SHANGHAI – UK fashion chain New Look is abandoning the Chinese market as part of moves which may see it call time on its entire international presence. The company says it has already started shutting Chinese stores and will close the remaining 120 as it focuses on the domestic market. Despite substantial investments in China in recent years, performance has been below expectations and the business has not achieved the sales and profitability envisaged. However, the move still comes as a surprise given the supposed huge potential of the Chinese market due to the country’s burgeoning middle-class population.
Meanwhile, the strategic review of New Look’s other international markets is continuing. Alistair McGeorge, executive chairman, New Look, said: “Having reviewed the trading performance of our business in China and the substantial investment required to continue operations in the market, we have made the difficult decision to exit our stores in China. Our priority will be to support all affected staff during this time. As our turnaround plans continue, we remain focused on ensuring that New Look is well positioned to drive strong business performance and profitable growth.”
New Look has already appointed property agent CBRE to find new tenants for the 130 stores it occupies in China.
Earlier this year, New Look secured creditors’ backing to close scores of its UK outlets via a Company Voluntary Arrangement (CVA). This is a mechanism used by retailers to restructure financial obligations to creditors.
60 of the company’s 600 retail stores were earmarked for closure in New Look’s CVA yet many remain open.
