Like-for-like sales rose 3.3 per cent, compared with 0.6 per cent the previous year. Food and drink sales remained strong, but clothing and footwear sales were largely flat. Total sales increased 5.6 per cent

IN THE NEWS
It was confirmed that a consortium comprising private equity firms CVC Capital Partners, KKR and Blackstone was considering an acquisition of Sainsbury’s.

Retail Week revealed the full extent of Kwik Save’s crisis. Key suppliers had stopped delivering to many of the stores following late or non-payment, resulting in serious availability problems.

House of Fraser chief executive John King outlined his plans to make the department store chain the “Nordstrom of the UK”, with a revitalised premium concept.

Alliance Boots unveiled a joint venture in China with the Guangzhou Pharmaceuticals Corporation, bringing 29 retail pharmacies to the region.

Baugur and Sir Tom Hunter joined forces to create a single e-commerce platform, to support their retail business and manage web sites for other retailers.

Fopp trebled its store numbers after buying rival Music Zone out of administration.

Lord Sainsbury took back control of his 7.75 per cent stake in Sainsbury’s. Meanwhile, speculation was mounting that Marks & Spencer might bid for Sainsbury’s.

Debt specialist Cerberus was said to be close to taking control of troubled DIY retailer Focus.

Matalan planned to axe 100 jobs, as part of a cost-cutting drive to save the retailer more than£30 million.

Asda revealed its strongest like-for-like sales for more than two years. In addition, chief executive Andy Bond said he was considering the launch of Asda’s first convenience stores.

Retail software supplier Torex Retail faced an investigation by the Serious Fraud Office, following a shock profit warning and suspension in trading of the company’s AIM-listed shares. Torex was eventually sold to private equity firm Cerberus in June.

Gap signed a deal to bring its Banana Republic chain to the UK. The upmarket officewear and basics-with-a-fashionable-twist chain will open on Regent Street in March.

STORE OF THE MONTH
Habitat, Finchley Road
Another day, another Habitat store opening. Or so it felt at various points during 2007. This store was, in fact, a relocation and provided a better indication of the direction taken by the upscale-ish chain of furniture stores than the converted Deco cinema on Regent Street had done in 2006. In addition, the Finchley Road Habitat benefited from loyalty generated by having had a presence in the area for more than two decades.
A large two-floor space with great external visibility, as well as dramatic in-mall windows, Habitat was remodelled inside to give a sense of a domestic interior. For the most part, the way the Finchley Road store looks has informed the rest of what the retailer has done during the year.

ON THE MOVE

Paul Niklas joined the beleaguered Kwik Save in an effort to revive its fortunes.

Peacocks group finance director and major shareholder Keith Bryant quit the retailer after a decade.

Halfords finance director Nick Carter left for the world of private equity. He was replaced by the retailer’s business development and HR director Nick Wharton.

Nigel Blow resigned as Harrods buying and merchandising director to join Brown Thomas as chief executive.

CATALOGUE OF DISASTERS

There are few more successful entrepreneurs in retail today than Mike Ashley. There are also none more controversial.

2007 was the year that the man who had hitherto always had his name prefixed with the word “reclusive” came out of the shadows, cutting a comical sight in an outsize Newcastle United shirt.

Since setting up Sports Direct after leaving school in 1982, Ashley gradually built what became a feared player in the sports sector and a thorn in the side of the more established operations, notably JJB Sports. Sports Direct may be known in retail for its jumble-sale approach to merchandising and its handwritten point of sale, but customers didn’t care because of the prices.

The bulls in the City, led by Sports Direct’s adviser Merrill Lynch, backed Ashley’s float unquestioningly, although there were a few sceptical voices – Retail Week among them. And, as the year developed, fears that Ashley would simply not adjust to life running a quoted business came horribly true.

The first 10 months read like a litany of catastrophes. City grandee David Richardson lasted only three months as chairman – as Retail Week went to press, Ashley was reportedly considering giving himself the job. Fellow non-executive Chris Bulmer quit last month and, while they are talented individuals, no one is convinced that new board members Malcolm Dalgleish and Dave Singleton have enough clout in the City to help restore Ashley’s reputation. By November, dismal trading had led to two profit warnings and a collapse in the share price to a third of its float level.

Speculation is rife that Ashley might buy the company back cheaply. The analyst community no longer trusts him and the Square Mile’s confidence has gone. Ashley’s first year running a listed company has been an unedifying spectacle, but the real fools have been the lemmings in the City who closed their eyes to the obvious dangers at the time of the float.

Ashley remains a great retailer. The big question is whether in 2008 he skulks back into the private arena where his company belongs.