Embattled New Look Retail Group reported losses for FY2019 of £522.2m, diving further into the red after losses in FY18 of £190.2m. The company said the losses were mainly driven by goodwill and brand impairment charges relating to its restructuring.
At the same time, the group detailed in its annual report progress on investigating the accounting irregularities that came to light in February. These irregularities related to the trade creditor control account.
New Look says: “We immediately conducted an in depth investigation. This included engaging external advisors to support us in carrying out a thorough review into trade creditors, related areas of the financial statements and associated accounting practices, which is now concluded. Through this investigation it was identified that a number of improper journals were posted to the creditor control account over a number of years dating back as far as the period ended 30 March 2013 by a former employee.”
As a result of the investigation, the FY18 opening accumulated loss reserves are restated to reflect a £6.1 million correction, trade and other receivables have been restated to reflect a £0.4 million decrease and trade and other payables have been restated to reflect a £5.7 million increase. The review concluded that no cash or assets were misappropriated and no customer, operator or supplier was impacted or disadvantaged.
An evaluation of the firm’s current controls framework surrounding financial reporting remains ongoing with further enhancements to be implemented throughout FY20.