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Retail Update - October 2018 |
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Posted At: 22 October 2018 14:21 PM
Related Categories: Retailer At Risk, Store Closures |
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Continuing the pattern of the year, the retail world is still a bit gloomy.
The high street continues to suffer retail losses; both Orla Kiely and Aspire Style closed their stores and website and Mountain Warehouse took the decision to close its Zakti standalone store format, choosing to rebrand them as it reshuffles its estate. The last week alone has seen Coast fall into administration with the closure of 24 stores and the rest of the business being acquired by Karen Millen. American Golf also entered administration but was immediately bought by private equity investor Endless. Many other retailers teeter on the edge, not helped by a 2.4% increase in inflation which will add an additional £186.45m to retailer’s business rates bill next April.
However, as autumn sets in, there is some better news to be had;
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Social media platform Pinterest has introduced new shopping pins linking directly to product pages on retailer’s sites. Testing has already shown a 40% monthly increase in clicks to retailers
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London’s Bond Street has just completed a £60m makeover ahead of the Elizabeth Line opening. The transformation includes a £10m investment into a new streetscape for the area, together with a further £50m being invested into ten new store openings
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Westfield in Shepherd’s Bush has been dubbed the UK’s best-performing shopping centre in a new report by GlobalData, scoring 4.09 out of five, with Westfield Stratford City coming in second place at 3.98 out of five
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Westminster City Council has unveiled fresh plans to future-proof the Oxford Circus area. The council plans to set aside £150m for the new Place Strategy and Delivery Plan, which aims to provide major improvements across the shopping district, including Oxford Circus, Marble Arch and Cavendish Square
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The Coffer Peach Tracker reveals that managed pub sales continued to outshine restaurants after a bumper summer for drinks-based operations. Pub like-for-like sales picked with 1.9% growth in September as wet offerings continued from the momentum of the summer’s heatwave
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Research by Savills has found that the number of international retail and leisure brands opening their debut UK outposts in London is increasing. To date, 36 new entrants have launched in London since 2018 began, exceeding the full-year total of 32 in 2017. The 2018 total could tally around 45, potentially heralding a 40% increase year-on-year and bringing it closer to the 2016 peak of 53
And finally, new research has shown that contactless payments in UK shops are now more popular than chip and Pin card payments. Payments technology company Worldpay said it was the first time it has seen “tap and go” contactless payments overtake Chip and Pin. The switch-over happened in June, when 51% of in-store card transactions in that month were contactless.
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Retail Update - October 2016 |
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Posted At: 20 October 2016 16:45 PM
Related Categories: Administrations, Retail, Retailer At Risk, Retailers |
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Since our last update, bakery and catering company Peyton and Byrne has gone into administration following the loss of contracts at London’s Kew Gardens and the British Library. The bakery business has been sold as a separate entity to Peyton and Byrne Bakeries Limited, a new business owned by the Peyton family, and its five existing public catering contracts have been sold as part of a pre-packaged sale to foodservice company Sodexo.
As seen in August, September has painted an equally rosy picture on the high street:
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Data from IMRG Capgemini’s eRetail Sales Index shows that September’s online performance topped off a strong quarter, with the Index recording the highest quarterly growth at 17% since the first quarter of 2014
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According to the latest Coffer Peach Business Tracker, consumer spending on eating and drinking out continues to hold up post-Brexit, with managed pub and restaurant groups reporting collective like-for-like sales up 1.8% in September against the same month last year, with those outside the M25 reporting bigger increases than those in the capital
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Consumer confidence rebounded to pre-Brexit levels in September, with GfK’s long-running Consumer Confidence Index increasing by six points this month to -1 (30/09)
In other news from the high street:
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The UK stationery market is set to rise by 2.4% to around £2.1 billion by 2021 according to research from Verdict Retail
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Consumer confidence rebounded to pre-Brexit levels in September, with GfK’s long-running Consumer Confidence Index increasing by six points this month to -1
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The post-Brexit crash in the value of the pound means that the UK is now the cheapest market in the world for luxury goods according to research from Deloitte
And finally, Mintel predicts UK Christmas sales will rise 2.5% to £42.2bn this year but this depends on retailers’ approach to the all-important Black Friday. It will be interesting to see the strategies surrounding what has become one of the most important festive shopping dates on the calendar, something we at SnapShop, will keep you up-to-date with.
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Retail Update - May 2016 |
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Posted At: 19 May 2016 17:13 PM
Related Categories: Administrations, Retail, Retailer At Risk, Retailers |
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Since our last update, when BHS and Austin Reed Group had negotiated CVAs, both have now succumbed to administration. Although both have attracted a lot of interest, no announcement has yet been made regarding the future of these iconic brands.
Consumer confidence has also taken a bit of a knock since our last update, falling back into negative territory, as consumers show concern regarding Brexit and the wider Eurozone crisis. It will be interesting to see if this figure remains stable as we approach the EU referendum.
