Old look for New Look as Tom Singh returns

The struggling retailer has parted company with chief exec Carl McPhail, with founder Tom Singh re-taking the reins instead...

by James Taylor
Last Updated: 19 Aug 2013
Could this be a new dawn for New Look? After a rotten 18 months, the ailing fashion retailer has announced that both chief exec Carl McPhail and chairman John Gildersleeve are leaving with immediate effect - to be replaced, at least for the time being, by founder Tom Singh. Singh wil be hoping he can do a Steve Jobs and restore his baby to its former glory. But with like-for-like sales down almost 10% at last count, he's got an awfully big job on his hands...

Singh has more than an emotional tie to New Look; he still holds 22% of the shares. So along with private equity owners Apax and Permira, the private equity firms who own 55% between them, he'll have been looking on in horror at the chain's recent performance. It's issued three profit warnings in the last 18 months, pulled a proposed IPO in February last year (citing market conditions, although the City seemed more worried about its £1bn debt burden), and in January reported that like-for-likes slumped 9.1% in the 15 weeks to January 8. So you can see why the owners thought it was time for a change.

New Look's operating in a very competitive segment, of course; even the all-conquering Primark has seen sales and margins squeezed lately, thanks to a slowdown in consumer spending and a rise in cotton prices. But it still seems to be underperforming the market. And some of its problems have been of its own making; a relocation from its original base in Weymouth to London backfired when a third of its staff refused to move, leaving it without lots of experienced buying staff. So its subsequent issues with stock (it's admitted to going 'too young') aren't entirely surprising.

Singh apparently isn't planning to stick around forever: the idea is that he'll act as interim executive chairman while the retailer conducts a proper search for new leadership. But in the meantime, we're sure he'll be excited by the challenge of reviving the chain he founded way back in 1969 in Weymouth. Step one, we presume, will be trying to find a way to differentiate New Look in a very crowded marketplace...

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