Retailing:The fast-fashion chain operates 21 stores in this state but wants that figure to rise to 35 within the next three to five years, writes Gretchen Friemann

New Look, the UK fashion chain, is pursuing a fast-paced expansion plan in the Republic after its Irish outlets posted a bumper profit of €17.7 million at the end of last year.

The retailer operates 21 stores throughout the state but it wants to increase that figure to 35 within the next three to five years. The company already has seven new locations in the pipeline, including a 2,787sq m (30,000sq ft) outlet in the third phase of the Dundrum Town Centre where it will be paying an annual rent of over €1 million.

New Look, which earlier this month launched a celebrity fashion line designed by pop star Lily Allen, is investing €39 million in its Irish venture but the company claims each shop recoups its openings costs of €1.1 million within 12 to 18 months.

Sales in the fast-fashion sector are among the strongest in the industry and New Look has become one of the market heavyweights in recent years, unveiling new stores at a dizzying rate.

According to the chain's head of acquisitions, Amanda Herron, 79 outlets were opened last year and the company is on track to add a further 55 by the end of 2007.

She describes Ireland as an "important market" in New Look's burgeoning global business and says that, while 35 stores is the current target, "there may be scope" for greater expansion in the future.

Property sources claim that the UK brand's large-scale spatial requirements - the company's favoured store size is in the region of 2,787sq m (30,000sq ft) - and the pace of its growth, makes it one of the most aggressive players in the retail sector at the moment.

However, when New Look launched its Irish business in September 2003 with the opening of its Dún Laoghaire outlet, few landlords or developers would deal with the brand.

Herron claims that some of the state's top shopping centres refused to negotiate with the company because the chain was "unheard of" in the Republic. As a result, New Look opened in smaller towns that are usually completely off the map for big-name retailers.

Although Herron points out that the company's strategy has traditionally been to build the brand's strength through an extensive regional roll-out, she says New Look was snapping up space in locations that "even Argos had turned down".

But these relatively small town stores, such as the chain's outlet in Clonmel, are among the company's best performing shops because the "low overheads help generate a higher profit margin".

Not that New Look is staying clear of the prime positions. Herron readily admits that the company should have tried harder "in retrospect" to win the former Habitat outlet on St Stephen's Green, where Topshop's parent Arcadia forked out €3 million in key money.

However, she maintains that when you "look at the nuts and bolts" of some of the recent deals on Grafton Street, the state's most expensive shopping thoroughfare, "it's difficult to see how they make sense from a business perspective".

She says one of Grafton Street's main problems is "that most of the space is small and piecemeal" and points out that Henry Street's larger unit sizes and its "dramatically improved" appearance make it a more attractive destination for New Look.

But Herron stresses there is "no pressure" to open stores in more expensive locations. "Our brand awareness has grown significantly over the past few years and we are very happy with our performance in the Republic."

In addition to New Look's scheduled store in the Dundrum Town Centre extension, the high street chain is in negotiations for space in Mullingar, Sligo, Castlebar, Athlone, and Arklow. There are also plans to significantly increase the company's floorspace at the Dún Laoghaire shopping centre.

New Look operates over 300 stores in the UK, Europe and the Middle-East.

The chain is likely to be sold within the next few weeks for around €2.9 billion after a recent auction for the business attracted bids from three major private equity players: Texas Pacific Group; Warburg Pincus; and Landmark, the group's franchise partners in the Middle-East.

New Look was acquired three years ago by private equity firms, Apax Partners and Permira for €1 billion and earlier this year the investors appointed Merrill Lynch to advise on an exit strategy.