New Look returns to the stockmarket
Fashion retailer New Look today ended months of speculation as it confirmed its return to the London stockmarket.
The 1,010-strong chain is aiming to raise £650 million to help it pay down its £1 billion worth of debt, after its private equity owners refinanced the business in 2008.
It says the move will provide further momentum to its expansion plans as its affordable clothing ranges continue to strike a chord with budget-conscious shoppers.
New Look had a turnover of £1.3 billion last year and has enjoyed sales growth of 11% a year over the last five years compared with 1.5% growth in the overall market.
After the initial public offering (IPO) it will have net debts of around £450 million.
New Look, which currently operates in 13 countries, says it is now looking to expand its international presence further with new markets including Ukraine on the radar. In the past year it made its debut in Holland, Egypt, Singapore and Poland.
The group was taken private in a £699 million deal by founder Tom Singh and private equity firms Apax and Permira in 2004. Its new owners pumped more than £450 million into growing the group.
However, it was forced to abandon its efforts to float in 2007 when the credit crunch kicked in while a £2 billion sale of the business also failed when the company was unable to agree a price with potential suitors.
Carl McPhail, New Look's chief executive officer, says: "We are delighted that the significant transformation of New Look over recent years has positioned us as a leading UK fast fashion value retailer.
"Today's [2 February 2010] announcement is the latest exciting stage in our development and we look forward to growing our business, both in the UK and internationally."
The IPO, which is forecast to be completed by mid-March, is one of several expected this year with Travelport and Merlin, the leisure group behind Madame Tussauds and the London Eye, also planning to list in London.
An Initial Public Offering is the US equivalent of flotation, and is the first sale of equity in a private company in the form of shares (know as stocks in the US) to the public in order to raise capital to finance growth.
A property chain is a line of buyers and sellers (the “links”) who are all simultaneously involved in linked property transactions. When one transaction falls through – for instance, someone can’t get a mortgage or simply withdraws their property from sale, the entire chain breaks and all the transactions are held up or even fail entirely.