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December trading boost raises Christmas spirits

Retailers have reported a strong start to the vital December trading period after a lacklustre performance last month.

Retailers contacted by Drapers said that despite this week’s figures from the British Retail Consortium (BRC) that showed November clothing sales fell below the level of a year earlier when the banking crisis was in full swing, December’s early performance pointed to an upwards trajectory in the run-up to Christmas.

Aurora Fashions chief executive Mike Shearwood said he expected to be “pleased with Christmas”. He said: “We are very comfortable with current trading.” 

Nicky Dulieu, chief executive of womenswear retailer Hobbs, said: “On the last weekend of November – after payday – we saw a huge uplift in sales and it felt like people had waited until then to start their Christmas shopping.”

One menswear multiple added: “If trade continues the way it has been doing over recent weeks, then the picture looks good.”

Total retail sales values for November rose by only 1.8%, according to the BRC-KPMG Retail Sales Monitor, against dire figures for the same month last year.

Clothing sales levels dropped back below 2008 levels, with the mild weather affecting performance. Footwear sales during the month were robust year on year but weaker month on month.

Tony Brown, chief executive of department store chain Beales, said: “The BRC figures crystallised what was really happening out there, rather than what pundits were saying about rising sales. Clearly it’s still quite tough.

He forecast that Christmas would be “comparable to 2008” but said he expected no one to reach the level of sales in 2007. He said: “Most people will be happy to meet or match last year.”

One high street fashion retailer said conditions were “more encouraging out there” than the November BRC figures implied. He said: “There is a definite momentum building. Discounting is not the bloodbath of last year.

“Margins as a whole are slightly down but it’s been a good start to the period. In the last week we have seen footfall drop back but conversions rise, so it’s a good start but we remain cautious.”

The wary mood prevailed among some retailers, who said that a spike in Christmas spending would come late this year because of Christmas Day falling on a Friday. Customers are also expected to hold off on spending to wait for further discounts.

The chief executive of one womenswear chain added: “There’s a lot of promotional activity still going on out there and that will affect how we trade. Department stores said they would pull back on it this year but they haven’t. It’s too early to say how the next couple of weeks will go for us because we have just started discounting.

“This time last year there was ice on the ground whereas this week is mild, so we expect knitwear and outerwear sales to be weak.”

One value fashion retail chief added: “I’m not that excited about Christmas this year. We’ve got a fairly decent shopping week running up to Christmas, so people are able to leave it late. We expect a big spike in the last week. This week is starting to build nicely.”

How the big retail bosses are finding trade

John King chief executive, House of Fraser

“We traded better than the BRC figures in November, and December has started very strongly. We are on plan. It will be a better Christmas from a profit perspective because we are
doing less discounting.”

Colin Temple managing director, Schuh

“Trading is healthy and we are seeing strong like-for-likes. We are optimistic this side of Christmas. We will price ourselves right and aren’t going into Sale from a place of promotion, so I think Sale will go well too. The third week of January is when things will start to get tough.”

Touker Suleyman, owner, Hawes & Curtis and Ghost

“We were slightly up on the year in like-for-likes in November, but that’s compared with tough conditions last year. People may leave it later this year. They are a lot more astute than they used to be. They know when each retailer will go on Sale.”

Richard Kirk chief executive, Peacock Group

“We are looking for strong trading compared with last year. We will be at or ahead of 2007 levels. We found it tough in early November, but we strengthened at the end of the month and trade has
been excellent.”

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