Why Did The CEO Of New Look Step Down?

According to the world clothing shoes and hats net, Britain's high street

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Group Ltd. finally swallowed another bitter pill for its radical expansion in China, serving the company's five year meritorious performance, CEO Kristiansen Anders, which was announced in September 1st and took effect immediately.

Instead of Anders Kristiansen, Danny Barrasso, general manager of the British / Irish company, will serve as temporary CEO until the company finds the right person.

The chairman of the company, John Gnodde, thanked Anders Kristiansen for her contribution to the company for many years, but now both sides believe that it is time to change.

Background analysis of Anders Kristiansen stepping down:

As of the 2017 fiscal year ended March 25, 2017, New Look group revenue fell 2.4% to 1 billion 454 million 700 thousand pounds, 2016 in fiscal year 1 billion 490 million 600 thousand pounds, of which New Look brand was 6.6% lower than sales, and the British market was 6.8% lower than sales.

Business income continued to rise, of which self owned electricity supplier revenue rose 14.3%, third party platform electricity supplier sales rose 30.9%.

Sluggish sales and radical investment led New Look to slump 31.8% to 155 million pounds in the fiscal year 2017, 2016 in fiscal 2016, 227 million 200 thousand in the 2016 fiscal year, 44.1% in the continuing business profits, 174 million 700 thousand from the pound to 97 million 600 thousand pounds, and a pre tax profit of 16 million 600 thousand pounds from the profit deficit.

After the annual results were announced, the New Look men's clothing director Christopher Englinde and the accessories and beauty director Amanda Wain had left the company from the company. Christopher Englinde joined in 2015 and was responsible for the group's men's expansion business. The business was sent by the group to the group to become the two important chessman of the group to try to make high valuations for IPO.

The departure of Christopher Englinde and the slow pace of expansion in Group China show that the two pieces of the group are likely to fail.

Subsequently, New Look invited Paula Dumont Lopez to join as creative director, who will join the board of directors in September.

Paula Dumont Lopez has served as the world's largest apparel retailer Inditex SA (ITX.MC) Indy Textile Group (Industria de Diseno Textil SA) for 10 years, and served as the head of the products. However, in 2013, the German Brand Company of Hongkong listed on the Hong Kong stock exchange was held as the senior vice president of the global group.

Paula Dumont Lopez is following Jos e Manuel Martinez Guti rrez rrez to go to Si Jie world. Ma Hao Si was the chief executive officer in 2012 when she joined Sijie global as chief executive officer. She served as director of distribution and operation in the Inditex SA Indo textile group.

Quarterly results released in early August showed that after the first quarter of June 24th, New Look lost 15 million 200 thousand pounds after tax and 5 million 800 thousand pounds after tax in the same period last year.

During the period, the group's revenue fell 4.4% to 338 million 700 thousand pounds, of which New Look brand fell 8.2% over sales.

The British domestic market recorded a 7.5% decrease in revenue in the first quarter, and even 0.6% decline in self operated online stores. The third party platform electricity supplier sales increased 15.7%, but the signs of slowing down were obvious.

After issuing quarterly results that disappointed the market, New Look's bond prices continued to decline. It is rumoured that Anchorage Capital and HPS Investment Partners are interested in acquiring British companies' bonds.

Reasons for Anders Kristiansen stepping down:

There is no doubt that the reason for Anders Kristiansen's downfall is related to New Look's current performance dilemmas, but the main reason leading to New Look is New Look's radical and "motive impure" Chinese expansion strategy.

New Look's latest store data also show that as a brand with no reputation in China, its rapid expansion capability is lacking. Its South African boss, Christo Wiese, claims that the crazy plan of 500 stores in China in the past three years is likely to be delayed or even stranded.

In the 2017 fiscal year, New Look has only 25 new stores in China, which is only 38% of the 2016 financial year expansion shops.

In the first quarter of fiscal year 2018, New Look added 17 stores to 127, but it was far from the expansion rate of Christo Wiese 500, the brand South African boss.

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Pu Group, Inditex SA (ITX.MC) Indo Textile Group, Hennes&Mauritz AB (HMb.ST) Hayne Maurice group, Fast Retailing fast (Group) fast marketing group four most fast fashion group's most important developing market, three of the four big groups have ranked the largest share of China's clothing market. However, the dominant position of Chinese clothing market is still occupied by the fashion group which was earlier in the Chinese market and the Chinese market as the main market. Danish retailer owns clothing brands such as JACK&JONES, NYSE:GPS, and so on. Although the scale is far from the four fast fashion group, Danish group has always been in the leading position in the Chinese market alone, because the group's 90% market is located in China. There is no doubt that China has the world's largest population and has bred the largest market for public clothing. In recent years, the Chinese market has been the Gap Inc. (NYSE:GPS) cover.

In recent years, New Look has been most reliant on the rapid expansion and expansion of China's Anders Kristiansen, the group's chief executive. He served the Bestseller bestseller group as the deputy chief executive of the group's China market.

But obviously, China's retail environment, economic environment and the way of life of Chinese consumers are quite different from those of Anders Kristiansen when they take office in China.

For the radical expansion of New Look in China, Tang Xiaotang, founder of No Agency, a fashion industry research and consulting organization, has been warning for the past year. He said that New Look had the expansion of the listing purpose, "radical, stupid and ignorant". The 20 years of the group's dominance in China were long gone, and Anders Kristiansen's Chinese experience is not enough to cope with the actual environment of the brand's current Chinese market operation.

For New Look's China expansion plan, Tang Xiaotang warned that this would be a "time bomb" for the group in the future. He said that in the mature brands of Europe and the United States, a few British brands knew the most superficial about China. "When the British brand is doing the Chinese expansion plan, they even think that they can sell the products on Tmall and charge the authorized fees to the Alibaba."

South Africa's richest Christo Wiese has revealed that its New Look China program includes basically made in China and specially designed for the Chinese market to meet the needs of local market and achieve quick response and turnover.

Sven Gaede, general manager of New Look international business, said that the advantage of the brand relative to European competitors is that 85% products are purchased for China and 1/3 for the Chinese market.

Sven Gaede Chinese consumers usually chase after the Japanese wind, so the New Look team can grasp these trends and quickly purchase in China and then sell them quickly.

However, many people in the industry have different opinions about the confidence of New Look. There are very few fast fashion brands that can be localized as quickly as Uniqlo UNIQLO and close to Chinese consumers, because the Fast Retailing Co.Ltd. XHk group, which is based in Japan, has unique natural advantages.

However, the industry does not share the same view on localization.

Hennes&Mauritz AB, director of investment at Hayne Maurice group, said that the trend of globalization is obvious. Chinese consumers and consumers in the western world, as well as consumers in other parts of the world, do not have much difference in understanding fashion and trend. Although there are regional differences, they are suitable for all markets, and H&M's business model can cope with them.

In addition, he said, as a global brand, we must maintain the global brand image and not differentiate the creativity of the Chinese market from other markets. Localization is a good thing, but it is a very difficult vision.

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