Retail remains a hard sell despite some festive jingling at the tills
IN THE week before Christmas, I had cause to pass through Dublin’s Brown Thomas a couple of times. ‘The boom is back’ is a phrase that has been bandied about a lot and the high-end retailer has been among those to say that consumers have learned from the crash, and are now spending in a more considered manner.
But if the scenes in the store’s Louis Vuitton concession were anything to go by, a lot of people were spending big this Christmas. Louis Vuitton would no doubt pride itself on its customer care, but given the throngs lining up to buy handbags in the Christmas rush — and the location of the concession near a busy exit door — shoppers had to line up behind a rope barrier as they waited their turn.
Bear in mind that this was shortly after 9am, so I am sure the section of the shop only got busier as the day wore on.
For those of you not au fait with Louis Vuitton, the bags begin at over €1,000 but go well into the tens of thousands for exotic leathers and more complex designs. While some pre-Christmas sales were in full swing at that stage, many high-end designers such as Louis Vuitton never discount.
This is just a snapshot of one segment of the retail market but it shows there is plenty of money about for certain types of products. What it says about the state of Irish retail is less clear. The overall picture for Christmas seems to have been reasonably positive. Industry representative body Retail Excellence estimated that retail sales were up between 1pc and 2pc for the Christmas and sales season.
It said that the picture was mixed, with cities and large centres doing well, while lower-key shopping locations struggled.
The body also said online had enjoyed double-digit growth overall, although possibly not as strong as in other years. This may in part be due to the fact that cities and big stores (and indeed many smaller shops) are fighting back, offering entertainment and experiences which can never be enjoyed while scrolling through a site.
In the UK, however, some big brand names have issued sobering updates. Sales at John Lewis group fell 1.8pc over the key Christmas period; Marks and Spencer reported a 1.7pc drop in like-for-like clothing and home sales, sending shares sliding; and casualwear fashion brand Superdry continued to see sales disappoint. Consumer confidence, online alternatives and changing tastes may all be at play, but it rounds off what has been a difficult year for the retail market there.
In Ireland, we have been relatively unscathed by the so-called retail apocalypse ravaging British high streets. There has been a high-profile casualty this year in the form of Fallon & Byrne, which had a strong retail mix, as well as a café/restaurant at its now closed Rathmines location.
The sudden closure means the landlord of the Swan Centre now has a large empty unit in the suburban shopping location, which is not a great start to the year for any retail business. Its anchor tenant and several high-quality small units will continue to be a draw, but no landlord wants an empty unit in January.
At Dundrum Town Centre, it appears that management is already working to ensure that it will be ready to act quickly should House of Fraser move out or downsize. Mike Ashley, owner of Sports Direct, which bought House of Fraser in 2018, warned just before Christmas that more House of Fraser stores would have to close. Dundrum is looking at splitting the large department store into two units — which would make it easier to rent.
But the exit or even downsizing of high-profile House of Fraser — which sits prominently at the entrance of the premises — would be a significant change for the centre. It would also be a reminder that woes of British retailers will have some knock-on effect here.
There have been deep changes in retail over the last decade. Retailers in Ireland have definitely had a difficult time and those who continue to trade have had to innovate, invest and adapt to survive.
Retail has done well to deliver modest growth in Christmas 2019, but the next 10 years will continue to challenge the sector.