New Look plans to sell off its ailing French division after the fashion retailer took a writedown on the business that helped trigger a £55m annual pre-tax loss for the year ending March 29.

The group made a pre-tax profit of £3.1m the year before.

French clothes retailer Mim has struggled since it became part of the group in 2004, when New Look took full control of the business having bought a majority stake in 2000. New Look said on Tuesday it had taken a charge of £64.2m to write down Mim’s net assets.

Anders Kristiansen, chief executive, said New Look would try to rid itself of the business. “We are looking at all options,” the Danish chief executive said.

Mr Kristiansen insisted that, following the writedown, there was a good business left in Mim. “We have done the cleaning up. But it is not core to our business.”

Like-for-like sales across New Look rose 2.2 per cent, as group sales hit £1.5bn for the year to March 29. The group posted a stronger performance in the UK, where like-for-like sales rose 3 per cent.

The retailer plans to expand its ranges so that they encompass better quality, more expensive products. But Mr Kristiansen said New Look will remain cheaper than mid-market rivals such as Topshop and River Island.

New Look is not in a rush to take part in the recent IPO mania that has gripped the retail sector. “I just can’t see it happening [soon],” Mr Kristiansen said, before adding: “It is a plausible route.”

New Look had to pull its float in 2010, as investors balked at the level of its debt. The fashion retailer, which is owned by private equity groups Apax and Permira, still has net debt of £1.04bn.

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