New Look will introduce a new store format featuring a hair salon and make-up bar at a new 24,000 sq ft flagship in the Tottenham Court Road area.
The embattled fashion retailer, which this week posted a fall in full-year profits and sales, will focus on enticing millennials with rich experiences such as a service offering personalised embroidery on jeans.
The initiative is a response to the growing trend of millennials choosing to spend on experiences over products, including clothing.
The Oxford Street store is expected to open around November. If it proves successful, the retailer will roll out the store model to other stores.
“There’s a shift towards more experience-led purchases,” New Look chief executive Anders Kristiansen told Retail Week.
“We are now looking at a new store model where customers can come and have their hair done, and get their makeup done on a Friday night.
“It’ll be more around getting their jeans embroidered with their initials on them. There’ll be lots going on that’s different [from] today. We’re looking at experiences.
“We’ll also look to create an experience online and make that more personalised and relevant.”
Kristiansen said that smaller stores could become collection points which showcase a selection of products rather than have the level of depth that they currently offer. “The world is changing and consumers today want more [experiences].”
The change in direction came as New Look reported a tough financial year, with adjusted EBITDA diving 31.8% to £155m in the 12 months to March 25.
Like-for-like sales for its core UK business slipped 6.8%. Like-for-like sales of New Look’s own-brand products plummeted 6.6%, while total sales fell 2.4% to £1.45bn.
Its ecommerce channel performed strongly, with sales through New Look’s own website jumping 14.3% and third-party ecommerce sales surging 30.9% during the year.
New Look narrowed its pre-tax losses to £16.6m following a £34.9m loss in 2016.
“The market has been extremely tough in the last 12 to 14 months,” said Kristiansen. “Also we could have [done] better, on the product side especially.”
He said that the business needed to respond quicker to the ’buy now wear now’ trend.