Yahoo News New Look to close remaining 120 stores in China and pull out of country
New Look has confirmed plans to close its remaining 120 stores in China after deciding its below-par sales and profits did not justify continued investment in the country.
The announcement came hours after the move was first reported by Sky News and means the stores will close by the end of the year, with New Look's Shanghai head office shutting shortly afterwards.
New Look is continuing to review its other international markets in France, Belgium and Poland - at a time when it has been fighting to turn around the fortunes of its stores at home.
The fashion chain said it has been gradually reducing the number of its stores in China and now intends to close the remaining 120 by the end of December.
It said: "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."
Executive chairman Alistair McGeorge said: "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."
The announcement by South African-owned New Look comes seven months after it secured creditors' backing to close scores of its UK outlets.
Most of the 60 stores earmarked for closure under the Company Voluntary Arrangement (CVA) have yet to be shut, meaning it still has nearly 600 high street outlets across the UK.
New Look's overseas operations lost more than £37m in the year to March, compounding its troubles in its home market.
It is not the only British fashion chain to retreat from China, with Sir Philip Green's Topshop saying in August that it was terminating a franchise agreement with Shangpin, a local partner, "by mutual agreement".
New Look's performance has stuttered during the last two years, with former boss Mr McGeorge returning as its executive chairman last November.
He described the retail environment as "challenging", and said improving its fortunes would not be an overnight job.
The company has been owned since 2015 by Brait, an investment vehicle headed by businessman Christo Wiese, who also has interests in Virgin Active and the Iceland supermarket chain.