BINKS RETAIL UPDATE - W/C 26th April 2021

Missguided to sell stake in company for first time

Missguided founder and owner Nitin Passi is reportedly preparing to sell a stake in the company for the first time.  Passi has appointed Rothschild to find potential investors as he seeks to expand the business.  The initiative could raise as much as £100 million, This is Money reported.  “I’ve done this for 12 years without raising money,” Passi said.  “We’ve had some issues but they are now behind us and we’ve got our magic back.  “We can still grow this business as we are but we want to grow the business more aggressively.  “This is not for me to take money off the table, we want to put money into the business.”  Sales at Missguided rose 40 per cent to around £290 million in the year to March.  It was profitable before including costs arising from the pandemic.  Passi expects turnover to be “closer to £400million” this year with a focus on UK and US growth.  “Our customer has been starved of her normal life. But people are getting ready to go out, go to the pub, to festivals,” he said.  “If people can go on holiday as well, I think we are in for a really good time this summer.”

 

Social selling retail enjoys 32% growth in Q1

New research has shown continued strong growth in the UK’s direct selling sector in the first quarter of the year.  According to direct-to-consumer retail body The Direct Selling Association (DSA), there was an average quarter-on-quarter increase in turnover of 32 per cent across companies that took park in its survey.  These companies include the likes of Avon, The Body Shop, Usborne Books at Home and Amway.  “Following a particularly strong year for the channel in 2020, direct selling is continuing to grow within the UK market,” DSA director general Susannah Schofield said.  “Many of our members reported quarter-on-quarter growth of double figures in Q1, with one stating that turnover grew by 103 per cent.”  She added: “As with many retail brands, the fourth quarter is typically the largest of the year for many of our members, so to see quarter-on-quarter growth of this nature in Q1 is significant.”  The DSA also found that the number of people joining direct selling brands to earn additional income by becoming independent salespeople increased by an average of 23 per cent in the first quarter.  In addition, all 22 chief executives of the businesses the DSA surveyed felt optimistic about their firm’s performance in 2021.  “The closure of non-essential shops during the Covid-19 lockdowns prompted a significant number of people to both discover and re-engage with direct selling as an alternative way to buy a wide range of products,” Schofield said.  “In addition, the increased number of people joining the sector to earn as independent salespeople has helped to increase awareness of brands selling this way throughout the UK, helping to further drive growth.”  The DSA defines direct selling as a £2.67 billion-a-year channel where products are sold directly to consumers outside of a fixed retail environment.  This could be via social events, Tupperware-style parties, online or through catalogue distribution.  Individuals act as independent salespeople and earn through commission paid on product sales.  Direct selling also operates in a similar manner to a franchise, but start-up fees are considerably lower, and it is often free to get started.

 

 

 

John Lewis Partnership donate £1m to local charities fighting child poverty

The John Lewis Partnership is poised to donate more than £1 million to over 1000 local charities and community organisations helping to end child poverty across the UK.  The donations, to be made this summer, are part of the partnership’s Give a Little Love scheme and aims to help those disproportionately impacted by the Covid-19 pandemic.  A total of 2.3 million children experienced food insecurity between March and August last year, and 850,000 children reported that they or their families visited a food bank.  To help tackle this, each John Lewis and Waitrose shop will be directing their regular community donations to charities in their own communities that support children in poverty.  This support will run from May to July – providing vital support during the May half term and summer holidays when millions of children are at risk of being hungry.  Support will be given through donations of money, products – such as clothing or kitchen equipment – and food donations.  The John Lewis Partnership added that it was a member of Marcus Rashford’s Child Food Poverty Task Force, a coalition of brands working together to end child food poverty.  “John Lewis Partnership is a valuable founding member of the Child Food Poverty Task Force and the company has strongly demonstrated their commitment to ending child food poverty across the UK since we formed,” Rashford said.  “‘Give a Little Love’ was a powerful and touching campaign over the Christmas holidays and I’m thrilled to see that campaign being built upon to guarantee more of those in need get the help they deserve.”  The announcement is the latest of a number of initiatives the John Lewis Partnership launched to support families in need.  In addition to the donation, Waitrose shops will continue to donate surplus food to FareShare, a food distribution charity.  Since 2017, the grocer has donated the equivalent of more than five million meals to those in need.  Waitrose also works with Kitchen Social and The Felix Project to donate stock to people facing food insecurity.  Meanwhile, the partnership’s Give a Little Love campaign has already raised over £3 million for long term charity partners FareShare, Home-Start and local community groups, with a further £2 million pledged earlier this year.  The partnership added that it also donated nearly 5000 items of warm clothing to Home-Start to distribute to families during winter.  In February Waitrose launched a new programme with FareShare, Farm to Family, becoming the first UK supermarket to take surplus food straight from its largest suppliers and farms to the plates of those in need.

