Fashion retailer New Look has unveiled plans to more than double its number of Chinese stores after delivering a surge in annual profits.
The chain, which recently agreed to a £780 million takeover offer, has 30 stores in China, the world’s second-largest economy, and has set itself a target of growing that figure to 70 by March next year.
“Customers have responded positively to our new ranges and we see the opportunity for significant growth in the country,” said the group’s chief executive Anders Kristiansen, a former vice-chief of Bestseller Fashion Group in China, where he helped establish more than 5,500 stores.
In the UK, where New Look has 569 stores, like-for-like sales grew 5 per cent despite tough competition on the high street.
Group revenues were 3.4 per cent higher at £1.4 billion, pushing pre-tax profits for the 12 months to 28 March up to £50.6m, compared with £20.7m the previous year.
Kristiansen said: “Our considerable high street presence has left us well placed to capitalise on the growing demand for click-and-collect, with over a quarter of online purchases now collected in-store.”
Last month buyout firms Apax and Permira agreed a deal to sell 90 per cent of the chain to Brait, an investment vehicle of the South African retial magnate Christo Wiese, putting an end to speculation that New Look would revive its plans for a listing on the London market.
Apax and Permira, which took their stakes in New Look in 2004, will also pass on about £1bn of debt.
“With the support of our new owners Brait, this is a hugely exciting time for New Look,” said Kristiansen yesterday.
Although he said that both parties were comfortable with the retailer’s levels of debt, “we are actively evaluating ways to optimise capital structure to reduce costs and extend maturities”.
When the deal with Brait is completed, the remaining 10 per cent of the business will be owned by senior management and the family of Tom Singh, who founded the chain in 1969.
Kristiansen, who became chief executive in January 2013, will remain with the company.
He said: “Whilst the high street remains as competitive as ever, we have been pleased with early summer trading, seeing positive reactions to new trends. We will continue to invest in our strategic initiatives, and we are confident that the increasing strength of the New Look brand leaves us well placed for the year ahead.”
One element of the company’s strategy is to develop its offering for men, having last year launched a menswear concept at its flagship Oxford Circus store in London.
The firm has also hired Christopher Englinde, chief operating officer for mens’ clothing at Swedish rival H&M, to become its global director of menswear.
Brait’s deal to take control of New Look came a month after the South African firm agreed to buy a majority stake in fitness chain Virgin Active from Sir Richard Branson and private equity partner CVC for £682m.