New Look reported a rare off quarter yesterday, as profits and sales slid amid Brexit nerves, miserable June weather and tough comparables.

The value fast-fashion retailer has historically published market-beating figures, and is looked to as an example of how to do bricks-and-clicks fast fashion successfully.

It is worth stressing that this was a tough a quarter for all fashion retailers – the period covered the 13 weeks to June 25, including the run-up to the referendum when consumer confidence was low and one of the wettest Junes on record. Not exactly the national mood of choice for retailers.

These results must be caveated with two facts – New Look has historically performed well and this is one quarter of bad figures. It would be premature to pronounce it a trend.

And New Look’s results follow one week after industry bellwether and normally fellow robust performer Next also revealed subdued trading figures, posting a dip of 0.7% in retail sales.

But not every retailer has had such a tough time.

Boohoo upped its full-year guidance yesterday, following a good performance during the first five months of its year.

“A key difference between Boohoo and New Look comes down to the Boohoo’s international customer base”

The etailer said: “The start to August has been encouraging. Demand has been robust and sales momentum in the first quarter has continued into the second quarter. Sell through of seasonal stock has been strong through the spring and summer season.”

Boohoo caters to much the same customer as New Look. Both customer bases are skewed towards the younger shopper – 60% of Boohoo’s customer fit into the youthful 16-to-24 bracket – but both have their fair share of older customers too.

Boohoo

Boohoo

60% of Boohoo’s customer fit into the youthful 16-to-24 bracket

Both retailers’ shoppers are value hunters and the pair’s price points are broadly comparable too. 

So why is there such a yawning gap in performance? A lot of it could come down to the fact that online retailers are run quite differently to their bricks-and-clicks rivals.

Slick and international operation

Etailers run intrinsically more nimble operations. Boohoo’s headquarters, for instance, features screens in every office, updating management every 15 minutes on which products are flying off the website’s virtual shelves fastest.

But it’s not all complex operations and flat screens on every wall.

“A key difference between Boohoo and New Look comes down to the Boohoo’s international customer base”

A key difference between Boohoo and New Look comes down to the Boohoo’s international customer base – a common factor among etailers.

One third of Boohoo’s sales are international, with much of that coming from its target markets of France, Ireland, Australia and the US.

It’s a position that New Look aspires to be in four to five years’ time. Its international sales account for just 12% to 13% of its revenues. The bigger the international customer base, the more retailers can beat unseasonable weather at home – shorts might not sell in Manchester but will be picked up instead in Miami.

However, putting the trading gap between the two retailers down to online versus bricks and mortar would be simplistic.

Transitional fashion

Boohoo is also adept at transitional pieces. Transitional has been a buzzword since the most recent wave of unseasonable British weather hit this year, as retailers such as Debenhams, M&S, Bonmarché and John Lewiscotton on to its advantages.

And New Look boss Anders Kristiansen is changing its strategy on this next year.

“Like a number of retailers we go too summery too early on, when the summer just isn’t there”

Anders Kristiansen, New Look

“I don’t like talking about the weather,” he said yesterday. “But we as a business need to be better at transitional products and I think, like a number of retailers we go too summery too early on, when the summer just isn’t there.

“We will have more transitional pieces next year. We can’t impact the weather but no matter what results we have it’s my responsibility to make sure we have a more diversified business.”

New Look’s poor figures do not yet constitute a downward trend. The proof of the pudding will be in how it trades in the next quarter.