 

 

 

150 year old House of Fraser store in London's Victoria to shut down

One of the oldest department stores in central London it set to shut down next summer after trading on the same site for 150 years.  The Victoria branch of House of Fraser, which began as Army & Navy in 1872, would join West End names like Dickins & Jones, Bourne & Hollingsworth, Swan & Edgar – and Debenhams’ Oxford Street flagship – that have shut down for good.  News of the House of Fraser Victoria shutting down comes as Westminster City Council prepares to give planning permission to demolish the Victoria Street building and replace it with a £750 million office and shops development.  The council will consider the plans, from Canadian-owned property investor BentallGreenOak, on Tuesday.  The plans lodged with Westminster show that the 390,000sq ft site where House of Fraser is based would be knocked down and replaced with a 16-storey, 630,000 sq ft scheme with up to 20 shop units and office space.  The store closure would be delayed until next summer due to a break clause in the lease.  While the current building was built in the 1970s, a department store has traded on the same site for 150 years.  It served as the flagship for Army & Navy, which was acquired by House of Fraser in 1973. In 2005 the remaining Army & Navy stores, including the Victoria flagship, were refurbished and re-branded under the House of Fraser brand.  House of Fraser has been part of Mike Ashley’s Frasers Group retail empire since August 2018, and since then it has endured a series of store closures – one of which was the City of London site – due to various trading struggles.  The Victoria branch of House of Fraser currently paying no rent.  BentallGreenOak, which has owned the House of Fraser Victoria building since 2005, have  said its proposal was “incongruous with current market trends, which they state has seen a shift from large department stores towards smaller scale flexible retail units which meet local needs”.

 

 

 

ProCook pursues international expansion after bumper year

ProCook has announced its highest yielding year ever after sales for its 2020/21 financial year hit £64.5 million, marking a 35 per cent year-on-year increase.  The kitchenware retailer said the figure broke all records and more than doubled expected growth while also delivering profits of over £10 million.  ProCook attributed its success over the past 12 months to agile systems that enabled a fast response to the challenges of the pandemic, an increased consumer demand for kitchenware, and significant growth in the expanded tableware category.  In the wake of its significant annual growth, ProCook confirmed plans to open six large format stores in strong retail destination centres in the coming months, including key stores at Bluewater in Kent and Cribbs Causeway in Bristol.  “ProCook remains committed to offering bricks and mortar retail stores and these new stores will enable so many more customers to experience our exceptional service and feel the quality of our products for themselves,” retail director Andy Kerr said.  “We’re confident our expansion plans will continue to deliver growth for the foreseeable future.”  ProCook has also launched a 5000sq ft warehouse and office hub in The Netherlands to serve European markets, marking the first phase in the retailer’s international expansion.  This will be followed by the opening of several European ProCook stores later in the year.  Founder Daniel O’Neill said: “By stepping up to meet the opportunities presented to us in the past year we’ve achieved some incredible numbers and accelerated our plans to expand internationally.  “Opening an EU distribution centre allows us to offer EU customer the same great 1-2 day service our UK customers enjoy, and enable us to tailor our approach to different markets more effectively.”

 

Debenhams confirms locations of 52 store closures

Debenhams has announced the final closing dates for 52 of its stores less than a fortnight after they reopened with the easing of lockdown restrictions on non-essential retail.  On April 12, the department store chain reopened 97 stores in England and Wales to complete its final closing down sale as part of its liquidation process, and would continue to trade for a limited number of weeks until the stock in the stores is fully cleared.  Debenhams said at the time that the stores would start to close permanently from May 2, with the stock clearance completed and final store closures to take place by May 15.  This week, the collapsed retailer confirmed the location of stores across England and Wales that would shut down on May 2, May 4 and 8. (The locations are listed at the bottom of this article.)  In total, 52 stores will shut down for good, leaving 45 to continue trading until May 15.  Debenhams went into liquidation in December, after an administration process that started in April failed to secure any buyers to save the department store chain.  About a month later, its brand, ecommerce operations and assets were purchased by Boohoo Group in a £55 million deal. It did not include Debenham’s store estate.  Administrators said at the time that it would continue running closing down sales across Debenhams’ remaining shops – which counted 118 in December – once they were allowed to reopen.  However, last month Debenhams said it would not reopen its 15 stores in Scotland when the country’s lockdown for non-essential retail begins to ease on April 26. This resulted in 647 job losses.  Debenhams’ administrators said the Scottish Government’s lockdown exit timeline did not align with those expected in other parts of the UK, prompting it to make the decision to not reopen its Scottish stores briefly as it has done so in England and Wales.  The department store also plans to briefly reopen its remaining four stores in Northern Ireland, with administrators confirming today that it would do so when the country’s lockdown on non-essential retail is lifted on April 30.  With all of Debenhams’ stores closing down permanently as part of the liquidation and wind-down process, it means up to 12,000 staff would not have their jobs saved.  When it fell into administration in April last year, Debenhams went on to announce significant job cuts and store closures – including its flagship outlet on London’s Oxford Street.  That administration was also the second of its kind that Debenhams had launched within the space of 12 months.  The first administration in 2019 was followed up by CVA that saw it close down scores of stores immediately after the Christmas trading season that year.  Before that first administration, Debenhams operated from around 160 stores across the UK.

