High street retailers reassure investors over English lockdown closures
A slew of high street names have lined up to reassure the City that their finances can withstand the sales disruption caused by a second lockdown in England.
The fashion brands Joules and Superdry pointed to booming web sales, up 35% and 52% respectively, as they updated investors on the impact of having to close their stores for a month of the Christmas trading period.
Nick Jones, the Joules chief executive, said the company had learned lessons from the spring lockdown that would help it to trade through what he called a “challenging period”.
“Joules has a very strong brand and a flexible business model,” said Jones, adding that significant investment in its web operation meant it was confident it could “satisfy demand”.
The new restrictions in England have forced retailers deemed “nonessential” – a group that includes stores selling clothing, homewares and technology – to remain closed until 2 December. Food shops, DIY chains, garden centres and pawnshops are among the businesses permitted to continue trading.
Non-essential retail stores are still trading in Scotland and Northern Ireland and are due to reopen in Wales on Monday when its “firebreak” lockdown ends.
The rules for the new English lockdown are not exactly the same as in the spring, with homewares chains missed off the list of essential retailers this time round, leading to big names such as Ikea closing their doors.
The homewares chain Dunelm complained that being forced to close was “unexpected and inconsistent with the guidance provided during the previous national lockdown”. Its 145 stores in England are now offering only a clickand-collect service.
The Dunelm chief executive, Nick Wilkinson, said it too had invested in its website, which he said would give it the “capacity to support an expected increase in demand during the lockdown period”. The company said it had £156m in the bank and £175m of loans it could call upon.
“Whilst the new restrictions have increased the level of uncertainty in the outlook for the financial year, we remain confident in our proposition and the adaptability of our total retail system,” Wilkinson said.
The prospect of another period of quarantine at home brought some cheer for the crafts, books and toy chain The Works. Sales at established stores are up 11% on 2019 since reopening in the summer, with the retailer reporting bumper sales of board games, jigsaw and craft materials.
Gavin Peck, its chief executive, said it was “disappointing that we have had to close most of our stores again so close to Christmas, but the strong performance since the last lockdown and our sound financial position mean we are well placed … to make up as much lost ground as possible in December”.