John Lewis modernises offer, adds 30+ new fashion and beauty brands
John Lewis has announced the addition of 30+ new brands to its fashion, accessory and beauty offer for the autumn season. They’ve already begun appearing in-store and online with the debuts set to continue into October.
The company said the selected brands have been chosen because “they respond directly to the new needs of the nation as customers are opting for more casual wardrobe choices and these brands will help modernise John Lewis’s offering”. The launches also include the debut of a new athleisure category, including Athleta, Adidas by Stella McCartney, Isle Jacobsen, Hornbaek and Calvin Klein Performance. So far, “the products have been incredibly popular, with sales exceeding expectations,” we’re told. Fashion Director Christine Kasoulis said: “As part of the work we’re doing to modernise John Lewis, we’re introducing new brands that we feel really resonate with the needs of our customers at this current time, whether that’s comfortable, stylish loungewear that’s smart enough for a Zoom call, or skincare products that enhance their natural complexion. Our aim is to be the preferred fashion partner for brands.” New labels in womenswear that have already launched or are due this month include The Fold “luxury business attire”, online brand Sosandar, Ganni footwear, Serena Rees’s Les Girls Les Boys label, luxe UK footwear brand Malone Souliers, Fila trainers and Fat Face. Next month will also see the arrival of Their Nibs, which is a small British pyjama brand with hand-designed prints, plus UK-made sheepskin slippers label Celtic & Co. Accessories debuts include Longchamp, plus jewellery by Dinny Hall, Astrid & Miyu and Wanderlust + Co. There’s also Goddess Charms and sustainable label Togetherband, New beauty arrivals take in Beauty Tech (which has introduced upscale beauty from MZ Skin, Foreo, Dermaflash and Beglow), plus Olaplex high-end hair treatment and Kate Somerville skincare. There are also some menswear launches with the arrival of New Balance, an exclusive-to-John-Lewis Barbour Wilderness Collection by Ben and Marina Fogle, and Soho Vintage store Dukes Cupboard. And in addition to this, the retailer has ramped up its sports offering with the addition of Peloton, Apex Bikes and Arcteryx high-performance apparel, outerwear and equipment.
Primark bounces back, but global city centre stores still slow
Primark’s owner had good news on Monday as Associated British Foods said trading in Q4 “exceeded expectations”.
The company issued an update ahead of its year-end on September 12 and said that with all Primark stores having reopened from May to July, Q4 trading has been “strong”. In fact, in the latest four-week UK market data for sales in all channels, Primark achieved its highest-ever value and volume shares for this time of year. Not that everything is perfect. The company still has a lot of catching up to do as it doesn’t sell online and so was losing hundreds of millions of pounds in sales every moth during lockdown. And company-wide earnings will be down significantly year-on-year. It also said total customer spend on clothing, footwear and accessories in its markets has been impacted by Covid-19. Yet the story on trading is undeniably encouraging. Cumulative sales since reopening to the year-end are expected to be £2 billion and Primark’s own adjusted operating profit on an IFRS16 basis for the year, before exceptional items, is now expected to be at least at the top end of the previously advised £300 million-£350 million range. The company also said the average basket size was initially significantly higher, reflecting some pent-up demand. And while this outperformance has reduced in recent weeks, it remains higher than a year ago. Primark has managed to avoid an excessive level of markdowns too. And while normality still seems to be a long way away for many companies, ABF said that compared to pre-Covid, Primark’s sales performance since reopening “has in aggregate been reassuring and encouraging”.
