New Look has announced plans to close the 120 stores in China, exiting the country.
The fashion retailer said that due to poor profits and sales, it would no longer be investing in the country.
“Despite substantial investments in China in recent years, performance has been below expectations and this business has not achieved the necessary sales and profitability to support the significant future investment required to continue these operations,” said New Look in a statement.
The 120 stores will be closed by December. The chain will also review its other international markets in Poland, France and Belgium.
Alistair McGeorge, who is the executive chairman, “Having reviewed the trading performance of our business and the substantial investment required to continue operations in the market, we have made the difficult decision to exit our stores in China.”
“Our priority will be to support all affected staff during this time. As our turnaround plans continue, we remain focused on ensuring that New Look is well positioned to drive strong business performance and profitable growth.”
New Look is facing difficult trading conditions in the UK. The retailer secured creditors’ backing to close scores of its UK outlets earlier this year.
In June, the retailer reported a plunge in like-for-like sales by 11.7% in the financial year ending in March, and website sales fell 19%.
“Last year was undoubtedly very difficult for New Look, with a well-documented combination of external and self-inflicted issues impacting our performance,” said McGeorge.
“We still have more work to do to restore long-term profitability, but I am confident we are now better placed to achieve this than we were when I returned to the business over six months ago.”
New Look is not alone. Mothercare (LON: MTC) and Carpetright (LON: CPR) are just two names among the many other among the companies that have used CVAs in the past year.