Sales bonanza fails to halt retail sector jitters

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POST-Christmas shopping has produced a boom for the beleaguered retail sector but experts yesterday warned it may not be enough to ensure some weaker players survive.

Retail analysts Experian said 21.5 per cent more people visited shops on Boxing Day than a year ago as stores made unprecedented discounts to drum up trade.

More people were expected out yesterday, as chains that were not open on Boxing Day, such as department store John Lewis, opened and began their sales.

But fears persist that some big high street names could collapse in coming days.

The sector has suffered a bleak year in which the squeeze in consumer spending was compounded by the rise in VAT to 20 per cent and the warm autumn weather, which hit sales of winter clothing.

As a result, retailers have put on a frenzy of promotions in the run-up to Christmas and many are now dropping prices further.

Industry insiders say that despite reports of encouraging recent trading, some big-name players may not make it through the next few weeks, with many now due to pay their rent bills for the next quarter.

Anita Manan, an analyst at Experian, said: “It’s good to see so many people visiting stores and the milder weather has helped. With the quarterly rent due, the difficulty is that they are selling a lot of stock at very low prices.

“What remains to be seen is if this quarter’s takings are enough to see them through this difficult period to the next quarter.”

High street lingerie chain La Senza, which has 146 stores and 18 concessions in the UK, announced last week that it plans to enter administration in coming days.

And Blacks Leisure, which owns 98 Blacks outlets and 208 Millets stores, has fuelled speculation that it would go into administration in a move that would allow rivals to cherry-pick its best assets.

The outdoor clothing group, which employs 3,600 staff, put itself up for sale following dire trading. But it signalled a so-called pre-pack deal was on the cards as it said it did not expect an offer for the group’s shares, only for its trade, assets and brands.