Brait plans exit from New Look amid UK fashion struggles
INVESTMENT
Investment holding group Brait is actively exploring exit options for its stake in UK fashion retailer New Look.
Image: Bloomberg
Investment holding group Brait is actively exploring exit options for its stake in UK fashion retailer New Look, it said on Wednesday, as the underperforming asset continues to weigh on its portfolio amid a broader strategic reshaping following its 2024 recapitalisation.
New Look, once a significant pillar in Brait’s investment lineup, now comprises just 3% of its total assets, down from 7% a year earlier. The decline reflects continued weak trading in the UK’s embattled fashion retail sector, which has been plagued by consumer caution, price discounting, and shifting demand patterns.
Sales at New Look fell by 4% year-on-year while gross profit declined by 3%, according to Brait’s year-end results for the period ended March 31, 2025. A capital injection of £30 million (R730m) was recently announced in an attempt to support the retailer’s transition to a more digitally focused model.
“To offset regulatory inflation and align with a more digitally focused model, the company initiated a significant restructuring across the business,” Brait said in its results . "Exit options for the business are being explored, while the transition from offline to online channels continues to progress."
Brait’s equity holding in New Look is also set to fall sharply. Once the recapitalisation is finalised, Brait’s diluted equity stake will decline to 8% from 17.2%, further diminishing its exposure to the brand. The investment’s unrealised carrying value dropped to R485 million at the end of March 2025, nearly halving from R982m a year earlier.
Despite the drag from New Look, Brait reported a modest improvement in its net asset value (NAV) - Brait's key reporting metric - buoyed by better performances from core holdings such as Virgin Active and Premier, as well as progress on its balance sheet restructuring.
Brait’s NAV per share rose 6% to R3.06 on a like-for-like basis compared to March 2024, following the completion of a broad recapitalisation package in August last year. That included a R1.5 billion rights offer, partial repayments and maturity extensions of its convertible and exchangeable bonds, and the extension of its revolving credit facility.
The company reported a R1.378bn reduction in debt over the period, aided by bond buybacks and improved operational cash flow from its investments. Post year-end, Brait further reduced its liabilities with a £10m repurchase of convertible bonds in April 2025, bringing post-balance sheet available liquidity to R838m.
From an IFRS perspective, Brait posted diluted earnings and headline earnings per share of 5 cents, a turnaround from a 13-cent loss per share in the prior year.
Virgin Active
Virgin Active, which accounts for 62% of Brait’s portfolio, continued to recover strongly, posting a 13% increase in revenue to £212.5m and a 45% rise in year-to-date Ebitda to £35.8m. During the reporting period Brait made significant investment in the existing estate and new clubs and club refurbishments to drive higher membership engagement and yields.
Premier Foods, the group’s fast moving consumer goods arm, grew revenue up by 7% at R19.9 billion, while Ebitda rose 15% to R2.4bn. Brait said investment has continued across key operating units with annual capex of R726m mostly on bakery upgrades.
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