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Home > Retail  > Retail Weekly News Bulletin – 2nd Feb 2018


Marks & Spencer is planning to close 14 stores and cut hundreds of jobs. The six stores to close in April are Birkenhead, Bournemouth, Durham, Fforestfach in Swansea, Putney and Redditch.
A further eight stores have been earmarked for closure, including: Andover, Basildon, Bridlington, Denton outlet store, Falmouth, Fareham, Keighley and Stockport. Sacha Berendji, M&S’s retail operations director, commented:
“Stores will always be an integral part of our customer experience, alongside M&, but we have to ensure we have the right offer in the right locations.”
Mr Berendji added that M&S would “endeavour” to offer all staff affected an alternative job but added that “in some cases we may have to consider redundancy”. David Gill, national officer for the Usdaw union, said the stores closures were “devastating news” for workers at M&S shops. “This salamislicing approach to reorganising the business is extremely distressing for the staff,” he said.


January Footfall

New figures have revealed that footfall was 6.6% lower in January than a year ago as the impact of Black Friday stretched through to the January sales.
Stores in south?east England and London were the worst hit, with footfall figures down by almost 12% compared with the previous January



H&M has reported its biggest drop in profit in six years, revealing that its 2017 post?tax profits fell 13% to 16.2bn Swedish krona (£1.46bn).
Sales for the year to November 30 grew 4% to 231.8m krona. Chief executive Karl?Johan Persson said growth had been affected by
“weakness in physical stores where the changes in customer behaviour are being felt most strongly and footfall has reduced with more sales online”, while the retailer said it plans to expand online, introduce new brands, and make use of technology to minimise inventory and speed up delivery times.



Pre?tax profits at Joules rose by 22.8% to £8.3m in the six months to November 30, while group sales at the upmarket retailer rose by 18.2% to £96.2m during the same period.
The company increased its retail sales by 16.2%over the six months to the end of November, with shop sales rising by 14.2% despite complaints of lower high street footfall.
CEO Colin Porter said that the Joules brand had shrugged off the downbeat backdrop by “standing out from the rest of crowd”. He added the location of its stores in market towns and country locations appealed to families. Charlotte Pearce
of GlobalData commented: “Joules’ business model allows it to spread the risk across trading channels, enabling it to be more agile in the challenging UK retail environment.”



Former Steinhoff International chief executive Markus Jooste, who resigned after the discovery of accounting irregularities last year, has been reported by the company to South African police.
Meanwhile, South Africa’s Financial Services Board (FSB) is investigating possible cases of insider trading at Steinhoff. In a presentation to South Africa’s parliament, the FSB said it had asked for information from the Frankfurt Stock Exchange, and confirmed that it was in contact with the Johannesburg Stock Exchange.



Steinhoff International has informed the Dutch financial market regulator that it will not publish its audited 2017 consolidated financial statements by today.
The firm, which owns Poundland, said that PwC’s independent investigation was ongoing.



Steinhoff International has said it has “largely addressed” its short?term liquidity requirements.
In a bid to reassure markets after a meeting with creditors, the South African retail conglomerate said it had now received approval from its lenders to move EUR 200m of funding from its African subsidiaries to prop up its European arm.
The company this week raised 7.1bn rand ($595m) from the sale of a stake in investment firm PSG Group as part of efforts to shore up its finances.



Burger chain Byron is set to close 20 restaurants as part of a rescue plan, which has been approved by lenders and landlords.
Byron’s CEO Simon Cope said the company voluntary arrangement (CVA) meant “a number” of restaurants would close.
“We will do everything possible to redeploy staff to other sites and initiatives,” he said.
The CVA proposed that 51 Byron sites keep the same rental costs, and five will have their rents reduced by a third. A further 20 will have their rents reduced by 45% for six months while the group negotiates with landlords over the future of those sites.
KPMG, which is handling the restructuring, said no outlets would close immediately. KPMG added that employees, suppliers and business rates would continue to be paid on time and in full.



McDonald’s has revealed that its global comparable sales rose by 5.5% in the three months to December 31, beating forecasts for a 4.9% rise.
The fast?food restaurant chain reported net income in the fourth quarter of 87 cents a share, down from $1.44 a year ago. McDonald’s attributed the drop to a $700m cost associated with changes to US tax law.



B&Q has announced plans to cut 200 jobs at its head office in Chandler’s Ford, Hampshire as part of a cost?cutting drive.
The retailer said that the cuts would help to “improve efficiency and simplify ways of working”. Helena Feltham, B&Q’s human resources director, commented:
“The new structure will improve efficiency, simplify ways of working, and reflect recent changes in the market and the number of B&Q stores.” She said the company wanted to make home improvement
“accessible to everyone”. Ms Feltham added that B&Q has begun consulting with affected employees and their representative body, the National People’s Forum.



