LONDON — New Look has decided to exit its retail business in China, following a review of its international strategy.
The company said it has already been in the process of reducing its retail network in the region, and due to slow sales performance, it’s planning to shut its remaining 120 stores in China by the end of the year. Its Shanghai headquarters are set to shut shortly after.
“Having reviewed the trading performance of our business in China and the substantial investment required to continue operations in the market, we have made the difficult decision to exit our stores in China,” said Alistair McGeorge, the high-street retailer’s executive chairman. “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’s China exit comes at a time when a lot of concerns are being raised about trading in the region.
Luca Solca, head luxury analyst at Exane BNP Paribas, pointed to the “low probability of a trade deal between the U.S. and China” and the economic impact of tighter border controls on retailers and brands.
“Chinese consumer confidence seems to have plateaued. GDP growth remains solid, but global trade tensions may dampen growth in 2018,” Solca added.
Earlier this year, Topshop parted ways with its Chinese franchise partner ShangPin, dumping plans to expand across mainland China and open up to 80 stand-alone stores.