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Ireland’s woes continue as womenswear sales slide

Womenswear retailers in the Republic of Ireland suffered a slump in sales in the last quarter of 2010 due to increased price competition, strong comparatives and dwindling consumer confidence.

In the three months to December 31, like-for-like sales of womenswear fell 8.6%, according to retail association Retail Excellence Ireland (REI), which surveyed 400 retailers, representing 2,500 stores.

The figure compared with a 3% drop in menswear sales volumes in the final quarter and a 3% rise in footwear sales.

REI chief executive David Fitzsimons attributed the dire performance from womenswear to shoppers trading down in the severe recessionary environment in Ireland and increased competition due to openings from retailers such as Forever 21, New Look and the expansion of mainstream branded womenswear mini chain Pamela Scott.

Fitzsimons said: “There is also significant encroachment into women’s fashion by the grocers and younger customers are more fickle.”

He added that menswear had been up against weaker comparatives because the category was hit much earlier in the recession. Footwear trade was boosted by the snow before Christmas forcing purchases.

Irish indies and retailers told Drapers they expected the downward trend in womenswear to continue in the face of falling consumer sentiment as the country contends with an E85bn (£72bn) bailout of the Irish economy and public sector job cuts.

Nora McDonnell, manager of contemporary womenswear indie Bella Sola in Newcastle West, which sells brands including Sandwich and Darling, said: “The next 12 months are going to be the toughest, with the cuts, budget announcements and less disposable income for consumers. I’ve bought less for spring 11 and cut back on more expensive labels, such as Carl Opik. I’m doing more with brands such as Pennyblack, which come in under E200 (£170).”

Fitzsimons said a critical milestone in gauging consumer confidence came in January, when the Irish government announced the imposition of a tax levy called the Universal Social Charge, which means those on an annual salary of E30,000 (£25,700) or more would pay an extra E200 (£170) a month.

Separately, upward-only rent rises for all commercial leases may be abolished after the Irish election later this month, meaning rents would revert to open market rates and tenants’ contracts would be open to negotiation.

In February last year, the Irish government abolished upward-only rent reviews for all new leases. However, the law was not retrospective, so tenants in existing leases did not benefit. Fitzsimons said a tenant who had been in the market for 10 years or more could see rents reduced by half if the law were to be enacted retrospectively.

Mixed fortunes

Like-for-like sales in three months to December 31

Womenswear -8.64%

Menswear -3%

Footwear +3%

Overall retail sales -3.63%

Average transaction -8% E41.67

Sales per sq ft -9%

SOURCE: retail excellence ireland

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