...Aggressive Financial Profile: New Look Retail Group Ltd's IDR is constrained by its high financial leverage (funds from operations (FFO) gross leverage at around 7.0x), although this is mitigated by a structural improvement in the FFO fixed charge cover ratio (to more than 1.5x) as it optimises its debt mix. Fitch Ratings views these debt protection ratios as in line with a `B-' rating compared with Fitch's highly speculative-grade European general/non-food retailers. Broadening Brand Reach: Following the acquisition of New Look by Brait S.E., Fitch does not expect near-term changes to the group's underlying strategy, characterised by broadening and diversifying the brand's appeal and reach. International Expansion Focus Narrowed: Fitch considers geographic diversification as rating-positive as it reduces reliance on the UK consumer. However, we highlight some execution risks in establishing the brand abroad. Online Focus: Online presence and multi-channel integration are becoming key differentiating...