STRUGGLING CITY CENTRES
The performance by each store has varied however, “reflecting the current circumstances of our customers, including increased home working, less commuting and much less tourism”. Sales in retail parks are higher than a year ago. Shopping centre and regional high street stores are broadly in line with last year. But large destination city centre stores, which are heavily reliant on tourism and commuters, have seen “a significant decline in footfall”. Its 16 largest destination city centre stores contributed 13% of total sales pre-Covid and only 8% of sales after reopening. The impact on these once-mighty stores can be seen from the fact that in the UK, sales since reopening are expected to be 12% lower on a like-for-like basis, but if the four large UK destination city centre stores are excluded, the decline is a mere 5%. Meanwhile sales in Europe are expected to be 17% lower on a like-for-like basis, reflecting increased public health restrictions, particularly in Spain and Portugal. Again, the city centre impact is key and excluding its 11 destination city centre stores, like-for-like sales are down 13%. Sales in the US are expected to be 9% lower on a like-for-like basis but are actually 2% ahead excluding its Boston store. There was good news on the exceptional charge of £284 million against inventory that it noted at the half-year stage. The “earlier than expected reopening of the stores and stronger than expected trading over the summer has allowed us to sell the stock in-store and a significant proportion of the stock on hand,” it said. As a result the book value of SS20 inventory that will be carried into next year is now expected to be only some £150 million and total year-end inventory levels will be much lower. The cash generated by the sale of this stock on hand is the major contributor to its better net cash balance at the year-end. It also said current orders being placed are benefiting from recent weakness in the US dollar. On store openings, the firm said the programme planned for the second half has been understandably delayed. But since its last trading statement a further three stores have been opened: Plaisir and Belle Épine in Paris and Warsaw, Poland. Initial trading has been “very strong, particularly in Warsaw”. It also opens a new store in Strasbourg, France on Tuesday.
Dixons Carphone to offer 24-hour shopping
Dixons Carphone has said it is seeking to bolster its ShopLive offering to include extended operating hours, bookable appointments and livestream shopping. ShopLive, which was launched earlier this year, connects online shoppers with in-store colleagues to allow them to view demonstrations of products from the comfort of their own home. The technology retailer has served around 340,000 customers over the last five months via ShopLive, which has reached more than 56,000 sales. Dixons Carphone is currently trialling a ’dark store’ concept in its Birmingham training facility as it seeks to operate ShopLive outside ordinary shopping hours. The retailer said this offering will allow for more flexible working hours, which has proved significant during the Covid-19 pandemic. The ShopLive initiative could also be bolstered by making video consultations bookable to ensure customers can be served at a time convenient to them, as well as livestream shopping. “Clearly our stores have a massive part to play in our future – they drive really engaging experiences, they enable people to work out, afford and ultimately enjoy technology,” Dixons Carphone chief information officer Andy Gamble said. “Where we see ShopLive going is to enable us to mimic an in-person shopping experience, with extended hours – as clearly that can bring some differentiation from our physical stores – but equally to give people the seamless experiences they want.” Dixons Carphone has more than 250 staff members trained to operate ShopLive and said it will be offering the initiative on all its online items. It has launched a pay-live option, which allows customers to make transactions within the video chat as well.
Surge in online shopping over lockdown thanks to 102% rise in online supermarket shops
Consumer spending grew 0.2 per cent year-on-year in the month of August, thanks to a 102.7 per cent year-on-year rise in online supermarket shops. New data from Barclaycard found consumer spending in Britain enjoyed its first uplift since February 2020. Year-on-year, the nation spent 5.1 per cent more on essential items, largely driven by supermarket shopping which was up 14.9 per cent. Spending on non-essential items contracted 1.6 per cent – the smallest fall since the onset of lockdown – as the nation became more comfortable visiting stores.
Despite a steady return to the high street, Barclaycard’s data suggested the months of lockdown have accelerated a sustained shift towards online shopping.
The highest category increases were seen across supermarkets, which reported a 102.7 per cent year-on-year rise as the popularity of online food orders prevailed, and online clothing, which grew 24.3 per cent.
While the nation’s confidence in the UK economy has fallen to its lowest (19 per cent) since Barclaycard started the Index six years ago (compared to 42 per cent in January and February 2020), confidence in household finances remains steady at 68 per cent, attributed to many households putting off holidays and trips abroad.
“It’s encouraging to see the first uplift in spending after such a turbulent time for retailers. It seems the final throws of summer have spurred households to get out and about with clothing stores, pubs and bars welcoming growth for the first time since lockdown began,” said Barclaycard head of consumer products Raheel Ahmed.
Last month Nielsen revealed UK shoppers spent £678 million more on FMCG products during July, but online sales accounted for a whopping 97 per cent of this growth, equating to £658 million.
