New Look boss Anders Kristiansen said China still holds strong growth potential despite the country’s turbulent economy.

The fashion retailer, owned by Christo Wiese’s investment vehicle Brait, has opened 83 stores in China since moving into the market at the beginning of last year.

It plans to launch a further 50 stores in China over the next financial year.

Speaking after unveiling a 38.9% jump in pre-tax profits to £87.9m during New Look’s third quarter, Kristiansen rebuffed suggestions that the retailer had made a mistake in entering China during a period of economic instability.

“We wouldn’t open 50 stores if we thought we had made a mistake”

Anders Kristiansen

“We wouldn’t open 50 stores if we thought we had made a mistake,” he said. “Capital costs are a third of what they are to open a store in UK. For 85 stores we made an investment of £8.5m. It’s not a major investment as such.

“There is clearly a slowdown but we still see very strong like-for-likes coming out of China. Whenever there is a downturn people turn to value and we are value fashion.”

Keeping apace with H&M

Kristiansen insisted that New Look’s ambitions in China match those of its biggest fast fashion rival H&M.

“I think our outlook is pretty similar,” he said. “H&M probably has 350 stores and we are typically in the malls where they are.

“It continues to open aggressively in China and so will we. We build a business for the next five, 10, 15 years. We don’t focus on the short term.

“We are very much committed to China. In those five, 10, 15 years we will have about 500 to 1,000 stores and a very strong online presence. We will have a true multichannel experience, as we do in the UK.”

Kristiansen’s stance came off the back of strong trading results for New Look’s third quarter. As well as advancing profits, sales grew 5.6% to £1.17bn and UK like-for-likes increased 4.3%. During the Christmas season, New Look delivered a 3.2% rise in sales during the seven weeks to January 2.

New Look Menswear Wigan

New Look Menswear Wigan

New Look Men, Wigan

Standalone menswear store expansion

The retailer, acquired by Brait last June, is in the process of rolling out its standalone New Look Men stores in the UK. It has opened four so far and plans to launch another 15 to 20 within the next year, as Kristiansen looks to take advantage of what he sees as a lack of competition in that category. 

“I don’t know any menswear brands doing what we’re doing,” he said. “We have fashion and basic products at an exceptional price, really good quality, and we have a store environment that is premium and masculine.”

Menswear makes up about 20% of New Look brand sales made through third parties such as Asos, but just 3% of sales made via its own channels.

Total third-party sales increased by a third during the quarter and Kristiansen revealed that 60% of its Asos sales and 95% of Zolando sales were to international customers. 

“Brexit does not worry us. It is not key for our brand, our business or our customers”

Anders Kristiansen

Although its overseas business is going strong, Kristiansen was unconcerned by the UK’s potential exit from the European Union.

He said: “Brexit does not worry us. It is not key for our brand, our business or our customers. It is not something that is top of their mind.”