Country: UK

The high enthusiasm of British shoppers shopping in the week before Christmas did not par the sales generated in the previous year in the month of December, according to BDO, the accountancy and business advisory firm.

The report mentioned that like-for-like retail sales in the reporting period fell 0.1 percent year on year. However, online sales jumped 19 per cent year on year, an evidence of a continuing shift in shopping habits. But, sales of fashion goods declined 1.07 per cent.

“With such a weak base for December 2015 (when sales fell 5.3 percent) any further decline can only be seen as a poor result for retailers. Coming at a critical juncture, this fourth negative December in succession highlights the magnitude of the challenge that lies ahead for 2017, when consumers will more keenly feel the bite of inflation and the weaker pound,” said Sophie Michael, Head – Retail and Wholesale, BDO.

Also Read – 2016 holiday season retail sales rise 4%: NRF

Robust growth in consumer spending has been one of the main factors sustaining Britain’s economy since last June’s vote to leave the European Union. But many retailers fear a squeeze on spending as inflation begins to erode real earnings growth in 2017, the report underlined.

Bonmarché, UK’s largest women’s value retailers, has unveiled its financial report for the third quarter ended 24th December, 2016.

In the reporting period, the company’s total sales increased 3.3 per cent. The store LFL sales were up 0.8 per cent, whereas online sales jumped 3.8 per cent from last year. However, total sales for the 39 weeks period declined 1.3 per cent. In this period, store LFL sales plugged 5.3 per cent while for online sales, it dived 2.1 per cent.

Helen Connolly, Chief Executive Officer, Bonmarché said, “Given the backdrop of the current trading environment, our third quarter store sales were satisfactory, particularly in light of the business still being in the early stages of its turnaround. The online performance was poor, and this continues to be a key area of focus. There remains a degree of uncertainty as to trading conditions as we enter our final quarter.”

Also Read – Bonmarché posts strong FY ’16 results

The fashion labels also reported its financial results for the month of December. The total sales improved 1.5 per cent in the particular month. The store LFL sales increased 3.4 per cent, whereas online sales noted a jump of 14.3 per cent.

Fashion brand Burberry has confirmed that Marco Gobbetti will take charge as Chief Executive Officer from July 5, 2017. Meanwhile, he will assume the role of Executive Chairman, Asia Pacific and Middle East regions by the end of this month until July 4, 2017.He is the former CEO and Chairman of Céline, the influential LVMH-owned fashion and accessories brand.

In July 2016, the British fashion houserecruited Gobbetti as its new CEO, replacing Christopher Bailey. Burberry said, “Bailey will continue as Chief Creative Officer and CEO until July 4. He will transition to the new role of President and Chief Creative Officer on July 5, and will remain on the board.”

Commenting on the appointment, Burberry’s Chairman Sir John Peace said, “Marco brings incredible experience and skills in luxury and retail with him that will be invaluable to us. He has an outstanding track record of delivering growth in the luxury industry, and his vision for the sector and how it will evolve is extremely impressive.”

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Investors and retail experts welcomed the new appointment, which they said would help Burberry cope with falling profits due to flagging demand for luxury goods in markets such as China and Russia. However, the fashion brand is forecasting a 25 percent surge in third quarter sales to £752 million, with like-for-like sales up 2 per cent.

The new annual figures on British fashion market have brought an unpleasant news for retailers in the country. The report released by Kantar Worldpanel, an international company dealing in consumer knowledge and insights based on continuous consumer panels, has revealed that the market suffered worst sales since 2009.

The fashion sector including clothing, footwear and accessories combined witnessed a drop of 2.0 per cent in 2016 as compared to last year.

“The British fashion market faced tough situation in year ended recently. A 2.0 per cent drop in sales is a serious cause for concern, particularly when you consider that the lowest point the market reached in the wake of recession was a 3.1 per cent slump in May 2009. Although it’s not great news overall, there are some bright spots for the market – online pure players saw impressive growth of 7 per cent year on year, while independent retailers improved sales by 3.2 per cent,” said Glen Tooke, Consumer Insight Director at Kantar Worldpanel.

Also Read – M&S’ clothing and home sales surge 3.1% in Q3

Even much-anticipated Black Friday failed to lift the spirits of the fashion market in Britain. The retailers are however expecting good sales in coming days as customers may look for warm clothing due to the cold season.

Britain’s largest online-only fashion retailer ASOS will invest more in expansion as it has raised growth forecast on the back of strong Black Friday and Christmas sales. The company reported total revenues of £ 621.3 million in the last four months of 2016, 36 per cent up on the same period a year earlier.

The fashion retailer also highlighted the reinvestment they had made to boost their gain from foreign exchange movements into price cuts, and that as a result it now expects full-year sales growth to be between 25 per cent and 30 per cent. It previously forecast 20 per cent to 25 per cent surge in sales.