This led to a rise of 117 per cent in July, with online grocery sales achieving a record 14 per cent of the market share.
Pent-up demand leads to additional sales of £19m at ScS
ScS has reported that “pent-up demand” from customers spending on their homes during the Covid-19 lockdown led to additional sales of £19 million. Shares at the furniture firm, which employs 1700 people and has 100 stores across the UK, rose in early trading after announcing strong trading. Post-lockdown trading has “remained strong”, with a like-for-like order intake growth of 51 per cent for the six weeks to September 5, 2020. Group order intake rebounded to 92.2 per cent of last year’s levels in the period from May 24 to July 25. ScS temporarily closed its store and distribution network from March 23 to May 23 due to the government-mandated lockdown. “We believe current performance continues to benefit from pent-up demand and an increased investment by UK consumers in their homes,” ScS said. “This growth, which is equivalent to £19 million of additional revenue, has significantly exceeded our expectations and the board continues to be encouraged by recent trading. “The group is well positioned, with our value led proposition being underpinned by a strong balance sheet.” Last month, ScS said it was “encouraged” by store reopenings as orders skyrocketed 92.2 per cent. However, store sales plummeted by 92.5 per cent during the lockdown period.
Halfords sales rise buts remains cautious due to covid19 uncertainty
Halfords has seen its sales rise as the Covid-19 pandemic created a surge in demand for its cycling and motoring offers. The retailer recorded a five per cent increase in like-for-like sales across its portfolio in the 20 weeks to August 21, driven by a 160 per cent rise in online sales. Cycling revenue rose by 59.1 per cent on a like-for-like basis, while service-related sales rose 6.3 per cent as the retailer benefited from shoppers commuting by bike. Halfords said it is currently on track to deliver a 300 basis points uplift to its gross margin in its current financial year. Meanwhile, its autocentres division saw a 30.2 per cent rise in revenue during the period thanks to the rise in online sales. Halfords expects half-year profits to be in the range of £35 million and £40 million. However, it warned that “significant uncertainty” remained about its performance in the second half of its financial year due to a drop in cycling sales during the winter months. “We are pleased to have delivered a strong trading performance during the period,” Halfords chief executive Graham Stapleton said. “We have been able to move quickly in order to capitalise on the continued strong demand for cycling products, with sales of electric bikes and scooters up 230 per cent year on year, while cycling services have been boosted by our free 32-point bike check and the government’s Fix your Bike Voucher scheme. “We have also seen a return to growth in our motoring business, driven by an increase in car journeys and by a high level of demand for staycation-related products such as roof bars and roof boxes. “It has been especially encouraging to see our investments in key strategic initiatives both drive and enable such a resilient performance, allowing us to capitalise on favourable market shifts. “In the last 12 months we have tripled our investment in the ongoing development of our web platform to enable a dramatic shift to online ordering, with sales up 160 per cent year on year and representing 54 per cent of total revenue in the period. “However, there is still significant uncertainty around the impact of Covid-19 and the macro-economic environment in the coming months, and as a result we are cautious on the outlook for the remainder of this year. “Looking further ahead, we are confident in the long-term strategy of our business and in the growth prospects of the cycling and motoring markets in which we operate.” Last month, Halfords appointed former Moss Boss finance director Tom Singer as a new non-executive director. Singer’s stint at Moss Bros was between 1997 and 2000, but more recently he was InterContinental chief financial officer and Bupa group finance director.
Ocado appoints tech expert to the board
Ocado Group has appointed Michael Sherman as an independent non-executive director to its board.
Sherman also currently works as chief strategy and transformation officer at BT Group.
Previously he led the technology, media and telecommunications practice as partner and managing director at Boston Consulting Group, where he worked for 11 years.
“I am delighted to welcome Michael to our board. He has extensive experience and skills in the technology sector, and I am confident his insight and expertise will be an invaluable asset to the board and our continued growth and development as a technology led software and robotics platform business,” said Ocado chairman Stuart Rose.
The appointment comes as Ocado this month launched its new partnership with Marks & Spencer, replacing its previous, long-standing tie-up with Waitrose.
Despite only launching with M&S as its partner on September 1, the online-only grocer was forced to stop deliveries to its own staff as it worked to clear a backlog of orders following the launch of Marks & Spencer on its platform.
