All eyes on rival fashion retailers as reports due on their festive fortunes
Locally-led solutions required
HIGH STREET fashion giant Primark and online rival Boohoo will be among the next batch of retailers to report back on their festive fortunes.
Primark figures will be watched closely for how it has fared after it already warned trading has been “challenging” in the run-up to Christmas . The update from owner Associated British Foods on Thursday will reveal whether it enjoyed a pick-up in the crucial Christmas weeks, given the boost seen by rival Next after a last-minute shopping rush.
Retail analyst Simon Bowler at Numis Securities is predicting Primark to post a two per cent fall in like-for-like sales. This would come alongside five per cent revenue growth, driven by expansion.
He said: “Following the cautious statement on November trading made at the AGM, we have assumed a pick-up in December, as seen with peer Next.” In November, AB Foods reported that like-for-like sales at Primark fell 2.1 per cent in the year to September as bad weather weighed on trading in Europe.
In the group’s annual general meeting update a month later, it warned November had been “tough”, but stuck to its expectation for an increase in profits at Primark as a result of careful inventory management and improved margins.
Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: “It’s been a prickly year for retailers, although the discount chain has bucked negative trends in the past. Given Primark’s track record, we think that can continue.”
Boohoo is set to leave rivals in the shade when it updates on Tuesday, with Numis pencilling in 38 per cent growth in its third quarter.
NEW FIGURES showing falling footfall on the nation’s High Streets during December – the 13th month in a row of declines – and warnings that retailers can no longer rely on Christmas trading to make up for reduced revenue during the rest of the year sadly come as little surprise.
But they provide further evidence of the urgent need for High Streets to evolve if they are to have a viable future. The ever-increasing dominance of online shopping is highlighted by shopper numbers also dropping at shopping centres and retail parks.
The recent recommendations of businessman Sir John Timpson as he headed a Government-appointed panel on the future of High Streets offer some grounds for optimism. He said ‘Upside Down Government’ in which local leaders rather than Whitehall take charge of changes should make more town centres ‘a place where people want to be.’
Community-led solutions are the best conceivable way to save small businesses.