Fashion store closures dent May retail spurt
WARM weather and the royal wedding brought shoppers out in force last month.
But more stores are set to close as the owner of Simply Be and Jacamo prepares to exit the high street.
Retail sales volumes rose for a second straight month in May, growing by 1.3 per cent from the previous month compared with forecasts of 0.5 per cent, according to the Office for National Statistics.
Compared with a year earlier, the amount of goods purchased jumped by 3.9 per cent, while in the three months to May volumes grew by 0.9 per cent from the previous quarter.
The ONS said feedback from retailers suggested a sustained period of good weather and celebrations surrounding the royal wedding had bumped up spending on food and household goods, with DIY and garden items in demand.
The positive retail data contrasts with figures earlier this week showing the fastest drop in manufacturing for six years, which had cast doubt on prospects for an interest rate rise in August.
Ruth Gregory of Capital Economics said retail sales, which account for about a fifth of GDP, were on track for their biggest quarterly gain for more than two years.
Changing spending patters were highlighted by record proportions for online food, department stores and clothing and footwear. Online sales make up 18 per cent of all retailing.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “The jump in retail sales in May has all the hallmarks of a weather-related blip, rather than a sustainable pick-up in spending.”
N Brown, the fashion retailer whose brands include JD Williams, as well as Simply Be and Jacamo, looks set to add to a wave of store closures by the likes of House of Fraser, Mothercare, Carpetright and New Look as it focuses on internet retailing. About 270 jobs are at risk as it weighs up the closure of its remaining 20 outlets.
Chief executive Angela Spindler said: “Given continued weak high street footfall, we have commenced a consultation process with colleagues over the future of our small store estate. This action has not been taken lightly and we will do all we can to support the colleagues affected during this process.”
Its stores generated £15million, or 2per cent, of group revenue. They suffered a pre-tax earnings loss of £3million last year.
The cost of closing the outlets is estimated at £18-22million.