New Look CEO on managing business growth

For most fashion businesses, the goal is to grow – not only to drive revenues and profits but to attract new talent, fund investments, and compete for market share. But achieving and managing that growth can prove difficult.

New Look has experienced extraordinary growth since it launched in 1969 with a single UK store. The men’s, women’s and kidswear omnichannel retailer is now a leading fast-fashion brand and a stalwart of the high street, with 452 stores across the UK and Ireland. Earlier this year, it opened a 20,000 sq ft store in Liverpool – its biggest retail space to date.

Its online operations are also expanding: New Look’s website served customers in 66 countries, with over 225 million visits, in the 2021 financial year.

New Look Liverpool One

New Look CEO Nigel Oddy says the key focus now for the retailer in terms of future growth is blending its online and offline channels.

He tells Drapers: “We used the [Covid-19 pandemic] lockdowns over the past year to assess our business strategy, and we were absolutely clear that our future strategy revolves around being truly omnichannel, and being truly omnichannel is having an estate of stores and a very good online business – and the centre of that channel is our app. If we have the app at the centre of our business, you can order online, go in stores, order in stores, and that becomes a truly omnichannel operation.”

He says “local” stores will also continue to play a big part in this omnichannel strategy for future growth: “Our strength is having that ‘localness’ – having stores within 15 minutes of our target customer. One thing we have seen that has changed over the last 18 months is more people working from home, and the local market becoming more important. Stores are fundamental to our strategy, but they’ve got to sit alongside and complement the growing online business as well, and the app can help us to do that. We believe in the high street and bricks and mortar, as that is where our business started.”

Tony Mannix, CEO of Clipper Logistics, agrees that an omnichannel experience is vital for large retailers: “The high street is not dead. I think retailers who are there and pushing on are doing a great job. The ones who fell at the wayside probably had other reasons and factors that affected them, but online and offline need to blend together.”

Mannix points retailers to Clipper’s Clicklink service, which combines the convenience of click-and-collect with streamlined returns management, as one way of optimising this omnichannel approach. “If we can encourage more and more people to do things like click-and-collect, you create footfall on the high street that benefits independent [retailers], coffee shops, and everyone else.”

In the 13 weeks to 26 June 2021, revenues at New Look were up 181.7% year on year to £194.4m. This was driven by its own ecommerce sales, which were up 3.8% against the first quarter of 2020/21, and by 43.3% on the first quarter of 2019/20.

However, with a growing online business comes the issue of returns.  “Because the percentage of sales at New Look has increased online, so have the returns,” Oddy says. “So, we have had to adapt our processes.”

He explains: “We [like other retailers] have also had the additional challenge of processing European returns outside the UK. What we have had to do is set up a returns processing unit in our store in Wexford in the Republic of Ireland, and that processes all our European returns, to save them coming back into the UK.

“We have also said to store staff, ‘as you get online returns coming back to your stores, don’t send them back to the distribution centre – it just clogs it up. Instead, put them out on a last-chance-to-buy rack.’ And in some of our smaller stores, which perhaps did not have a lot of these items in their catalogue previously, it is a great opportunity for stores in local environments to sell product that has been returned that they would have not seen before. And we are seeing some really good levels of sales from that.”

Another common reason for returns is sizing issues. This is an area New Look has focused on to try to decrease the return rates.

Oddy says: “We have spent a lot of time on fit. We have looked at all our products, not just an average size 12 or 14, but we have gone from an 8 to an 18. We have made our tops slightly longer, jeans a slightly better fit, and we are hoping we will see return levels dropping. We have taken a long time to try to get consistency across our products.”

Meanwhile, Oddy says that, as the business’s online operations continue to grow, the retailer has encountered the issue of finding digital talent to fill new roles.

“Our challenge is if someone wants to go into retail… [fashion] used to be a great industry to go into with great opportunities to go up the ladder. We need to get the next generation excited again. Too much is made of the demise of retail and the high street.”

He adds: “There are some amazing opportunities – the growth of online – whether it be marketing or apps. It is not just about traditional retail. It is about the other stuff behind it. As an industry, we have to get out there and shout more about it.”

New Look has grown exponentially over the past few decades. But, as Oddy points out, growth does not come without challenges. A clear omnichannel strategy, getting the basics right and nurturing talent remain the keys to success.