British fashion group New Look will end its fiscal year 2013-2014 with an EBITDA loss of some 67.8 million euro, mainly caused by a write-off of its onerous subsidiary Mim.
Mim for sale
When it presented its financial results, British fast-fashion retailer New Look announced it wants to sell its onerous French subsidiary Mim. It bought a stake in the French ready-to-wear brand in 2000 and acquired it in 2003, but the British company has not had much pleasure from its purchase.
Mim CEO Xavier Wilmes resigned at the end of January and Xavier Dura succeeded him in April, merely a few months after new appointments were made for its product range and its styling. Their assignment was to get the brand back in touch with the 18 to 25-year old ladies who have flocked to the Primarks, H&M's and Zara's of this world in huge numbers.
Mim says it is one of the 10 largest female fashion chains in France, with some 360 boutiques in France and Belgium. According to Anders Kristiansen, New Look's CEO, "outsiders have shown an interest in the business, but there are other options as well", without revealing what it actually is.
New Look keeps growth going
If Mim is taken out of the numbers, New Look is performing well. The British fashion brand, on sale at more than 1,100 stores in 24 countries, had a 3 % sales growth to 1.53 billion pounds (some 1.88 billion euro). On a like-for-like basis, it grew 2.2 % despite "a volatile market". Underlying operational profit grew 11.3 % to 128.5 million pounds (158 million euro).
Its online sales are growing very fast, up 63.9 %, even better than the 46 % increase it experienced last year. Its update website, visited by 2.7 million people per week, and its smartphone and tablet apps have helped increase the numbers, while deals with Asos, Zalando, Zalora and other web shops have also helped. All in all, New Look is available in more than 195 countries worldwide.
According to Anders Kristiansen, New Look has a 6 % British market share, which can grow significantly through new stores and remodeled, larger existing stores. It will also focus on smaller cities, as "these ignite online sales".
New Look will open another 10 boutiques in China, which means it will double its local presence, while it also has high expectations for Poland, where it has purchased the 10 stores previously held by its local franchisee.