Ocado was also forced to apologise to customers after a “surge in demand” meant it had no choice but to cancel orders just hours before they were due for delivery.
Tiffany & Co to file lawsuit after LVMH exits £12m takeover deal
Tiffany & Co is suing Bernard Arnault’s French luxury conglomerate LVMH after it called off its proposed $16.2 billion (£12.41 billion) acquisition of US jeweller Tiffany & Co. LVMH cited “recent developments” including a request from France’s Foreign Affairs Ministry to delay past the deal’s closing deadline. This was due to a US plan to impose tariffs on a variety of French and European goods. Tiffany & Co argued that it was made aware of the latest development on Tuesday and that it is not reason enough to pull out of the deal. After months of speculation, the Louis Vuitton owner issued statements to diffuse speculation that it planned to buy the jeweller’s shares on the open market. The lawsuit was filed after LVMH issued a statement saying it would not proceed with the acquisition. “We believe that LVMH will seek to use any available means in an attempt to avoid closing the transaction on the agreed terms,” Tiffany & Co chairman Roger Farah said. “We regret having to take this action but LVMH has left us no choice but to commence litigation to protect our company and our shareholders.” The jeweller is seeking to legally compel the French conglomerate to see the deal through.
Klarna in talks with investors over $10bn valuation
Klarna is said to be in talks with investors for a new round of funding which would value the Swedish payments company at more than $10 billion, according to Reuters.
Citing three sources, Reuters reported Klarna now has expansion into the US in its sights, which is on track to become its largest market.
The “buy now, pay later” specialist plans to raise just over $500 million from a combination of old and new investors, with a deal reported to be announced in the coming days.
A spokesperson for Klarna declined to comment to Reuters on the plans.
Earlier this week Klarna launched a new app offering customers personalised content and “bringing together all the best aspects of shopping in one place”.
On Monday the Swedish payment giant unveiled its newly overhauled shopping app, aimed at meeting the shifting expectations of consumers brought on by the pandemic.
According to Klarna the app will now cover the entire shopping journey, from discovery through to a final purchase.
It’s thought Klarna plans to file for an initial public offering in the US within the next two years, with its latest funding round likely to be its last before the potential IPO.
Tesco will trial drone deliveries from October
The UK’s biggest retailer on Wednesday said it would start trialing grocery home deliveries with drones from October.
As part of a virtual event on Wednesday, Tesco’s chief executive Dave Lewis said the business was considering new ways to reach customers, and that it will launch the trial in Ireland, where partner Manna already has a licence to operate.
“They (Manna) have already proven the capability, the question is how do we take that capability and apply it to Tesco and that’s the detail that’s been worked on now before we get to the trial,” Lewis said during a webcast Tesco hosted on “disruptive innovation”, Reuters reported.
Tesco’s group innovation director Claire Lorains said the trial would initially focus on the delivery of just a few grocery items, such as forgotten recipe items, with deliveries made within 30 minutes to an hour of being processed.
“We’re really interested to see how drones could be part of the solution to deliver to our customers on-demand small baskets,” she said, noting the small basket market in Britain was forecast to exceed £10 billion ($13 billion) over the coming years.
“If our trial with Manna is successful, we really think there is an opportunity to reach many customers through our stores extending with a drones service,” Lorains added.
Lewis said Tesco now has four innovation priority areas: food & drink products and technology; data; robotics and automation; and packaging.
In a separate announcement on Wednesday, the retailer detailed its new Tesco Red Door project, in which it will invite innovators with new products, ideas or emerging technologies with “the potential to cause disruption in the future” to contact its newly established Group Innovation team.
Tesco said it is looking to work with innovators to help Tesco in areas “beyond day-to-day operations”, with what it describes as “a focus on ideas that can create true competitive advantage for Tesco and improve the way it serves shoppers”.