Debenhams stores closing on May 2:

• Carmarthen
• Fareham
• Gravesend
• Hounslow
• Ilford
• Llandudno
• Llanelli
• Newbury
• Oldham
• Taunton
• Walsall
• Winchester
• Workington
• Worthing
• Wrexham
• York Monks Cross

Debenhams stores closing on May 4:

• Bangor
• Bedford
• Bolton
• Bradford
• Bury
• Cambridge
• Hastings
• Ipswich
• Newport
• Nottingham
• Sutton

Debenhams stores closing on May 8:

• Blackpool
• Bury St Edmunds
• Crawley
• Derby
• Hemel Hempstead
• Leeds City Centre
• Lincoln
• Luton
• Middlesbrough
• Northampton
• Norwich
• Nuneaton
• Redditch
• Scunthorpe
• Southend-on-sea
• Stevenage
• Stockport
• Sunderland
• Telford
• Torquay
• Uxbridge
• Wakefield
• Westwood Cross
• Wigan
• Woking

 

 

 

Waitrose creates 400 jobs as it expands Deliveroo partnership

Waitrose has quadrupled the number of stores offering 20-minute delivery with Deliveroo creating 400 new jobs to support the expansion.

Deliveroo and Waitrose have announced a new two-year partnership following a successful trial which has been running since September last year, reportedly helping attract new younger customers to the brand.

After expanding the “hugely popular” partnership to 40 stores in December, the pair will now expand to a further 110 stores across the UK by the end of summer, giving around 13 million customers access to Waitrose good via Deliveroo.

The pair are also significantly expanding the product range available for delivery to between 750 and 1000 items, including free-from, dairy alternatives, vegan ranges, flowers and gifts.

To support the dramatic expansion, Waitrose is hiring 400 new shop staff to help fulfil orders ready for collection by Deliveroo riders.

The partnership was launched after Waitrose 19-year partnership with Ocado came to an end, forcing the grocer to quickly seek out new ways of expanding its online delivery capabilities.

According to Waitrose, part of the John Lewis Partnership, its Deliveroo tie-up is part of its new strategy of working with third-party brands to offers customers a broader range of products and services.

“We have grown our online business at pace in the last year, responding to huge demand for online groceries and offering more choice in when and how people want to shop with us,” Waitrose executive director James Bailey said.

“We know convenience is key for many of our customers and the expansion of the service with Deliveroo will play an integral role in helping us make Waitrose food more convenient than ever before.”

Deliveroo’s chief business officer Carlo Mocci added: “We are delighted to announce a two-year partnership with Waitrose, alongside a nationwide expansion to 150 stores.

“Waitrose is one of the most respected and loved British companies and we are proud to expand the extremely popular Waitrose service on Deliveroo. As we expand further across the country, this partnership will mean more choice and selection for our customers, delivered in as little as 20 minutes, and will create even more work for riders right across the UK.”

 

 

Grocery sales rise 5.7% despite wider reopening of retail

Shoppers are making more trips to supermarkets and buying less online as lockdown lifts and the vaccine rollout boosts confidence, according to new figures.  The latest figures from Kantar show that grocery sales rose by 5.7 per cent to £31.6 billion in the 12 weeks to April 18 as shopper confidence was boosted by the wider reopening of retail and lifting of lockdown restrictions.  However, this marked a further slowdown in the rate of growth seen a year earlier when shoppers panic-bought at the start of the Covid-19 pandemic.  Nonetheless, the latest figures show that take-home grocery sales growth accelerated to 6.5 per cent in the four weeks to April 18, and the number of trips to grocery stores rose by four per cent month-on-month in that same four week period.  On the flipside, online grocery sales growth has halved since the height of the pandemic, down to 46 per cent.  Kantar said older shoppers accounted for nearly half of the rise in footfall to grocery stores, with much of the over-65 community now vaccinated.  The figures also come as wider retail reopened on April 12, with lockdown restrictions lifting for non-essential retail across England and Wales.  In terms of market share, on a month-on-month basis all Big 4 supermarkets experienced a decline in April, except for Sainsbury’s which held steady at 15.3 per cent.  Aldi, Lidl and Waitrose increased their respective market shares, the Co-op and Iceland held steady, while Ocado lost one percentage point of market share.  On a year-on-year basis, the Big 4 grocers have all increased their market share, except for Sainsbury’s which held firm again.  Aldi, Iceland and Ocado also increased their market share when compared to the same period last year, Lidl and Waitrose held firm, while the Co-op’s market share declined five percentage points – the biggest drop of all supermarkets Kantar surveyed.  “There is a growing sense that the worst of the pandemic is behind us and people are becoming more comfortable with venturing out to the supermarket,” Kantar head of retail insight Fraser McKevitt said.  “The past four weeks have been the busiest in store for the grocers in more than a year as the number of trips made in April increased by four per cent compared to March.  “With much of the over-65 community now vaccinated, older shoppers accounted for nearly half of the increased footfall.”  He added: “While the market may fluctuate between growth and decline in the months ahead, depending on the year-on-year comparison being made, the fact that trip numbers are up and basket sizes down suggests that habits are slowly returning to normal.”

