New Look 'zero profit' shows the scars from UK turmoil

New Look today laid bare just how much the business has suffered in a year of turmoil and indicated that its ill-fated plans for a stockmarket flotation are unlikely to be revitalised any time soon.

Financial results for the year to March show that while overall sales held steady at £1.46 billion, the UK arm is having a rough time. Revenues plunged by 7.1%, a result says the company of both miserable conditions on the High Street and management turbulence.

The fast fashion retailer that was founded by Tom Singh in 1969 claims "underlying operating profit" of £98 million, down from £163 million last time.

A rather different take on the company profitability is offered in the company annual report. It puts profits before tax at precisely zero.

New Look has twice tried and failed to go public in recent years, a move that would have allowed Singh, with 22.5%, and private equity houses Permira and Apax, 27.7% each, to swap their equity for cash.

Investors baulked last year at the £1.7 billion value put on the company, a reticence that was vindicated by three profit warnings in succession.

Chairman John Gildersleeve and chief executive Carl McPhail quit in March. McPhail got compensation of £800,000 for the loss of his job, it emerged today.

Alistair McGeorge, the new executive chairman, is conducting a review of the business.

"Clearly these are disappointing results, reflecting a business that was suffering internal disruption against the backdrop of a harsh and deteriorating consumer economy," he said.

Analysts have criticised the company for making its clothes, aimed at 15-30 year old women, too expensive. McGeorge, formerly of Matalan, today conceded the point. "We allowed our price architecture to drift upwards, which undermined out competitiveness and relative value positioning in the marketplace," he said.

International sales for the year edged up 0.5%,, while internet sales jumped 41% from a very low base.

Nick Bubb of Arden Partners said: "It's a good job that New Look didn't float in the spring of last year, as today's finals make grisly reading. The light at the end of the tunnel that New Look see may yet turn out to be a Primark train heading in their direction, but if they play their cards right an IPO may yet be on the cards in 18 months time."