March Newsletter….the month of “doom”….Can things get better?

April 9, 2011

Retail this month has seen big developments within the fashion industry as well as some bold moves made by bigger retailers to revitalise the high street.

We had the case of JJB, which saw them once again, slip ever closer to the depths of liquidation – like they had done in the past they pleaded with shareholders to bail them out. Luckily for them they did find aid in the form of America’s richest man, Mr Bill Gates, who has shares in the sports retailer as well as some much-needed pity from the Bank of Scotland.

Following on from the news of JJB’s ‘near-death experience’, HMV chief-exec Simon Fox blasted critics who claimed the electronics retailer was facing a “premature death”. Their decline in profit saw them come under some criticism, but they hit-back at critics stating that they were working on a solution.

The ‘download revolution’ having an obvious affect on their sales meant that they would look into selling more technical goods to counter the threat made by the rise of ‘easy-access media’.

Managerial decisions were made elsewhere in retail as New Look chief executive Carl McPhail was ushered out of the door by his less than impressed superiors. The fashion retailer also saw a decline in profit, which meant someone in the business had to get the chop; unfortunately for McPhail he was first in line. McPhail blamed allegations made against New Look by Channel 4’s ‘Dispatches’ programme, which revealed the appalling work environments used by the high street brand, to be the cause of a drop in sales.

Tesco’s were left red-faced as their Price Check scheme launched at the beginning of the month seriously backfired, as customers found a loophole, which meant they could make hundreds of pounds in vouchers. Customers used comparison websites to exploit the promise made by Tesco, that if your shop costs less in Asda they would give you vouchers equivalent to double the difference. One customer claims to have made £600 out of the flawed scheme.

The high street suffered more damage at the end of the month, both financially and physically as an angry mob of protestors took the fight against government cuts to the West End. Protests quickly turned to riots as shops were damaged and left with no other choice than to close doors for the day. The financial damage recorded a £5m loss in profits for the day, whilst the cost of repair is still being assessed.

Finally, Dixons issued a profit warning as customer cutbacks started to take its toll on the electrical retailer. The original £100m profit before tax and one-off items that the forecast in January is looking more like £85m as consumers cutback on expenditure.

All in all it’s been a bit of a doom-and-gloom month for retail, but given the current state of the economy, tough times were predicted. As D:Ream once said; things can only get better!