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Retailers fight back against credit crunch

High street retailers are remaining defiant in the face of the banking crisis and a downturn in consumer spending, amid fears the market will talk itself into a recession.
Fashion retail chiefs told Drapers they were concerned about how negative press surrounding the Northern Rock bank crisis and interest rate uncertainty would affect the top line, but vowed to ride the storm by pushing their value lines.

New Look chief executive Phil Wrigley said: “There have been interest rate rises, there are concerns about the housing market and debates that employment is not as robust as it was. On a micro level, these leave customers confused. It does hit confidence and will have a marginal impact.”

Marks & Spencer boss Stuart Rose said: “Retailers always worry about any serious disturbance in the financial markets, whether it’s equity value or interest rate rises. But hopefully cool heads will prevail.”
Norrie Stewart, chief executive of young fashion chain Internaçionale, added: “Most of our customers are young, so they aren’t affected by interest rates, but it does trickle down.”

The director of another value chain said: “People need clothes – if they are cutting their spend, they will opt to buy in places such as Primark. We saw something similar 10 years ago and the middle market was forced to lower its prices. Anyone who has recently put prices up may feel the pain.”

However, independent retailers were pessimistic. Clare Sherlock, owner of womenswear indie Gisele in the Wirral, Merseyside, said sales were down 25% on last year. “It’s going to be just as bad as spring was, but you have to be positive,” she said.

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