 

 

 

Yours Clothing to open shop-in-shop in Tesco stores

Yours Clothing has reportedly said it will launch shop-in-shops in selected Tesco supermarkets as part of a new deal.  Under the deal, owner AK Retail Holdings will operate dual-branded plus-size retailer Yours Clothing and men’s big and tall clothing retailer BadRhino stores for a trial period in two Tesco stores.  The first will open in the Tesco store at the Serpentine Green Shopping Centre, in Hampton, on April 30, while the second store will open next month at the Tesco store in Walsall, Peterborough Telegraph reported.  The trial is a long-term project and both stores will create an unspecified number of jobs.  Retail group AK Retail Holdings owns Yours Clothing, BadRhino, Long Tall Sally, Bump It Up Maternity and Yours London.  “As the leading retailer of ladies curve clothing and big and tall menswear clothing, we are excited about introducing even more customers to both brands via our partnership with Tesco, whilst offering great value on trend clothing that fits and flatters,” Yours Clothing and BadRhino owner and chief executive Andrew Killingsworth said.  “As the retail environment adapts to a new way of working, opening stores in partnership with Tesco is an exciting development for us and assists with our ongoing growth plans.”  Yours Clothing is headquartered in Bakewell Road, Orton Southgate, where it employs 1391 staff.

 

 

 

Co-op equips security guards with crime deterrent spray

Co-op has armed its security guards with handheld sprays to mark suspected criminals with difficult-to-remove invisible paint that shows up under UV light.  In the “most extreme circumstances” violent offenders will be sprayed, providing evidence for police to later act upon.  The primary use of SmartTag SmartWater is as a deterrent, with trials of the tool shown to calm potentially violent incidents.  The SmartWater will be used by Co-op’s Mitie-employed security officers in around 400 stores.  The rollout follows a pilot with Mitie security guards working with South Yorkshire Police.  Last year, Co-op said it witnessed a “crime and violence epidemic” with crime at its stores increasing by more than 140 per cent year on year. It recorded 1350 attacks on its shop workers in the first six months of 2020.  “Nothing is more important to us than the safety of our colleagues who work tirelessly to serve communities,” Co-op head of retail loss and security Andrew Needham said.  “No one should have to face violence just for doing their job, and we are doing everything we can to protect them.  “As a community retailer we see the impact of social issues in our stores, and alongside the latest technology the root causes of crime in communities must also be addressed – that is why we are calling for government to introduce greater protection for shopworkers with stiffer penalties and sentencing for those convicted to send out a clear message that violence, abuse and anti-social behaviour is not acceptable.”  This year will also see Co-op more than double the number of stores where colleagues wear body-worn cameras.  Over 550 stores are expected to use the technology, which can send real-time audio and visual footage to Mitie’s security operation centre at the push of a button.

 

 

Waitrose picnic food sales rise 213% as restrictions ease

Waitrose has recorded a rise in sales of picnic and food to go items last month with sales up 213 per cent compared to the same time last year.  The grocer said sales benefited from the recent easing of Covid-19 lockdown restrictions as people began to meet up for al fresco dining.  Waitrose is now planning to launch a new picnic box on its Deli counters in time for National Picnic Week, which runs from June 19 to 27.  The boxes will offer customers a selection of deli counter items such as pork pies, sausage rolls and scotch eggs.  Waitrose said customers will be able to buy the boxes on a special promotion with its British Artisan Cheese Boxes, which includes five of our most popular British cheeses.  “2021 is set to be the year of the picnic and we knew there was an opportunity to introduce more customers to the amazing selection of food we have on our counters,” Waitrose deli counter buyer Michelle Slade said.  “Our recent sales show that customers are already getting into the summer spirit and we have introduced this new box full of picnic staples to meet demand and make it really easy for our customers to pick up great quality food from our counters.”

 

Sainsbury's suffers from £261m loss due to Covid-19 costs

Sainsbury’s has swung to a full year loss as costs pertaining to Covid-19 and business strategic changes piled up, although its online and grocery sales enjoyed huge increases.  For the fiscal year ending March 6, the Big 4 grocer booked statutory loss before tax of £261 million – compared to profits of £255 million the year prior.  The retailer attributed the loss to one-off costs and impairments associated with one-off restructuring announced last November.  On an underlying basis, Sainsbury’s profit before tax plunged 39 per cent year-on-year to £356 million, with benefits from strong sales growth more than offset by £485 million of direct Covid-19 costs – covering staff absences as well as measures to make stores safe for customers.  Sainsbury’s said its overall full year revenue remained fairly flat: on a statutory basis it increased marginally by 0.2 per cent to £28.99 billion while on an underlying basis it dipped 0.3 per cent to £33.39 billion.  Meanwhile, like-for-like sales soared 8.1 per cent, but when factoring in fuel sales it only went up by 0.7 per cent.  Sales in Sainsbury’s core grocery division increased 7.8 per cent, while its general merchandise division – which includes the Argos and Habitat fascias – grew 8.3 per cent, and clothing sales from its Tu brand declined 8.5 per cent year-on-year.  The Big 4 grocer also saw a big shift online, with digital sales skyrocketing by 102 per cent to £12.1 billion.  Online orders now represent 17 per cent of Sainsbury’s grocery sales, compared to eight per cent the year before.  “This year’s financial results have been heavily influenced by the pandemic,” Sainsbury’s chief executive Simon Roberts said.  “Food and Argos sales are significantly higher, but the cost of keeping colleagues and customers safe during the pandemic has been high.  “Like our customers, we are all looking forward to things feeling more normal over the coming months and getting excited about a summer of celebration, but we are also cautious about the economic outlook.”

