British High Street Brand New Look Enters Jingdong

High street in England

New Look enters the second largest e-commerce platform in China on Tuesday

The brand has been stationed in China for two years.

At the same time, it opened an online flagship store in Tmall.com Tmall, which currently operates 96 stores in China.

However, for the new New Look, which has entered the Chinese market, its performance in the Chinese market is quite general. In the 2016 fiscal year, New Look has a 8.8% increase in the same store sales, although it has greatly improved compared with the 2015 fiscal year, but this data also shows that the brand lacks a strong appeal in the Chinese market. Besides, New Look's marketing activities in the Chinese market are also extremely rare. New Look, which wants to win extremely picky Chinese consumers and the fiercely competitive Chinese market, still needs more time, though the group claims to have 290 thousand fans in micro-blog and WeChat.

In addition, the investment cost of New Look Group Ltd. expansion in China is also one of the important reasons for the group's record of after tax losses.

As of the 2016 fiscal year of March 26, 2016, New Look Group Ltd. gross profit recorded a profit of 784 million 900 thousand pounds, up 5.2% from the 745 million 800 thousand in fiscal 2015, and increased from 14% to 2015 in the 2015 fiscal year. After adjustment, the EBITDA growth rate was 7% to 227 million 200 thousand pounds, the fiscal year was 7% pounds, the adjusted pre tax profit rose to the pound, the fiscal year was a pound sterling, the profit after tax was recorded at the pound sterling deficit, and the profit after last year was recorded. The loss was mainly caused by the paction cost of the pound sterling, which included the acquisition of South African private Holdings Company Brait SE (JSE:BAT) and the cost of financing.

Despite its general performance in the Chinese market, New Look CEO Anders Kristiansen said China is still the most important market for the group's expansion strategy, and plans to add another 50 to 135 in the fiscal year.

Anders Kristiansen has served the Vero Moda and Jack & Jones JACK&JONES parent company Bestseller Fashion Group bestseller group as the deputy chief executive officer of the group's China market, and the increasing number of new stores of New Look may help the British brand to open up in China. However, it is obvious that the current retail environment, economic environment and the way of life of Chinese consumers are different from those of China when they are inaugurated in China.

Over the past six months, many international fast fashion groups have seen a slowdown in growth in the Chinese market. Compared with H&M, Zara, Uniqlo, even Gap, such as fast fashion and cheap fashion brands such as Gap, the Old Navy and Old Navy, New Look has no advantages and no He Xianming characteristics, so its prospects in the Chinese market are still doubtful.

For investors of New Look Group Ltd., it is also worth noting that once the proportion of the Chinese market is too heavy, its counteraction will be greater. At present, many luxury goods groups are deeply suffering.

And New Look's rival and partner PLC ASOS (ASC.L) has been unable to invest millions of pounds a year and quit China.

If New Look fails to compete with Zara and H&M in the international market of Europe, the biggest market of the latter brand is the German market. Then New Look will also find it difficult to compete with other brands entering the Chinese market early in China, because in the Chinese market, there are no fast fashion brands in Europe and the United States, and Uniqlo UNIQLO in neighbouring Japan and a stronger lifestyle brand Muji, Muji.

New Look Group Ltd. basically launched the Holland and German markets, closing all 13 stores in the Holland market during the period. Although the group claims that Germany is still its core international market, the group closed 2016 of the 23 German stores in the 2016 financial year, leaving only two.

The number of direct outlets in the Chinese market has exceeded the total number of direct outlets in its international market (except the UK / Ireland). Its number of outlets in the international market is 142, while China occupies 85 of them.

According to group expansion strategy, the number of Chinese stores will increase to 20% in fiscal year 2017.

However, for the New Look Group Ltd., which has been listed for the two time, the huge expansion in the Chinese market and the formation of a certain scale may help to boost its market value.

At the beginning of 2015, New Look Group Ltd. was passed on to invites investment bank to prepare IPO, but in Brait SE acquisition, group pformation strategy, first international expansion and then listed.

Judging from the current situation, the Chinese market and men's clothing business is obviously the two wings of New Look Group Ltd. ready for listing, but the group has been cautious expansion of the men's clothing business, which has been known for its good performance (6 in fiscal year 2016).