Games Workshop beats expectations as shares rise 19%
Games Workshop has seen its shares rise by 19 per cent after the retailer recorded an uptick in sales in its most recent quarter. The Warhammer fantasy figurines retailer said trading for the three months to August 30 was ahead of the board’s expectations. It recorded sales of around £90 million compared to £78 million for the same period last year. Meanwhile, operating profit for the period was around £45 million, almost double the £28 million a year ago. Games Workshop said it will pay out a 50p-per-share dividend to its investors after shares hit £10.42 in early trading. Its market value reached £3.2 billion, which placed it above Marks and Spencer. The company said thanks to its online and trade channels, it has recorded a steady growth during the period. However, it noted that shops remain quiet after being forced to close during the coronavirus lockdown. “The longer term impact on the group as a result of the ongoing pandemic is still unknown,” it added. Ahead of the AGM next week, Games Workshop said that the current financial year was still in its early stages. Chief executive Kevin Rountree said that the last financial year, which ended in May, was the best period of trading in the company’s history after it reported a five per cent rise in revenues and a 10 per cent rise in pre-tax profits. Games Workshop operates 531 stores in 23 countries, of which 411 are run by only one employee. Last year, its physical retail stores accounted for around 30 per cent of sales.
Lockdown prompts Dixons Carphone's online sales to surge 124%
Dixons Carphone has said that online sales in the UK and Ireland have massively outperformed its markets in mainland Europe, as British stores were forced to close during lockdown. For the quarter ending August 29, overall online sales skyrocketed by 124 per cent in the retailer’s core UK and Ireland market, while like-for-like sales rose 12 per cent. During the first half of the quarter, UK and Ireland online sales more than tripled amid the lockdown and rose 122 per cent in the latter half. Meanwhile, when stores reopened in the latter half of the quarter, Dixons Carphone’s overall sales were up 20 per cent. In the Nordics, online sales rose by 49 per cent, while they increased by 115 per cent in Greece. Stores were open throughout the period in both markets. “Online has continued to power ahead: in the UK and Ireland alone we grew online sales by more than £500 million in four months, growth that stayed strong even as stores reopened,” Dixons Carphone chief executive Alex Baldock said. However, rises in one area were largely offset by falls in others, as shop sales plummeted during lockdown. As people avoided airports and railway stations to avoid the spread of the Covid-19 virus, Dixons Travel Stores saw their sales plunge by 90 per cent. Overall, like-for-like sales increased by 14 per cent. The retailer said that despite what looks like strong trading at the moment, it is uncertain over its outlook for the year. It added that it was considering a plan to list a minority stake of its Nordics business on a public market. Baldock said the listing would allow Dixons Carphone to get a better grip on the value of its Scandinavian subsidiary. It has become the market leader in every country where it operates. A potential initial public offering would take place next year, with Dixons Carphone selling a minority stake, while keeping the subsidiary under the group. “We’re also in the early stages of exploring the option of listing a minority stake of our Nordics business next year,” Baldock said. “This would shine a light on the value of the Nordics business whilst retaining it as part of the group.”
Matalan CEO Jason Hargreaves steps down
Matalan chief executive Jason Hargreaves is set to step down from the helm after seven years leading his family’s value retail business. Hargreaves will still remain with the fashion and homewares chain but in a different capacity, as a strategic adviser for the board. He is the Matalan owner John Hargreaves, who founded the retailer in 1985. Steve Johnson, who recently replaced John Mills as Matalan chairman, will lead the board as executive chairman from next week. He will oversee the day-to-day operations of Matalan alongside chief commercial officer James Brown. “After seven years at the helm, now is the right time for me to step down as the CEO into my new role,” Hargreaves said. “Providing our customers with the best value product on fashion and home is our heartland, and re-establishing this under my leadership has been a huge achievement. “The board under Steve’s leadership are now set up to continue this journey, and the recent addition of James Brown as our new chief commercial officer will provide the leadership on the trading floor to ensure we continue to grow from the strong base we have today.” Johnson said: “We would like to sincerely thank Jason for his leadership during his time as our CEO. “Since joining, I have been impressed by the culture that Jason has created, and we are delighted that he will continue to provide strategic counsel to us. “His extensive knowledge, business relationships and experience will help to ensure the core family values remain embedded in the business. “Over the past few years, Jason and the team have been successfully evolving the business and, despite the market challenges we are currently facing, we look to the future with confidence.”