 

Dixons Carphone to close all airport stores

Dixons Carphone has made the decision to shutter its airport stores business, just months after a scheme offering duty-free shopping for international tourists was scrapped.  The retailer which was created through a £3.6 billion merger between Dixons Retail and Carphone Warehouse in 2014, said group sales have improved during the pandemic.  However, the group has faced difficulties at Dixons Travel, which comprises 35 stores, including eight at Heathrow and four at Gatwick.  “We do not expect passenger numbers to recover sufficiently to compensate for the removal of airside tax-free shopping by the UK government from January 1,” Dixons Carphone said.  “This has led to the difficult decision to close this business, which historically made an annual profit contribution of over £20 million.”  Dixons Carphone also said affected employees will be offered roles elsewhere in the company.  Elsewhere at the group, which trades as Currys PC World in the UK and Ireland, online growth has been strong, with sales more than doubling to £4.5 billion for the year.  UK and Ireland comparable sales growth rose 11 per cent in the 25 weeks to April 24 and 13 per cent in the 51 weeks to April 24.  The firm had shops closed for most of the period due to the latest national lockdown.  Dixons Carphone said that given its strong financial position, it repaid £73 million of furlough money.

 

Travis Perkins shareholders give Wickes spin-off the green light

Travis Perkins shareholders have given the thumbs-up to plans to spin off its Wickes retail business.  Investors in the London-listed DIY and hardware merchant and retailer almost unanimously voted to approve the demerger at Travis Perkins’ AGM yesterday.  It said that 197,759,462 of votes, representing 99.9 per cent of shareholders, voted in favour.  However, Travis Perkins suffered a bloody nose from shareholders who rebelled over its plans to offer extra share awards to Wickes bosses after the demerger is completed.  It said that 44.7 per cent of shareholder votes were cast against the plan, which could see the chief executive officer receiving a long-term incentives worth 175 per cent of their salary, with another long-term award for its finance chief.  The incentive deal was criticised by shareholder advisory body ISS, which initially called on investors to reject the move.  However, ISS later revised its recommendation after discussions with Wickes.  It has been more than a year since Travis Perkins first outlined plans to demerge Wickes, although the move was paused after the onset of the Covid-19 pandemic in the UK.  Last month, Travis Perkins said it was restarting the spin-off and that most of the preparations had already been completed before the move was paused.  Earlier this month, the company, which also owns the ToolStation chain, said sales ticked higher at the start of 2021 as it continued strong momentum from the second half of last year.  Travis Perkins saw its like-for-like sales rise by 17.4 per cent in the opening three months of the year, as it was propelled by 42 per cent growth at Toolstation.  Total sales growth for the business was 6.8 per cent compared to the same period last year.  Companies in the space have benefitted from increased house buying in recent months, after the UK Government paused stamp duty on some deals.

 

Asda's George launches new vintage second hand shop-in-shops

Asda’s George fascia is set to launch a new second hand fashion range in 50 stores across the UK following a successful pilot trial.  The Big 4 retailer said it has partnered with vintage fashion wholesaler Preloved Vintage Kilo to roll out the concept across its George concessions.  This means Asda customers will be able to buy vintage, retro and second-hand branded fashion items, preventing thousands of tonnes of garments going to landfill each year.  Following a successful trial in Asda’s sustainability store in Middleton, Leeds, the sustainable fashion partnership will soon be available in 50 stores, including in London, Bristol, Birmingham, Edinburgh and Brighton.  The move is part of Asda’s “George for Good” commitment to drive down textile waste and advocate for sustainable sourcing.  The second-hand concept roll out comes after George at Asda recently launched its Take Back scheme, which encourages customers to bring back their unwanted garments to store, rewarding them with a 10 per cent discount George voucher.  The scheme also raises money for Asda’s Tickled Pink campaign, which supports Breast Cancer Now and Coppafeel.  “We know that sustainable fashion is something that’s really important to our customers and colleagues,” said Mel Wilson, global professional lead for sustainable sourcing and quality.  “They’re passionate about us encouraging everyone in the UK to think about the issues of waste and how we can make fashion and textiles more circular, so that we really can reduce the number of garments that go into landfill.  “This is an exciting partnership for George, it’s unique in that not only can our customers pick out some vintage and often designer garments at an affordable price, but they’re also helping to support reduce waste by giving these items a second lease of life which is something we are proud to be apart of.”  Preloved Vintage Kilo managing director Steve Lynam said: “In a world where we are becoming more environmentally conscious this partnership will help bring sustainable fashion to the mainstream which is something as a business we strive for in everything we do.  “The more people that buy into the circular economy and shop vintage and retro the bigger impact we will have on climate change.  “As a business we have saved over 800 tonnes of clothing going to landfill and with the growth of our partnership that is set to increase dramatically.”

