New Look is to open more than 50 stores in China over the next 14 months as its chief executive said the fashion chain is ready to consider a stock market flotation.
Anders Kristiansen said: “We’ve demonstrated that in tough periods we continue to perform well so I think this business is ... ready.”
He said any decisions on timing of an initial public offering (IPO) would be down to New Look’s private-equity backers, Apax and Permira.
But he added that the past few months had given him confidence in the brand and its strategy despite tough trading conditions. “It’s my job to ensure that we have got the company in a perfect state for an IPO,” Kristiansen said.
New Look reported a 1.6% fall in revenues in the three months to 27 December, while underlying operating profits rose 1.8%.
Kristiansen said a December surge in sales, particularly of clothing featuring checks, helped to offset a poor performance in the previous two months. Excluding the impact of store openings and closures, sales fell by 1% despite a 33% increase in those online. Kristiansen called it a “robust performance against a challenging backdrop”.
He said sales in January were going well, partly as a result of colder weather in the UK helping to clear leftover winter clothing. While New Look is not betting that cash-strapped shoppers are likely to suddenly increase their spending on fashion, Kristiansen suggested lower fuel prices and low interest rates were helpful.
“We remain cautious but I think we have a great offer and value fashion is less dependent on the economy. In tough times and good times the New Look brand can do well,” he said.
Kristiansen had previously said New Look was not likely to consider a public listing unless it had built up a “solid business” overseas.
The fashion chain will open about 60 stores in the year ahead, with at least five more outlets planned in Poland, where it already has 11 stores. China, where the group has 18 stores, will be the main growth market and Kristiansen said the majority of this year’s planned new stores there had already been signed up.
But last year New Look pulled out of Russia, previously seen as a major area for growth, in response to the Ukraine crisis. It also sold off its cheap French fashion chain, Mim, after years of poor performance.
In the UK, New Look is not planning to increase the number of its outlets in the year ahead but it will relocate about five stores to better sites.