Intu Derby becomes first of 17 centres to be snapped up since administration
Intu Derby has become the first of 17 Intu shopping centres to change hands since its parent company failed to agree terms with creditors in June. A firm backed by the London-based Kuwait Investment Office has taken full ownership of Intu’s Derby shopping centre. The move comes after Cale Street Investments paid £186.3 million last year for a 50 per cent stake in the unit, though the price paid for the shopping centre remains disclosed. The firm said that the site will be known as the Derby Centre for the time being, and the building will be rebranded within the next few months. “This is the first Intu centre to migrate to new management and ownership following the administration of the Group’s Topcos back in June, and as such marks a key milestone in the administration process,” Intu joint administrator Jim Tucker said. “To have achieved such a smooth and orderly handover in such a short timescale is a testament to the hard work and commitment of everyone involved, not least the Intu Derby employees who have continued to work with enthusiasm and professionalism throughout the administration.” Meanwhile, property firm Savills and former Capital & Regional executive director Ken Ford will be responsible for the management and day-to-day operation of the Derby Centre. Ford said: “The fundamentals of Derby remain strong and I am looking forward to working with the team to develop a repositioning strategy that will ensure the centre can continue its positive trajectory. “The centre enjoys high levels of interest from national brands, thanks to its strong catchment and footfall, and our plans will only help further this potential.” Intu Derby purchased the centre from Westfield which opened the shopping centre following a giant refurbishment of the former Eagle Centre in 2007. It now attracts an annual footfall of more than 21 million and the space is more than 90 per cent let. There are over 200 shops, including Next, Zara, H&M, M&S, Hugo Boss, Whistles, The Disney Store, Lush and JD Sports at the centre. Intu Derby general manager Adam Tamsett said: “The centre has proven extremely resilient in recent months with an occupation rate above 90 per cent. “The new management team will help build on this success to develop a new vision for the centre, and the onsite team are optimistic about the opportunities that lie ahead.” Derby Centre said that while the name has been changed, a full rebranding project is underway “which will take a few months to complete”. Moreover, the Intu Derby logo will remain across the building for a short period of time.
McArthurGlen Cheshire Oaks launches Dropit
‘Hands-free’ shopping options have taken on a new relevance in a world dominated by anti-pandemic measures and on Thursday, McArthurGlen said it has launched a partnership with pioneering app Dropit to offer its hands-free shopping service to visitors.
It’s being launched at one of the largest outlet malls in Europe, the Cheshire Oaks Designer Outlet, with shoppers now able to use it to lighten their load while shopping and have their items delivered to their home or another address.
Dropit will collect shoppers’ bags from more than 100 partner stores within Cheshire Oaks, including Polo Ralph Lauren, Belstaff and Gap. All stores at the site will accept such bags, with a “Dropit ambassador” being notified when a bag has been dropped and then collecting and collating on behalf of the shopper.
They can then choose to have bags delivered to a preferred location at a time convenient to them, with delivery to homes, hotels and workplaces nationwide. There’s also a same-day delivery option to addresses within The Wirral, Chester City Centre and Runcorn areas.
Retail locations are pulling out all the stops to encourage consumers to return to physical shopping and a service such as Dropit could boost this. It allows consumers to move around with being weighed down by bags, keeping their hands free for essentials such as sanitising when they enter or leave a store, and also minimises contact with staff within the stores.
The service has been used successfully by another outlet specialist, London Designer Outlet at Wembley Park, for some time. And while the focus pre-pandemic was all about convenience, it has stressed the safety element more recently and said that Dropit played a part in its strong bounce-back figures since non-essential stores reopened.
The Dropit app is free to download and McArthurGlen said the service is priced at £10 for hands-free shopping for collection on-site and £15 for hands-free shopping with nationwide delivery. Either option allows an unlimited number of bags to be dropped and delivered throughout the day.
Insights captured by Dropit’s data analysts also report that consumers “feel safer and more comfortable visiting stores and enjoying dining and leisure facilities when they no longer have the hassle of carrying bags”.
Article of the week - Tesco will trial drone deliveries from October
Question of the week - With footfall trends showing local shopping increasing, will we see a possible revival of our High Streets?