 

Flannels to improve elevation strategy with new brands & UK stores

Frasers Group has reportedly revealed new plans for Flannels which includes launching 165 new womenswear and menswear brands while opening new flagship stores and building on its elevation strategy.  Flannels is expanding its elevation strategy in an effort to bring the luxury retailer into “the next generation of retail”.  Plans also include the launch of new UK stores, and branching into new categories, such as kidswear and homeware, Drapers reported.  Flannels’ group head of elevation Michael Murray is leading the expansion of the business’s retail network.  Three further Flannels flagships will open this year – Sheffield Meadowhall in June or July, Leicester Fosse Park in July or August, and Liverpool in November – and a minimum of 10 regional stores will open every year, with no definitive end date.  This comes alongside a refurbishment program of the existing Flannels 47-strong store portfolio.  Liverpool, the largest of the stores opening this year at 120,000sq ft and will be located on Parker Street in the Owen Owen building.  As part of the elevation plans, Murray introduced two new roles to develop Flannels’ menswear and womenswear business improvement plans.  Ben Hurren was appointed to the new role of head of menswear elevation in February, having held the role of senior commercial manager at the company since November 2020.  He joined Flannels last year from Selfridges, where he held several senior men’s buying roles since 2014.  Meanwhile, Emma Ilori joined the business as head of womenswear elevation in February, having worked as a consultant for the company in the year prior.  Ilori has previously held senior buying roles at Farfetch and The Shop at Bluebird.  The pair will work together across all functions; from buying and retail, to marketing and ecommerce, to drive menswear and womenswear “newness”, deliver new brand opportunities and create “excitement” across the business with a new “vibrant” brand mix.  As head of menswear elevation, Hurren is responsible for leading the menswear buying team to elevate and progress Flannels’ offer.  Ilori is leading the womenswear buying team and creating new divisions within the business; including the launch of a contemporary category.  She is responsible for brokering new relationships with brands alongside building existing relationships with labels to create opportunities for important and engaging partnerships.  Flannels is also exploring new categories, including home accessories and jewellery. The business will be launching Caia candles and Anissa Kermiche vases into its flagship stores and online which could grow into the Style & Collect areas in all stores.  Meanwhile, “Flannels Junior” is another new element for the business, which will launch this summer. Its first dedicated store opens in Glasgow in early June.

 

 

 

WHSmith to open 100 new travel shops

WHSmith has set out plans to expand its travel business with the opening of 100 new shops despite the losses it has suffered due to the Covid-19 pandemic.  The retailer secured £325 million in financing to fund its growth plan, in the form of convertible bonds, as well as a £250 million credit facility from its banks which will mature in 2025.  Some of the proceeds of convertible bond will be used to refinance £400 million of existing bonds that are due for redemption in 2023, with £50 million earmarked to fund the opening of roughly 100 new stores in travel locations, such as airports and train stations, where it has already won competitive tenders.  It said it has a pipeline of 68 stores to open in the US, with the remaining travel stores set to open across the UK, Australia and the rest of Europe.  WHSmith generated more than half of sales and profits from its stores in airports, train stations, hospitals and motorway service areas before the pandemic struck.  It expects sales to recover to 2019 levels within the next two to three years.  The plans come after WHSmith reported a pre-tax loss of £38 million for its half-year to February, sliding from a £63 million profit in the same period last year.  Overall sales dropped by 44 per cent to £420 million, driven by a 65 per cent sales plunge to £150 million across its travel stores.  Meanwhile, its high street retail business, which has been impacted by lower footfall, saw a more modest 14 per cent decline in revenues to £270 million.  Overall travel revenue so far during the third quarter was 43 per cent of pre-pandemic levels, up from 34 per cent in the second quarter.  The high street stalwart also reported “encouraging signs of growth”, especially in the key US aviation market, where domestic travellers not subject to international travel restrictions represent four-fifths of the total.  “In travel, while many of our stores have remained closed, it is a credit to the team that we have kept up the momentum, focusing on our plan to increase average transaction value and spend per passenger while continuing to win new business,” WHSmith group chief executive Carl Cowling said.  “As a result, we are now operationally stronger than prior to the pandemic.”  He added: “We’ve just spent a lot of time negotiating our way out of minimum annual guarantees. Our rents will grow in line with our sales.  “Our average transaction value is a lot less and a lot of what we sell is not rated for VAT anyway.”

