Fashion retailer New Look has returned to profit, recording a £3.1m pre-tax profit in the 53 weeks to March 30 against a £54.5m loss last year.
The news comes as the fashion retailer prepares to launch in China and Russia.
New Look said EBITDA surged 29% to £189m driven by a “successful” turnaround strategy and a 50% increase in online sales.
The fashion retailer unveiled group sales were up 2.5% to £1.48bn but like-for-likes slipped slightly by 0.7%. UK like-for-likes edged down by 0.5% but New Look Europe like-for-likes jumped 3.2%.
The retailer revealed it has appointed a China management team and aims to open its first Chinese store in March 2014.
New Look chief executive Anders Kristiansen said: “I applaud the achievements of the past financial year - not only the containment of costs, but also an impressive improvement in underlying profitability.
“I believe New Look is now well positioned to explore exciting development opportunities of new markets in Eastern Europe and Southeast Asia – specifically Russia and China.
“As our future expansion strategy is for depth rather than breadth, we aim to concentrate on markets where we can develop a significant presence. I am delighted to have joined New Look at such an exciting time and am looking forward to the future.”
Earlier this year, New Look successfully refinanced its debt, which now does not mature until 2018, which has improved the capital structure at the retailer and reduced its PIK debt by 50%. It has a net debt of £1.1bn.
New Look chairman Alistair McGeorge said: “I am delighted to report that our three-point turnaround plan of cost savings, margin improvement and revenue growth enabled us to deliver strong results and continue to re-invest in our business.
“The strength of our financial turnaround has also enabled us to address our capital structure, with the successful refinancing of our debt, extending maturities to 2018.
“This gives the business a five-year runway for Anders and his team to continue to improve performance, drive forward our international expansion and develop further our online and store development. Our long-term goal remains the same: to de-lever the business through profit growth and strong cashflow.”
New Look’s online business performed well as the retailer introduced click-and-collect and order-in-store. It has 2.5 million visits to the website each week and all online orders are now fulfilled by its Lymedale distribution centre.
The retailer also refurbished 145 stores with its new “Concept” format, which it plans to roll out to the remainder of the store estate in the next three years.
New Look also shortened lead times in its supply chain and it reduced markdowns and discounts by 16%. The retailer maintained and extended market share in the key categories of denim, dresses, knitwear and footwear.