You are here: News / Retail round up - The Sunday Papers
Retail round up - The Sunday Papers
Archived article dated Sunday December 30th 2007
Some High Street retailers 'could collapse', Big bonuses for some of the lucky ones, Jessops shortlists candidates for top job
The Sunday TelegraphInsolvency experts are on standby amid fears several high street retailers could collapse in January. Following the quarterly rent call last week many chains are already struggling.Footwear and clothing retailers have been particularly badly hit by the downturn in consumer confidence. Stead & Simpson, the 350-store shoe chain, has been put up for sale by its owners, while Dolcis, a rival chain, is in talks to get emergency financing. Faith Shoes, owned by private equity house Bridgepoint, is thought to have struggled with difficult trading for months. Other stores on the watchlist for insolvency professionals include Mark One and Ethel Austin, the clothing retailers.
Jessops has drawn up a shortlist of two candidates to become chief executive to lead a turnaround of the chain. Nigel Robertson, the outgoing chief executive of Early Learning Centre, the toy and babywear retailer, and Nick Wood, the former UK chief executive of Regus, the serviced offices company, have been approached by David Adams, Jessops' chairman, about the role. A decision will be made early next year once Jessops has made its Christmas trading statement to the stock market. Jessops has seen sales fall because of tough competition in the low-margin camera market from supermarkets and internet retailers. In September Chris Langley, the chief executive, quit after confirming that full-year losses would hit £7.5m.
Hard pressed UK consumers are turning to sub-prime lenders as traditional providers of credit tighten their lending criteria. BrightHouse, the controversial retailer that sells on weekly credit, reported an 11.5pc increase in like-for-like sales in 2007 in sharp contrast to high street rivals. Customers can "rent-to-buy" from private equity owned BrightHouse without undergoing any credit checks - but typically end up paying more than double the usual high street price for household products such as TVs, sofas and washing machines. The sales growth at BrightHouse comes amid increasing evidence that the credit crunch is spilling directly on to Britain's high street as providers of traditional consumer finance rein in the amount of "buy now, pay later" loans made available to shoppers.
The Sunday Times
Arun Sarin, chief executive of Vodafone, is poised to reap a £45m bonanza from the turnround in the company's fortunes. The size of his potential windfall - the value of shares and options in the company - has soared as Vodafone's stock has marched ahead. Vodafone shares, 188½p, have risen 33% in the past 12 months, beating by a huge margin the FTSE 100, which advanced less than 4%. Sarin could exercise share options worth £10m immediately. Depending on whether he meets performance targets, he could cash in the lot if he stays around until the summer of 2009.
A surge in post-Christmas shopping looks set to banish fears that retailers have suffered poor sales in December. And analysts predict most of Britain's large quoted retail groups will show underlying sales increases when they deliver trading statements over the next few weeks.
Industry experts now believe that suggestions in the run-up to Christmas that the peak shopping season would be a disaster for high-street outlets were wide of the mark. One industry insider said: “Every year we get the scare stories about shoppers going on strike. And every year they're proved wrong. This year will be no different.” Richard Hyman of Verdict Research, a consultancy, said: “I think we will see retail sales in value terms up by about 2.5% to 3%. That's not bad, but it's not great. Year on year, retailers' costs have gone up by about 4%. For many retailers, this Christmas has not been as bad as they thought it would be.
The Observer
It has been a tale of two high streets at Christmas. Analysts forecast that this week clothing retailer Next will report a 2 per cent fall in like-for-like store sales in the run-up to Christmas. Pali Capital's Nick Bubb said that such a fall would actually be a good performance, considering that clothing retailers were thought to be suffering the most from the effects of weaker consumer spending. At the other end of the scale, luxury retailers like Harrods appear to have shrugged off the economic gloom. In the seven weeks up to Christmas, Harrods has notched up a like-for-like sales increase of almost 10 per cent compared with last year, which was itself a record figure. Fine jewellery and luxury furniture were the most popular items.
Financial Times Sat/Sun
Publicans are crying into their beer after a summer in which bad weather, the smoking ban and a slowing economy combined to hit trade. Now it seems the very core of some of these companies is being chipped away, with pub property values also starting to cool. Focus on pub property portfolios has increased in recent years as shareholders have put pressure on companies to release value from their property assets through sale and leaseback schemes and real estate investment trusts. But, along with the rest of the property industry, pub values are slowing and pressure is subsiding.
People queued overnight outside Harrods from late on Thursday before the store's January sale opened on Friday during one of the busiest post-Christmas sales Britain has ever seen.Some 36,000 people poured through Harrods' doors between 9am and 1pm after the sale was opened by singer-songwriter Lily Allen, who arrived at the store in a horse-drawn carriage. Harrods said it took nearly £1m ($1.99m, €1.35m) an hour - beating last year's figures. The mayhem at London's most famous department store was repeated on high streets all over the country.
The Mail on Sunday
Record bonuses averaging more than £2,200 a head are expected for staff at John Lewis following a bumper Christmas that the retailer has declared its best ever. Despite a slow start to the autumn amid unseasonably warm weather, in the past seven weeks shoppers flocked to buy fashion and electrical goods at the 26-strong department store chain. That pushed sales to more than £100 million a week in the final fortnight before Christmas for the first time.
Predators in the retail sector are already circling in their hunt for easy pickings among the many floundering High Street names haunted by predictions that consumers will be forced to tighten their belts in the New Year. Retail restructuring firm Hilco is recruiting new staff to accommodate the anticipated upturn in its own business, with banks expected to force into administration chains that cannot meet quarterly rents due in March.
Nokia's N-series mobile phone handset may have been one of Christmas's objects of desire, but those lucky enough to have received one will hope they run rather more smoothly than the phone giant's plans to open its first UK store. The grand opening of a three-storey flagship on Regent Street had been timed to take advantage of the pre-Christmas shopping rush. Unfortunately, the shop is not now expected to open until an 'unspecified' date in the New Year - just as consumers start to tighten their purse strings.
Tagged as: sunday papers | round up
Share this article:
Should your colleagues be reading the Retail Bulletin?
Let them know about us.