 

 

Westfield owner suffers decline in turnover and rental income

The parent company of Westfield, Unibail-Rodamco-Westfield has reported a decline in shopping centre turnover for the first quarter of the year, following the Covid-19 lockdowns.  The owner of Westfield London and Westfield Stratford City said proportionate turnover fell by 30.4 per cent year-on-year to €472.8 million (£410.9 million) for its shopping centre assets in the first quarter of 2021, ending March 31.  Total turnover on a proportionate basis for the first quarter stood at €566.7 million (£492.4 million), a decline of 40.8 per cent on the first quarter of 2020.  Gross rental income on a proportionate basis reached €502 million (£436 million), a decline of 33.4 per cent on the first quarter of last year.  Meanwhile, turnover for its office assets was down by 31.7 per cent to €19.5 million (£16.9 million), while turnover for convention and exhibition centres dropped by a colossal 83.2 per cent to €11.7 million (£10.16 million).  Revenues from property services and other activities declined by 38.9 per cent to €26.5 million (£23 million), and property development and project management revenues collapsed by 73.3 per cent to €36.2 million (£31.45 million).  “The group’s centres were effectively closed for an average of 42 days in the first quarter, with the exception of essential retail,” group chief executive Jean-Marie Tritant said.  “Combined with the ongoing closure of all convention and exhibition venues, the group’s performance in the quarter was strongly impacted, and we anticipate 2021 to remain very challenging with tougher and longer restrictions impacting the Group beyond Q1.  “While we saw encouraging leasing activity as brands continue to choose our locations in preparation for the post-Covid-19 market rebound, our overall vacancy rate did increase slightly in Q1 as a result of the lagged impact of the pandemic on retailers.  “We continue to partner with our tenants to navigate this environment together.  “We see positive signs of a return to normality whenever restrictions are eased, thanks to pent-up consumer demand for our high quality shopping destinations.   “In March, sales in Spain, Austria and Sweden, where non-essential retail was allowed to trade, reached 81 per cent, 79 per cent and 76 per cent of 2019 levels, respectively.  “Tenant sales in selected US markets where most restrictions had been removed, with the exception of capacity limits, also recovered strongly, with sales in our non-CBD flagship centres reaching 93 per cent of 2019 levels in March and some centres even exceeding pre-Covid levels.  “In addition, the strong return of UK footfall, reaching 75 per cent of 2019 levels and 1.2 million visits in the first week after reopening, despite ongoing indoor food and beverage and entertainment closures, is an encouraging sign of the appetite we expect to see across all markets.  “As outlined at the full-year results, the varied pace of vaccination progress and the resulting recovery trajectory of each of our markets means the group still lacks sufficient visibility to provide a full-year outlook at this time.”

 

 

 

Harrods opens 2nd & largest H Beauty store in Milton Keynes

Harrods has opened the second branch of its standalone H Beauty fascia at Centre:MK shopping centre in Milton Keynes today.  The new 29,000sq ft store also doubles up as the biggest H Beauty branch yet, following the debut site that opened at Intu Lakeside shopping centre last September.  Harrods’ H Beauty fascia offers a range of premium and luxury brands under one roof and includes onsite treatments, consultations and demonstrations.  Brands such as Gucci and Dolce and Gabanna beauty, Kylie, Anastasia Beverly Hills and Hourglass can be found in the new Milton Keynes store.  H Beauty’s treatments and services range from the Playtable, offering hair-styling and experiential product testing, to the Skincare Station and a click-and-collect boutique that allows customers to receive, try-on and return orders purchased from Harrods’ website.  The H Beauty space also features a 44-seater champagne bar that will be open from May 17, in line with government guidance.  “The latest H Beauty opening in Milton Keynes marks another significant addition to the UK’s beauty retail landscape and I am absolutely delighted to be creating an exciting new destination for our beauty community,” Harrods beauty director Annalise Fard said.  “As well as opening the most beautiful retail destination, we are so excited to be meeting beauty lovers and experts across the local community and bringing them into the H beauty family.  “The new H Beauty store in Milton Keynes will house an array of luxury brands including Dolce & Gabbana, La Mer and Roja Parfums, as well as fantastic beauty services.  “At Harrods, we take great pride in knowing our beauty community and using our authority in the beauty space to ensure that the portfolio of brands and products across each H Beauty store are tailored to suit the local customer, and this is reflected at H Beauty Centre:MK with the array of beauty collections and services.”  Centre:MK centre director Kevin Duffy said: “Centre:MK proves to be a resilient destination that has continued to welcome key anchor brands throughout the pandemic.  “We constantly outperform footfall benchmarks reflecting the strength and depth of offer at centre:mk, which attracts guests from across the region.  “Our strategy at Centre:MK is focused on exceeding customer expectations. As the most exciting concept to emerge in a fast-moving market, H Beauty is an exemplar of our strategy in action.  “H Beauty’s approach, line-up of brands and commitment to delivering a unique experience for visitors will be a significant addition to our retail offer moving forward.”

 

