Raiding tills to pay bills
Stores set for a torrid spring
STRUGGLING shops are facing a perfect storm of cost hikes, which threaten to trigger a fresh wave of carnage.
The next two months will see stores hit with a number of big bills which, this year more than ever, could tip many firms over the edge.
It starts with rent day in late March, when store bosses need to find three months’ money.
The UK is set to leave the EU only days later, on March 29, with Brexit having already taken a big bite out of consumer confidence.
The National Living Wage for workers aged 25 and over will rise by 4.9 per cent on April 1.
The same day will see the latest annual rise in business rates, adding £130million to retailers’ bills.
Independent retail analyst Richard Hyman said: “It is hard to imagine this year will be as bad as last year was for retailers, but I think it will.”
The shock, combined with Brexit uncertainties, forced struggling Debenhams to borrow an extra £40million from its lenders. The move will give the chain breathing space as it tries to sort out its finances, which is likely to include plans for a wave of department store closures.
Debenhams had rejected a £40million strings-attached funding offer from Mike Ashley’s Sports Direct, its biggest shareholder.
Chief executive Sergio Bucher, who Ashley booted off the board but remains in the top job, said: “Today’s announcement represents the first step in our refinancing process.”
Laith Khalaf, senior analyst at broker Hargreaves Lansdown, said: “The debt agreement is a lifeline for Debenhams but it isn’t going to solve its fundamental problems.”
Hyman predicted that lenders will play a “crucial” role in how many stores go to the wall this year. up 4.0 at 7133.1 Ei Group 202.0 Ferguson 5318.0 GlaxoSmithKline 1546.8 Halfords 237.6 Hays 156.3 HSBC 653.6 Imperial Brands 2578.5 International Airlines Grp652.6 ITV 132.0 Kingfisher 231.4 Land Securities 890.6 Legal & General 264.2 Lloyds 58.0 Marks & Spencer 289.7 Morrison 239.6 National Grid 845.3 Next 4959.0 Pearson 942.0 Prudential 1520.0 Reckitt Benckiser 6001.0 RELX 1727.0 Oil 0.0 -43.0 -3.2 +5.0 +4.8 +3.1 +2.0 -11.0 -0.1 +3.3 +5.6 +0.6 +0.2 -0.8 -4.1 +1.3 +8.0 -1.6 +10.0 +40.0 -11.0 BLOOMING FAMOUS Liberty floral print dress = $62.75 Rentokil Initial 352.0 Rio Tinto 4294.5 Rolls-Royce 913.6 Royal Mail 271.8 RSA 536.0 RBS 240.3 J Sainsbury 283.9 SSE 1192.0 Severn Trent 1974.5 Serco 111.7 Sports Direct 273.6 Shell 2474.5 Smith & Nephew 1468.0 Smiths WH 2016.0 Stagecoach 155.1 Standard Chartered 628.3 Standard Life Aberdeen..247.5 TalkTalk 97.0 Taylor Wimpey 164.3 Tesco 223.5 -2.7 +7.5 -0.8 -3.1 +3.0 +2.5 -10.0 +18.0 -18.5 -2.3 +1.0 +14.5 -1.5 +26.0 +1.8 +1.0 0.0 -1.1 -3.4 -1.5 Thomas Cook Unilever United Utilities Vodafone Reach PLC 26.2 4256.5 814.0 139.6 56.8 -1.4 +51.0 -9.4 -1.5 -0.7