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Retail round up  - The Tuesday papers

BRC dashes UK retail recovery hopes,Spotlight and downlighter bulbs next to be banned by EU,Poor payout for Land of Leather creditors,Whitbread enjoys a caffeine boost from Costa Coffee,Discount chain Primark's success sweetens AB Foods,T-Mobile UK set to announce merger with Orange,Fears grow for retailers after August sales fall, Aquascutum to return to British ownership, Tesco lays groundwork for California growth...


Retail round up - The Tuesday papers

The Daily Telegraph
Hopes of a recovery on the high street are premature, according to the British Retail Consortium (BRC) as it reported a 01pc drop in sales in August after they grew in June and July.The fall in like-for-like sales – which strip out the effect of additional shop floor space – was compared with the same month last year and was driven by a decline in clothing, footwear and home accessories according to the latest BRC/KPMG retail sales monitor. Sales were partly hit by the wet weather, the report said. Total retail sales rose by 2.2pc, after growing 3.6pc in July."The stronger figures of June and July haven't been sustained. The deceptively good sales growth of those months was due to summer sun and price cuts – not any major revival in how customers are feeling. What spending we now have is all about value and essentials," said Stephen Robertson, director-general of the BRC. Full article here.

Millions more traditional light bulbs are to be banned by the European Union, forcing consumers to buy less popular "green" alternatives instead.Traditional spotlights and some kinds of halogen downlighters used in kitchens and bathrooms are expected to fall foul of the regulations being drawn up by the European Commission.The new ban, due to come in next year, is being pushed through despite an increasingly bitter consumer backlash against existing rules which outlaw the selling of "non-directional" incandescent light bulbs of the kind used in living rooms and bedrooms. Full article here.

Creditors to Land of Leather, the furniture retailer that fell into administration in January this year, are set to receive just 9p for every £1 they are owed by the company.Unsecured creditors, who are owed more than £37m, will be paid a dividend of up to 9pc, according to administrators Deloitte, the accountancy firm.However, the administrator warned that the final level of unsecured claims could ultimately be materially impacted by litigation brought against Land of Leather in relation to alleged toxic chemicals in sofas supplied in 2007. The failed company is the subject of a class-action suit brought by consumers who allegedly suffered burns from the sofas. The sofas were supplied by a Chinese manufacturer, Linkwise, which it is claimed had inserted sachets of a chemical into the sofas' lining to prevent mould growing during shipping. Full article here.

Business travellers are opting for budget hotels and Britons have kept buying coffee through the downturn, helping Premier Inn and Costa Coffee-owner Whitbread through the recession.In an upbeat trading statement, the company said total sales rose by 2.4pc in the first half, with like-for-like sales – which strip out the effect of new hotels and cafes – slipping by just 2.6pc.Whitbread said total sales at Premier Inn, which contributes three-quarters of its profits, were flat in the first half. Full article here.

Primark's owner, Associated British Foods , on Monday raised the group's full-year earnings guidance, boosted by accelerated growth at the clothing chain and recovery in its sugar business. The shares jumped 32 to 844p as analysts notched up earnings forecasts.AB Foods said it now expected "some progress in adjusted earnings" for the year, up from previous guidance of flat income, lifted by expected like-for-like sales growth at Primark of 7pc. Full article here.

The Independent
T-Mobile UK could unveil a merger with Orange as early as today, in a move that would create the largest mobile phone operator in the country.The three biggest players in the UK – O2, Vodafone and Orange – have been in talks with T-Mobile's parent company, Deutsche Telekom, for the past two months.O2 and Vodafone are understood to have been interested in tabling outright bids for the underperforming unit, which analysts valued at between £3bn and £6bn in June.Orange, however, has maintained that it does not want to buy its rival, but was interested in a potential merger. Renι Obermann, the chief executive of Deutsche Telekom, has made it increasingly clear it favours the proposal by the France Telecom-owned company. Full article here.

Retail sales slipped back in August after two months of robust growth, sparking fears over the strength of a recovery in consumer spending. Underlying retail sales fell by a worse than expected 0.1 per cent last month, after a rise of 1.8 per cent in July and 1.4 per cent in June, the British Retail Consortium-KPMG Sales Retail Monitor revealed. Total sales rose by 2.2 per cent in August, but this was lower than the 3.6 per cent growth in July.The decline in sales will worry retailers facing the crucial final quarter of the year – which they rely heavily upon for their annual profits – as UK plc strives to drag itself out of recession. Consumer spending accounts for 65 per cent of gross domestic product. Full article here.

The Financial Times
Aquascutum is set to return to British ownership after Harold Tillman, the UK fashion entrepreneur, bought the 158-year-old retailer and luxury clothing brand from a Japanese apparel company.Tokyo-based Renown said on Tuesday it has agreed to sell Aquascutum to Broadwick Group, 72 per cent controlled by Mr Tillman, for an undisclosed sum.YGM Trading, the Hong Kong clothier that distributes the label in China and south-east Asia, has acquired brand rights in Asia for £13.7m. Full article here.

Tesco is continuing to invest in the future growth of its US Fresh & Easy stores, in spite of the UK supermarket group saying earlier this year that it had put the second stage of its US expansion in northern California “on hold”.The retailer has opened 125 of its small format, hard-discount stores in southern California, Las Vegas and Phoenix over the past two years, seeking to woo customers with a focus on its low-cost private-label foods and prepared meals.In April it said it was slowing the pace of store openings in its existing areas and that it would delay its move into northern California, originally planned for this year, because of the economy. It did not give a new date for the expansion.Full article here.

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