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New Look to float: Women's clothing firm set for pounds 60m stock market valuation

Neil Thapar
Saturday 04 June 1994 18:02 EDT
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NEW LOOK, a women's wear retailer based in Weymouth, Dorset, is planning a stock market flotation that is expected to value it at about pounds 60m.

The company, owned by Asian-born entrepreneur Tom Singh, has appointed Schroder, the merchant bank, as financial adviser. It is likely to join the market through a share placing later this year.

New Look was set up by Mr Singh eight years ago and operates about 190 stores, of which six are in France.

It aims to provide moderately priced women's clothing for most age groups, starting with girls of 11. The products are aimed at consumers in the C1 and C2 socio-economic category and its main competitors include Etam, C&A and Littlewoods.

In the past three years New Look has more than doubled its retail outlets, making it one of Britain's fastest growing retail chains in terms of branch expansion, according to Verdict, the market research firm.

The company initially concentrated on building its shop network in the South-west and Wales, but more recently it has moved into the South-east and East Anglia.

Most of its stores are small, with a trading area of 800 square feet, though some larger stores are up to 2,000 square feet. All branches boast modern layout and designs and were fitted out by an in-house team. They were equipped with electronic stock control systems about two years ago.

The company sources the bulk of its products in Britain. Average lead times from an initial order to a supplier to delivery is between four and six weeks.

It incurred a pounds 200,000 loss in the year to 31 March 1990. But taxable profits have grown from pounds 800,000 in 1991 to pounds 4m last year, on sales up from pounds 24m to pounds 54m.

Net debts amounted to about pounds 2m in 1993 - equivalent to about 27 per cent of net assets compared with 92 per cent a year earlier.

The flotation is aimed at facilitating further expansion and releasing some cash for Mr Singh, making him a multi- millionaire.

'A flotation has been under consideration for some time,' he said last week.

(Photograph omitted)

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