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Out of recession but severe chill remains

Jessica Brown

There remains a real prospect the economy could go into reverse again

The UK may have officially exited its most severe recession since the 1930s this week, but that the economy grew by a weaker than expected 0.1% in the last three months of 2009 illustrates that the battle for consumer spend will rage on.

The bitterly cold and snowy start to 2010 has afforded retailers little respite - shoppers that did venture out have only been seeking full-on heavyweight winter merchandise, the bulk of which has already been cleared in the post-Christmas Sales while the rest is on deep discount.

Those retailers with spring 10 firmly out on the shopfloor (and there are plenty) will have been feeling a severe draught around the cash desk of late. While the weather is a contributory factor to slow spring merchandise sales, unless you are operating at the younger, trend-hungry end of the market there are still question marks over consumer confidence.

Headlines announcing the end of the recession will do something to lift the gloom, but there remains a real prospect the economy could go into reverse again in the first quarter of this year.

This last week has witnessed the collapse of Marks & Spencer lingerie supplier the Stirling Group and also the collapse of kidswear chain Adams, for the third time in as many years - a stark warning that times remain tough.

On a more cheerful note, the Prince of Wales has put his weight behind the fashion sector, bringing together suppliers and retailers to tackle the issues facing the wool industry.

While his mission will not be an easy one (see p8), having royalty behind British business can only deliver positives.

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