Fishing shop that may defy the High St gloom
THE UK’s high streets have been shrouded in gloom for much of the
past year. They have been struck with an unenviable combination of sky-high rents and business rates, along with increased competition and thrifty customers. With major casualties including Mothercare, House of Fraser and Carpetright, investors have backed away from retail stocks.
Stalwart Marks & Spencer has seen 10pc shaved off the value of its shares in the last year, while Mothercare has slumped by 72pc and Debenhams by around 66pc. Ian Forrest, an analyst at broker The Share Centre, said: ‘Costs are nearly all rising, and investors need to look at margins and what the impact of those rises is.’
Carl Jackson, of advisory firm Quantuma, which recently helped women’s clothing retailer Select Fashion avoid collapse, said: ‘The consumer these days is slightly more wary about going out and buying clothes or spending at restaurants. Online shopping is a big thing – any retailer that hasn’t developed online shopping is living in the dark ages.’
But for anyone willing to shop around, there are high street stocks that could make investors a pretty penny. Though it may not be familiar to many seasoned shopaholics, fishing tackle firm Angling Direct is expanding and believes in keeping its physical stores.
Chief executive Darren Bailey said: ‘A high street presence is very important for a specialist brand like Angling Direct, because it is all about creating a meaningful and memorable in-store experience that drives the modern shopper to buy more and return as a loyal customer.’
The business has hired keen anglers as staff in the hope that customers will pop in for advice and leave with a few products.
Other more well known fishing retailers just haven’t been quick enough at adapt- ing to changing shopping patterns, according to Bailey. He said: ‘Many of what I call the “legacy retailers” that have imploded, over the last two years especially, have had all the signals to make a change. As a retailer, if you ignore those signals, the modern savvy shopper will ignore you.’
For Angling Direct, faith in the High Street seems to be paying off. It increased in-store and online sales last year, opened three new stores and its share price has risen from 67p when it floated last July to 96p now.
Mainstream stores are worth attention too. Mark Swain, manager of the Smith & Williamson Enterprise Fund, said JD Sports was benefiting from the growing ‘athleisure’ trend, adding that its international expansion provides protection from Brexitrelated uncertainties.
Superdry, which received praise from investors when it revealed results earlier this week, was another name on Swain’s list. He said the business was ‘well run’ and manages to make its products stand out a little from the crowd.
MEAnWHIlE, others are embracing the retail troubles as a catalyst for shaking up the High Street. Simon CopeThompson, at advisory firm livingstone, said: ‘Retailers and brands will need to look to new technologies to help drive valuable efficiencies and, more importantly, improve the overall customer experience.’
US-listed Gap has been experimenting with augmented reality, he said, while Tesco is trialling an app that allows customers to scan and pay using their smartphones.
But the old names could be back on the cards if local authorities and landlords listen to the growing outcry. Jackson said: ‘Business rates have got to be politically addressed. I think there will be a re-adjustment. Once that has happened, retail and high street restaurants will become attractive to an investor again.’