We’ve been here before. With New Look battered, bruised and seemingly on the ropes, the embattled business desperately needs a saviour.
Customers have quickly fallen out of love with the fashion retailer, turning instead to high street rivals such as Primark, H&M and Zara, whose product and prices have packed more of a punch than New Look’s proposition.
And under pressure not just from its competitors but an onerous debt pile, Retail Week revealed this week that the business plans to axe around 390 in-store jobs following a consultation with 1,000 deputy store managers, sales managers and supervisors.
There was a similar turbulent tale to be told back in 2011.
New Look’s prices had swelled the wrong side of ‘competitive’, its product had become increasingly focused on the younger consumer – a move that alienated its core customer base – and its mountainous debt had some observers questioning how long it could survive.
Enter Alistair McGeorge. The former Matalan boss took the reins in May 2011 and instantly set about reconnecting New Look to its target market.
He returned the retailer to its value roots, a shift that made it less reliant on mid- or end-of-season Sales.
As a result, markdowns dropped from 33% to 26% in his first two years at the helm.
McGeorge also instilled a cost-conscious culture within the business, reinvesting any savings into price, its website, rolling out click-and-collect and revamping its stores.
Having successfully hauled New Look off the canvas and given it more than a fighting chance, McGeorge handed the baton to Anders Kristiansen.
The Dane ran with it for some time, accelerating the strategy McGeorge had put in place.
But over the past 18 months, the wheels have dramatically come off. Adjusted EBITDA slumped 31.8% to £155m in the year to March 25, as like-for-like sales in its core UK business tumbled 6.8%.
UK like-for-likes plunged an eye-watering 7.5% in the 13 weeks to June 24, and figures for its second quarter – to be unveiled in November – aren’t expected to paint a much prettier picture.
Kristiansen paid the ultimate price for its rapid decline in fortunes, exiting the business in the summer.
Although McGeorge is not formally back in the hot seat, his involvement as an ‘adviser’ has been ratcheted up a couple of notches as New Look bids to avoid throwing in the towel.
The turnaround specialist – who returned to the UK from Australian retailer Big W in controversial circumstances and took on the Tofs chairmanship a year ago – is understood to be leading trading and weekly director meetings, working closely with New Look’s UK and Ireland managing director Danny Barrasso.
New Look is right to go back to the future by once again calling on McGeorge’s expertise to help get it back in the fight.
“His no-nonsense, straight-talking approach will challenge New Look’s senior leadership team in a manner that was perhaps lacking in the latter days of Kristiansen’s tenure”
A strong and experienced leader, McGeorge will pull no punches.
His no-nonsense, straight-talking approach will challenge New Look’s senior leadership team in a manner that was perhaps lacking in the latter days of Kristiansen’s tenure.
His familiarity with the business will allow him to pull the appropriate levers on product, price, merchandising, store layouts, ecommerce and marketing to re-engage its core customer.
And his reputation for problem-solving could also help New Look tackle the daunting £1.2m debt pile hanging over its head.
McGeorge will be aware of the size of the task at hand, but it is a battle he won once before.
New Look must now live up to its name if it is to launch a similar fightback.