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Last updated: November 12, 2013 5:50 pm
New Look indicated that an initial public offering could be at least two years away as the fashion retailer announced that Alastair Miller, its long-serving finance director, would step down.
Anders Kristiansen, chief executive, said: “I just don’t think we are ready for it. I think we need to demonstrate consistency, that we can deliver quarter after quarter.”
The private equity-owned retailer, which swung from a pre-tax loss of £13.6m to a pre-tax profit of £13.8m in the 26 weeks to September 28, is poised to enter China in the spring with six stores, and has also set its sights on expansion in Russia, Poland and Germany.
“We are starting to be credible internationally,” said Mr Kristiansen. “I am sure that the company could probably go public today, but I think we just need more substance.”
However, Mr Kristiansen said Apax and Permira, who with founder Tom Singh own New Look, also supported this view. When the time was right to exit, the retailer could look at an IPO, or seek a financial partner.
“I know the market is red hot at the moment. I just think we need a lot more substance, and a lot more consistency,” he said. “If we execute on the strategy, there is a higher value.”
The comments came as sales for the first half rose 6 per cent year on year to £753.2m, while sales from UK stores open at least a year rose 1.9 per cent. Online sales rose 78.8 per cent.
The sales and profit performance – the most significant increase in profit since New Look suffered a difficult period in 2010 and 2011 – was driven by better stock control. This enabled New Look to hold only a modest sale at the end of July, while rivals were discounting heavily, so that it was able to sell summer products at full price during the August heatwave.
However, it said current trading was slow because of unseasonably warm temperatures, and a “patchy” consumer recovery.
“It’s not fantastic at the moment,” said Mr Kristiansen of current trading. “As yet, we are not seeing any benefits of economic recovery feed through to our customers’ pockets.”
New Look said Mr Miller, who has been with the group for 13 years, was leaving to build a portfolio career.
Mr Miller said the time was right to leave New Look after the management team completed a £800m refinancing in May, but before the possibility of any IPO process.
“I could not have left without having secured the future of the business,” he said.
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