With the recently released Android Pay in the UK, data from the UK Cards Association has revealed that monthly contactless spending in the UK has reached a record high. A whopping £1.508bn was spent through contactless payments in March. This figure, despite security concerns surrounding contactless, looks destined to rise as the choice of options continues to grow for consumers.
As online continues to grow, footfall continues to decline, down 2.4% in April , following a 2.7% decline in the previous month. High streets saw the biggest decline with footfall down 4.7%, while shopping centre footfall edged down 0.7%. Retail parks, however, saw an uplift of 1.1%.
Interesting data from the Publishers Association was released in April that revealed sales of print books are rising for the first time in four years, while eBook sales were down for the first time since the e-reader hit the shelves. Total sales of book and journal publishing were up to £4.4bn in 2015.
In the same way, according to the latest figures from Kantar Worldpanel for the 12 weeks to 10 April 2016, physical stores are taking customers back from e-retailers in the physical entertainment sector. The figures found that high street and grocery stores accounted for 69.8% of sales, compared to 67.5% the previous year.
These are both significant to the retail industry as the battle for online against physical retailing heats up, and demonstrate that although online is clearly an important strategic market for retailers, consumers still want (and need) that ability to physically be able to enter a shop and feel and see the product in their hands before buying.
You can keep up to date with the latest consumer trends and shopping habits here on SnapShop.
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Retail Update - December 2014 |
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Posted At: 18 December 2014 15:12 PM
Related Categories: Administrations, Retailer At Risk, Retailers |
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With Christmas fast approaching, it is pleasing to note that other than Mexx – which had very little UK presence left following financial troubles in 2008 and has now been declared bankrupt – no administrations have been recorded on the FSP Retailer Database since the demise of Phones 4U in September. However, Austin Reed teeters on the brink, having appointed Deloitte to work on a strategic review of the business after it made a £1.29m loss in the year to January 2014. Owner Darius Capital Partners is thought to be in discussions with the auditor over a company voluntary arrangement.
Confidence has certainly showed a marked improvement since Christmas 2013, with research by IGD forecasting that spending on Christmas food and drink will increase by 1.2% this year to £20bn. The study also stated that £1bn will be spent via online; that £1.5bn will be spent via discounters, and that only three out of 10 consumers are planning on doing a traditional ‘big Christmas shop’.
Supermarket price wars have continued to intensify over the course of the year, with Aldi and Lidl making record market share gains as the traditional ‘big four’ grocers battle to keep afloat and attract consumers.
November saw the fastest month-on-month growth in online sales in the 14-year history of the IMRG Capgemini e-Retail Sales Index, rising by 37%. Year-on-year, online sales increased by 20% to mark the biggest growth rate in 2014 so far. The figures show that in the year-to-date online retail sales are up 15% and following a strong start to December with Cyber Monday, this figure is expected to reach 16% at the end of the year. Overall, an estimated £12.1 billion was spent online in November, with an average basket value, excluding travel, of £78, attributed in the main to this year’s Black Friday sales success – sales were up 44% in the week commencing 23 November alone, compared with the previous week.
Staying with the online growth trend, the numbers of click-and-collect orders are forecast to surge by 49% over this year’s Christmas period according to Barclays research, representing a rise of 5.7 million consumers.
In other news, Hereford's multi-million pound retail complex - The Old Market - has been crowned as the UK's best new shopping centre at the BCSC Gold Awards, London is to see more than 10m square feet of retail space in new developments with new shopping centre sites including Croydon, Battersea and Earls Court and extensions at Westfield London and Brent Cross malls helping to accelerate the supply of new stores, according to the latest Colliers Central London Retail Health Check report.
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Retail Spotlight: Phones 4 U |
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Posted At: 22 September 2014 00:24 AM
Related Categories: Administrations, Retailer At Risk, Retailers |
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Founded in 1987 by the Caudwell Group, Phones 4 U was the UK's fastest growing independent mobile phone retailer with more than 690 stores across the UK and Northern Ireland, and an online shopping facility. On 26 September 2006, the business was sold for a sum of £1.46 billion to private equity firms Providence Equity Partners and Doughty Hanson, before later being sold on again to BC Partners in 2011.
It was announced last week that Phones 4 U is the latest high street name to succumb to administration. Looking more closely, it seems that while the major mobile phone retailer was still a profitable business, with turnover of £1bn and underlying profits of £105m last year, losing key contracts with EE and Vodafone meant that the company could no longer operate.
So, this is an unusual retail administration situation. We’ve taken a look back at the trading history of Phones 4 U, to see how the brand evolved.
On 17th September 2014 - it was reported that Dixons Carphone offered to hire the 800 people who work in Phones 4 U concessions at its Currys and PC World stores after Phones 4U went into administration two days beforehand.
