New Look to quit Chinese market as 130 stores face the axe
The fashion chain New Look is to call time on its international presence by abandoning its entire Chinese operation as it tries to improve the fortunes of its domestic business.
Sky News has learnt that New Look will announce this week that it has appointed the property agent CBRE to find new tenants for many of the 130 stores it occupies in the world’s most populous nation.
The move will mark a retreat from the South African-owned chain’s ambitions of building a vast Chinese shopping empire and will come seven months after New Look secured creditors’ backing to close scores of its UK outlets.
Sources said the retreat from China could be announced as soon as Thursday.
The company is already understood to have shut 20 stores there, with an exit from France, Belgium and Poland – its other international markets – also now on the agenda.
New Look’s overseas operations lost more than £37m in the year to March, compounding its troubles in its home market.
Alistair McGeorge, the retailer’s chairman, had signalled that a retrenchment from China was likely, although the announcement of a full-scale closure of its business there may surprise retail analysts given the rapid growth of the country’s middle classes.
It is not the only British fashion chain to retreat from China, with Sir Philip Green’s Topshop saying in August that it was terminating a franchise agreement with Shangpin, a local partner, “by mutual agreement”.
New Look secured approval in March for a Company Voluntary Arrangement (CVA), a mechanism used by myriad retailers and restaurant chains this year to restructure financial obligations to creditors.