One in seven retail shops now empty as vacancies rise

New research has found that retail vacancies have increased across all shopping destinations and regions in the first quarter of 2021.  The overall retail vacancy rate increased to 14.1 per cent in the first quarter of 2021, marking a 1.9 per cent rise from the same period last year, according to the BRC-LDC Vacancy Monitor.  This vacancy rate was up from 13.7 per cent recorded in the final quarter of 2020 and marks three consecutive years of increased retail vacancies.  There are currently around 5000 fewer stores than there were at the start of the pandemic, with one in seven shops vacant.  Shopping centres recorded the largest increase in vacancies during the period, up 18.4 per cent compared with 17.1 per cent the previous quarter.  High street vacancies increased by 14.1 per cent in the first quarter of 2021, up from 13.7 per cent the previous quarter and in line with the overall vacancy rate.  Meanwhile, retail parks recorded a vacancy rate of 10.6 per cent in the first quarter of 2021 compared with 10 per cent in the final quarter of 2020.  In regional terms, vacancies in the North east stood at the highest level overall, up to 19.3 per cent compared with 18.8 per cent the previous quarter and 16.7 per cent during the same period the previous year.  On a quarterly basis, the West Midlands registered the sharpest increase in it vacancy rate, from 15.6 per cent at the end of 2020 to 16.9 per cent at the end of the first quarter of 2020.  Greater London vacancy rates were flat at 10.7 per cent.  “The number of vacant units has continued to increase in the first three months of this year across the country, despite much of the market being temporarily closed during the third lockdown,” LDC director Lucy Stainton said.  “With this in mind, and despite these percentages increasing significantly, we would argue that we have not yet seen the true impact of this third lockdown and this will only be obvious once the market has had the chance to reopen fully.  “This being said, the early indications from the first few weeks of the ‘unlocking’ have shown there is still significant demand for physical retail and eating out.  “Hopefully, as consumer confidence continues to build momentum with reduced Covid-19 cases, more of the population vaccinated and warmer weather, further fallout from the pandemic might be mitigated somewhat.”

 

Co-op to remove all plastic bags for life

The Co-op has announced it will remove plastic “bags for life” from sale in all of its stores in an effort to reduce plastic waste.  The supermarket said many shoppers are regularly buying bags for life to use just once, leading to a hike in plastic production.  More plastic is needed to produce bags for life than the conventional single-use bags.  The Co-op said the bags will be removed from circulation from the chain’s 2600 stores from today, with stock expected to be gone completely by the end of the summer.  It is part of its plans to remove 29.5 million bags for life – or 870 tonnes of plastic – from sale each year.  The initiative comes after Big 4 grocer Morrisons said in early April that it will scrap plastic “bags for life” and replace with tear-resistant paper bags.  “Increased use of bags for life has led to a sharp rise in plastic use,” Co-op Food chief executive Jo Whitfield said.  “With over 1.5 billion bags sold each year by retailers, this remains a massive issue for our industry as many shoppers are regularly buying so-called bags for life to use just once and it’s leading to a major hike in the amount of plastic being produced.  “We believe that it should be mandatory for all retailers to report on the sales of all of their reusable bags, not just single-use bags.  “Right now, Co-op is the only major retailer to report on all of the bags it sells.  “This policy would enable a fuller understanding on the impact of the levy and its true effect on shopping behaviours when customers are making decisions at the tills.”  Meanwhile, the cost of single-use plastic bags will double to 10p in England next month as part of the government’s new plan.

Amazon Q1 sales smash estimates rising 44%

Amazon has entered its “golden age” according to analysts after it blitzed expectations in the first quarter seeing sales soar 44 per cent to over $100 billion.

Amazon’s shares have continued their upward trajectory rising three per cent after the retail giant saw “margins gallop ahead” once again.

Over its first quarter Amazon saw net sales top $108.5 billion, coming comfortably above Wall Street estimates of $104.5 billion, while profit after tax more than tripled on the same period last year jumping from $2.5 billion to $8.1 billion, trouncing expectations of just $5 billion.

The higher profits were driven by a significant boost in services like Amazon Prime and Prime Video, which net far higher margins than its traditional retail offering which still saw growth of 37.4 per cent.

According to founder and chief executive Jeff Bezos “175 million Prime members have streamed shows and movies in the past year, and streaming hours are up more than 70 per cent year-over year”.

Meanwhile the group’s increasingly dominant cloud computing arm Amazon Web Services (AWS) also performed strongly, seeing revenues climb 32 per cent year-on-year to $13.5 billion.

Unlike its smaller rival marketplace Ebay, which also released results this week, Amazon expected the pandemic-led boom to continue into the next quarter, expecting sales to come in at between $110 billion and $116 billion, once again blitzing estimates of $108.6 billion.

This is largely due to plans to launch its Prime Day shopping festival a month early in June, helping boost its second quarter earnings considerably.

Despite a continued rapid roll out of physical stores, seeing three new Fresh stores open in London during the quarter alone, Amazon’s bricks-and-mortar store revenue dropped 16 per cent to $3.9 billion.

“Despite billions in extra costs associated with the pandemic, Amazon has seen margins gallop ahead. There are two main reasons for that,” Hargreaves Lansdown’s equity analyst Nicholas Hyett said.

“A huge surge in retail volumes in the US and abroad has boosted revenues to the point where they are more than covering the fixed cost base – a fixed cost base which is itself growing at breakneck speed as the group continues to invest in fulfilment infrastructure.

“The overall revenue mix is also shifting more towards service, now accounting for 47% of revenues compared to 44.5% a year ago. That might sound small, but service revenues are far higher margin and we suspect the 70% or so growth in advertising revenues is even higher margin than usual.

“This could be a golden age for the group. With high streets shut Amazon is a natural home for consumers’ spare cash, AWS services remote working, which has suddenly become the norm, and tech wizardry is all the more useful when we can’t see friends and family in person. It’s possible those tailwinds begin to unwind in the months ahead, and the golden age is followed by some dark years. Somehow we doubt it.”