15th September 2014 - Phones 4 U fell into administration after loosing their key contract with EE, soon after losing Vodafone, announcing plans to close its 550 stores
8th September2014 - Phones 4 U owner BC Partners started exploring new options for the retailer following Vodafone’s decision to not renew its contract with the firm.
4th September 2014 - The ratings agency, Moody’s, warned clients that the mobile phone retailer was under review for a downgrade, because of its debts and the loss of the Vodafone deal.
2nd September 2014 - Phones 4 U revealed that network operator Vodafone would not be renewing its contract agreement, leaving them with only one mobile network partner - EE.
19th August 2014 - Phones 4 U announced it would be looking for over 100 new stores as it prepared to close its concessions in Currys, following the merger of Currys’ owner Dixons with Carphone Warehouse.
18th July 2014 - Phones 4U launched an ad campaign entitled ‘For the future you’, developed by adam+eveDDB. The campaign was designed to highlight the knowledge that Phones 4u can provide to customers in-store; helping customers choose a phone that suits them.
22nd January 2014 - Phones 4 U owner, BC Partners, started looking at options for Phones 4 U, including a float.
31st July 2013 - The Manchester Arena was renamed the Phones 4 U Arena after the brand agreed a five-year sponsorship deal.
22nd January 2013 - Phones 4 U launched a mobile network business called LIFE Mobile later in 2013 that used the 4G services being rolled out by EE across the UK under a wholesale arrangement.
12th November 2012 - Phones 4 U appointed Johnson Fellows to handle its UK store portfolio, consisting of more than 650 outlets.
8th October 2012 - Phones 4U recorded a rise in pre-tax profits from £87.6m in 2010 to £113.4m in the year to December 31, 2011. Sales rose from £746.2m in 2010 to £773.3m in 2011 driven by sales of high value smartphones.
This is not a typical retailer’s slide into administration, as we have seen in other cases such as with La Senza and Internacionale. Instead, what we’ve seen with Phones 4 U is how vulnerable many of our retailers still are, whether it is obvious or hidden beneath an apparently successful exterior. Until this year, Phones 4 U showed all the signs of a business coping with the competition and challenges of the current high street and in particular within the mobile phone sector. With a significant store portfolio, strong online offering, a concession deal with Currys and the launch of a new mobile network business – the signs were positive.
However, the loss of three significant deals in 2014 undermined that success with huge impact. Currys owner, Dixons’, merger with Carphone Warehouse in August saw Phones 4 U facing the end of their in-store concession deal with Currys; Vodaphone decided to not to renew their contract agreement at the beginning of September; and two weeks later 4G network operator EE followed suit, leaving Phones 4 U alone, and stuck. This goes to show how fine the line is between success and failure for our retailers, even as the economy continues to recover and our high streets to stabilise. Phones 4 U chief executive David Kassler summed it up: "A good company making profits of over £100m, employing thousands of decent people has been forced into administration."
The lesson to learn here is one of strategy and future proofing. As a facilitating business, Phones 4 U relied on their partnerships and without these they didn’t have a viable proposition. Even the most seemingly successful brands need a contingency plan.
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Who's next? |
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Posted At: 27 July 2012 16:36 PM
Related Categories: Retailer At Risk, Retailers, Social Commentary |
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JJB Sports…
Based on FSP’s multi–layered approach* to identify retailers at risk, which includes early signs like key staff changes, management re-shuffles and departures, to medium term dangers like decreasing market share/profits and store closures and re-enforcing that with financial information like gross profit and cash flow in its simplest form provide the navigation tools for a business.
While the rival Sports Direct has continued to make progress, these warnings are clear and have been around for some time:
• £24.7m loan from Bank of Scotland,
• fall in revenue from on-going retail operations for the 52 weeks to 29 January 2012 by £78.7m (21.7%) compared to the previous accounting period as a result of store closures
• like-for-like decrease of 13.1%
• rapidly falling P2 score indicating Very Worrying financial health
And now, the news that chief executive Keith Jones is stepping down with immediate effect is the latest in a chronicle of incidents (read woes!).
Over several years JJB has had three fundraisings and avoided administration twice. We wonder if the new chairman, US retail veteran Robert Corliss, has a turnaround strategy?
Key
P2>175 – Very Strong
P2 >150 and <175 - Healthy
P2>125 and <150 – Fairly Healthy
P2>100 and <125 – Head Above Water
P2<100 – Very Worrying
*As the performance of any business varies because of its size and sector, the FSP Retailer Risk prediction methodology can only be used as a rough guide to retailers in trouble. Financial Health is one guide in Retailer Risk
Elsewhere on the high street, Clinton Cards administrators have announced all remaining stores are to close by the end of the month, the government has announced a further 15 town centres that have been accepted into the Portas Pilots scheme, Max Studio have signed up to London Designer Outlet at Wembley, Vivienne Westwood is to open a store in St. Davids Shopping Centre, Cardiff, Juicy Couture has opened its new flagship store on London's Regents Street and is replacing its store on Bruton Street.
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