New Look investors cut value of stake in chain

Investment group SVG Capital – an investor in New Look through buyout group Permira, which owns a 27.7 per cent stake in the retailer – revealed it has almost halved the value of its holding in the fashion group.

Full-year results from SVG Capital showed that it has cut the value of its investment in New Look by 47 per cent, to £13.5m at the end of last year from £25.7m a year earlier.

The blow comes after New Look revealed falling sales over Christmas and the January sales, with a 9.1 per cent like-for-like drop in the UK during the 15 weeks to January 2011.

Clothing retailers were hit across the board as December’s snow chaos compounded already tough consumer conditions.

SVG Capital, which invests directly in Permira funds, said that New Look had suffered from the “worsening retail environment towards the end of 2010 and the adverse weather conditions during the Christmas period”.

“A decline in like-for-like sales, a higher promotional mix and stock clearances have driven a decline in the company’s earnings and its value has been written down by £12.2m,” it added.

New Look abandoned plans to float on the stock exchange in February, blaming the u-turn on turmoil in financial markets.

It had hoped to raise £650m through the aborted listing, which would have valued the firm at around £1.7bn.

New Look was founded in 1969 by Tom Singh, and was taken private in 2004 by Permira and fellow private equity firm Apax for £700m, with Mr Singh retaining a stake.

It has suffered a spate of pulled deals in recent years, having abandoned plans to float three years ago after a lukewarm response from investors, while a £2bn sale of the business also failed when the company was unable to agree a price with potential suitors.

New Look has more than 1,000 stores, with 606 in the UK and a growing presence in Europe and internationally.

The company also operates more than 300 stores in France and Belgium, which trade under the MIM fascia.

Permira declined to comment.

New Look has over 1,000 stores worldwide, in the UK and Republic of Ireland, Europe, the Middle East, Singapore, Russia and Poland. Last year, 355 million customers visited New Look either online or in one of its stores.

The company translates the latest trends from the catwalk, celebrities and the streets as fast as it can.

The group says it is the number two womenswear and accessories retailer by value in the UK, with a six per cent market share, and is gaining market share in menswear.