Shares in Conviviality Retail fell by 12% yesterday, after it posted a fall in half?year profits.
The drinks wholesaler and owner of the Wine Rack and Bargain Booze off?licence chains recorded a 13% drop in pre?tax profits, from £7.4m to £6.4m, during the 26 weeks to October 29th.
Revenues grew by 9.2% to £836.3m, however, with sales to the pub, restaurant and hotel trade growing by 6.9% during the period.
Retail sales were up 10%, and 2.3% on a like?for?like basis. CEO Diana Hunter said the drop in profits was due to the later than expected “phasing” of its cost?cutting efforts following a
series of acquisitions – adding that the “heavy lifting” of integrating the group’s various different systems was now complete, and reaffirming her confidence in meeting City expectations for the full



Administrator FRP Advisory has indicated that 314 jobs are at risk after high street fashion retailer East, which operates 34 stores and 15 concessions across the UK, slipped into administration for the
second time since 2015. East blamed tough trading due to shoppers reining in their spending and high street footfall plummeting for its latest administration.
The news also follows a strong Christmas trading period, in which it posted a 6.5% uplift in like?for?like sales, boosted by a 32% year?on?year increase in online sales.
Joint administrator Geoff Rowley said: “The retailer was making progress to expand its footprint, particularly looking at international opportunities; however it has been unable to secure the necessary funding to realise those plans.”


Juice Corporation

Juice Corporation, the firm behind the Joe Bloggs fashion brand, has collapsed into administration.
The group appointed insolvency practitioner CG & Co as administrator last week, and it is understood that all staff have been made redundant.
According to Robson Kay, the agent tasked with carving up and selling off Juice’s assets of £7.5m, the group turned over £13m last year.
The assets include intellectual property rights, a warehouse, offices and showrooms.



A specialist turnaround firm has been appointed by the owners of Prezzo to advise the Italian restaurant chain ahead of a potential financial restructuring.
TPG has asked consultants at Alix Partners to work with Prezzo on its “options” ? which could include closures, reports the Sunday Times.
The appointment of the restructuring adviser comes after a claim from information provider Debtwire that Prezzo is set to breach its year?end debt covenants.


Rate Reform

The Treasury Select Committee has called for an urgent review of business rates amid fears that some high street store chains are on the brink of collapse.
Debenhams, Mothercare, Moss Bros, Card Factory and Carpetright all issued profit warnings after poor trading and M&S, Next and House of Fraser said sales in their shops are declining.
MPs warned that the rates levied on retailers are causing damage to high street shops which are left at a disadvantage to online and out?of?town stores.
Argos CEO John Rogers commented: “It is no surprise the profit warnings tended to be fromthose companies that predominantly have a high street presence, because they are paying a cost to
their business that’s not borne by most of their online competition. What’s required is not just incremental changes, but a much more radical reform.”
The Treasury said it recognises “the vital contributions” that high street businesses make to the economy, adding that it had reduced future business rates by £2.3bn by changing the way rises will be set.
However, business rates specialist Altus Group warned that many retailers have faced “very large increases” in bills which “could spiral further in April”.
Meanwhile, research by EY shows retailers are feeling the effects of the spending squeeze on consumers, with a third of stock market listed firms issuing profit warnings last year.
EY said big ticket retailers were under the most pressure from the squeeze on consumer spending from stagnant wages and rising price inflation.
The firm’s Jessica Clayton warned: “We may have hit the peak of inflation, but prices still look set to run ahead of wages for most of 2018, while other cost and competitive pressures remain.”


Ann Summers

Ann Summers said turnover increased from £102m to £109m for the year to the end of June, while pre?tax profits jumped from £1m to £2.9m – the third year in a row of profit growth.


Online luxury sector

The Sunday Telegraph’s Ashley Armstrong looks at how online luxury has become the fastest growing sector in retail.
Figures show that the online luxury market accounted for just 9%, or EUR 23bn, of the total luxury market, however it is widely forecast to reach at least 25% by 2025, after growing by around 20% every year for the past three years.
By comparison, the offline luxury market grew by just 5% last year.
Ms Armstrong says that the uptick in growth has been driven by the smartphone savvy Asian consumer and that as a result luxury brands are now strengthening their online offerings.
She notes, for example, that Matches Fashion, which turned itself from a boutique to an online retailer, was sold last year for £800m despite making earnings of just £20m.
Meanwhile, Farfetch, an online marketplace for over 700 luxury fashion boutiques around the world, is gearing up for a $5bn (£3.5bn) IPO later this year, while Moda Operandi, a site where customers can preorder
looks straight from the fashion runway, is now valued at more than $330m after a $165m financing round last month.
Ms Armstrong concludes that unlike the rest of the retail sector, the luxury market seems immune to the threat posed by Amazon, highlighting a recent EU court ruling that luxury brands could block retailers, such as Amazon and eBay, from selling their products in
fear that it detracted from their image and failed to comply with their quality criteria. Because of this she says, the few online retailers that have worked to win the trust of the luxury brands can continue storming ahead without the fear of looking over their shoulder at Amazon.


John Lewis

John Lewis is to expand its personal shopping service for men into at least eight more stores following the success of the scheme at its Oxford branch.
The department store chain’s first men’s stylist was a surprise hit, accounting for a third of all personal shopping appointments since the Oxford store opened in October.
A men’s stylist will be among 23 services on offer at the £33m new store in west London, which is set to open in March.
The store will include a beauty parlour, an events room and a demonstration kitchen.


For further information on anything in this week’s bulletin please contact:


Paul Anderson

T: 0151 632 7575 | M: 07747 664077

Patrick Heaps

T: 020 3443 8504 | M: 07970 077086

Chris Chetwood

T: 0151 632 7575 | M: 077749 78846

Andrew Collier

T: 020 3443 8502 | M: 077938 08527

Tudor Williams

T: 0151 632 7575 | M: 07909 975747

Matthew Stockford

T: 020 3443 8501 | M: 07961 300261