Among the headline-grabbing stories of the month was the news that Selfridges had struck a deal with Primark.
Fashion faux pas
M&S raised eyebrows with the news it was to ask clothing suppliers to contribute to its £600m store refurbishment programme. It would equate to 1.2% of a supplier’s annual turnover with the retailer. Chief executive Marc Bolland’s reasoning was that growth would benefit suppliers.
Among the headline-grabbing stories of the month was the news that Selfridges had struck a deal with Primark for the fast fashion retailer to open concessions in its Birmingham and Manchester stores. The tie-up was the most significant proof yet of how shoppers increasingly mix high-end designer brands with bargains.
“We’ve not been happy with our growth in the UK for some time but we’ve taken some firm action”
Mothercare was the subject of much press coverage with not only a shock profit warning, but the announcement that chief executive Ben Gordon’s nine-year tenure at the struggling retailer was to come to an abrupt end. It was a different story for another retailer in the baby and maternity market, however. Morrisons-owned retailer Kiddicare was to develop a nationwide chain of 45,000 sq ft non-food superstores, highlighting again the ever-increasing importance of a strong multichannel strategy.
Meanwhile Supergroup hit an uncharacteristically rocky patch in its hitherto unfaltering success, when it was revealed that a warehouse malfunction could hit profits by as much as £9m. Analysts observed that it highlighted the issue of the low visibility that can arise when a company embarks on rapid expansion.
Another retail success story to suffer a difficult month was Burberry, which, despite a consistently strong performance, suffered a 20% fall in its share price. The reason? Investors were spooked by the growth outlook in China, which had until then proved immune to global economic problems.
Mary Portas drew MPs to the Houses of Parliament ahead of her high street review planned. She outlined a raft of ideas the report was likely to include, including making it more attractive for the out-of-town staples – particularly supermarkets – to open in town centres. But on the same day retailers were infuriated by news of a massive hike in business rates in April 2012. Based on the rate of RPI inflation, which in September was 5.6%, the BRC estimated the rise would add £350m to retailers’ rates bills and called for Chancellor George Osborne to impose a lower increase.
People in the news
Mothercare began the hunt for a new chief executive with Ben Gordon’s imminent departure. Pets at Home boss Matt Davies announced his plan to step down in early 2012.
- BRC retail sales figures -0.6%