Nick Beighton, ASOS’ Chief Executive said the faster growth require higher investment in infrastructure to cope. The company will now spend up to £ 170 million this year, against the previously planned maximum of £ 140 million.

Also Read – ASOS to double its production in UK

Also, ASOS will invest in a new warehouse in the US with up to 10 times more capacity than its current facilities. Though it accounts for less than a tenth of revenues, the US operation increased sales by two thirds on last year.

Overall growth in international markets outpaced ASOS’ progress at home. International retail sales of £ 361.7 million were up 52 per cent on the same period a year earlier, and 41 per cent on a constant currency basis.

English menswear brand, Hackett recently announced that it swung to a loss in its financial year ended 31 March 2016 due to the weakening pound against the dollar even before the Brexit vote and increased markdowns for the decrease.

The stylish retailer saw UK and Ireland turnover fall 2.4 per cent to £ 107.4 million in the year to March 31, but global sales rose 5.8 per cent to £ 151 million.

The retail business increased by 12.5 per cent which was driven by full year trading of its London store on Old Broad Street and new openings during the year at Bluewater in Kent and Gun Wharf Quays Outlet in Portsmouth.

Wholesale revenue of the retailer, however, declined by 6.2 per cent during the period. This was largely attributed to a slowdown in European and Middle East wholesale deliveries for Spring/Summer 2016.

Also Read – Hackett London launches S/S ’15 kids’ collection Little Britons

Hackett has 113 stores and 55 concessions worldwide, and plans to continue to focus on its global expansion.

Luxury brand Ted Baker has reported an 18 per cent jump in sales over the festive trading period. Sales increase was also seen in its online wing, which posted a 35 per cent rise in sales over the same period last holiday season.

Ray Kelvin, Chief Executive of the company said, “Ted Baker has continued to perform well over the Christmas period against a tough trading backdrop. This result reflects the appeal of the brand and the quality of our collections as well as the talent and commitment of our team. The strength of the brand and our multiple channels of distribution leave us well placed to continue the development of Ted Baker as a global lifestyle brand.”

Also Read – Christmas Day online spend expected to reach £ 805.1 million: Report

Overall sales growth at the retailer was partly driven by new store openings as it saw a rise in average square footage of 8.5 per cent over the period. This included further concession openings in China and, with its licence partners, its first store in Bahrain and an additional store in Indonesia.

The company has stores and outlets in the rest of Europe, US, Canada, Australia, Asia, China, South Africa and the Middle East.

A Black Friday online boost helped lift sales over the holiday season at department store chain House of Fraser. The UK-based fashion retailer said that it had a decent Christmas trading period, starting from the week of Black Friday. Like-for-like sales (excluding VAT) in six weeks to January 2, 2017 were up by 5.3 per cent against the comparative period of last year and up 16.7 per cent against 2014.

On Black Friday, total sales for the retailer zoomed 10 per cent on the previous year and it was also the Group’s biggest ever online sales day, up over 40 per cent on 2015. It seems to have maintained the strong trading through the season with the seven days before Christmas seeing like-for-like sales up 6 per cent and a positive performance from both online and physical stores. 12 of its stores delivered their best ever sales and the company said its own labels saw sales rising 4.5 per cent.

Also Read – House of Fraser forays into Chinese market

Nigel Oddy, CEO of the company is pleased that both online and stores did well with the company’s recently refurbished stores showing particularly strong growth in the final week before Christmas. He also highlighted a 22 per cent increase in its click and collect service.

House of Fraser has 60 across the UK and Ireland with annual sales of around £ 1.3 billion.

UK-based apparel and home retailer Marks and Spencer has unveiled its financial results for the third quarter of financial year 2016. The Group sales were up 5.9 per cent on a reported basis in the period under review.

In the reporting period, the retailer’s clothing & home segment sales increased 3.1 per cent. Clothing & home like-for-like sales were up by 2.3 per cent.  The company reduced sales on promotion in the mentioned period, with many fewer category promotions particularly over Black Friday. Additionally, international sales surged 18.9 per cent on a reported basis.

Also Read – M&S to shut stores internationally; posts lower profits in H1FY 2016

Steve Rowe, Chief Executive, M&S said, “I am pleased with the customer response we have seen to the changes we are making in line with our plan for the business. In Clothing & Home, better ranges, better availability and better prices helped to improve our performance in a difficult marketplace. We also continued to substantially reduce discounting, including over Black Friday,” adding, “As we look forward, our Q4 reported numbers will be adversely affected by sale timing and a later Easter.  Against the background of uncertain consumer confidence, the business remains focused on delivering the strategic actions announced last year.”