but Irish stores safe
The 60 store closures that New Look is planning to keep it from going under may not be enough to achieve that aim, analysts said this week. The firm announced a company voluntary arrangement on Wednesday that included news of around 980 job losses.
Charlotte Pearce, Retail Analyst at GlobalData, said in response to the CVA that much more needs to be done. “The retailer’s plan to close just [around] 10% 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. A leaner store estate will improve space productivity, increase profit per store and provide a more consistent brand image, which is much needed for the retailer’s survival.”
She added that the inclusion of its two flagship stores on Oxford Street and selected standalone menswear stores in the sites identified for closure “indicates yet another unsuccessful strategy for the retailer.”
Menswear has been seen as a key growth driver for the firm in recent years with the opening of menswear standalone being touted as a way to boost market share in a part of the fashion sector that remains relatively buoyant.
Pearce added that the store closure move is long overdue: “While the closure of stores will lead to market share loss in the short term, it is a long awaited and necessary move. New Look is now in danger of slipping out of the top 15 UK clothing retailers this year.”
There was one bright spot in this week’s announcement from the company. Despite closures happening across the UK, its stores in Island appear to be safe, both in the Republic and in the North. It currently has 29 stores in the Republic of Ireland and a large number of locations in Northern Ireland, including 10 in the Belfast area.
The company’s Irish arm is run separately and sources said it remains profitable, although its profits have been falling.
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