Department stores’ decision to move forward summer Sales could force other retailers to follow suit.
As many retailers contend with some of the worst sales figures seen this year, Debenhams and HoF will go on Sale on Thursday, forcing many to follow suit and placing margins under more pressure.
Fashion sales have been in the doldrums in the past two weeks as the feel-good factor felt over the sunny April bank holiday and the royal wedding period has worn off.
According to figures from BDO’s High Street Sales Tracker, fashion sales fell 10.4% in the week ending May 29. Within that, clothing sales slumped 11.2% and footwear sales dropped 4.9%. The performance was fashion’s worst so far this year, impacted by the strong comparisons from last year when scorching weather boosted sales.
The recent cooler weather is thought to have added to retailers’ woes as they contend with fragile consumer confidence. But the decision by Debenhams and HoF to go on Sale early is not thought to be a response to poor trading. Department stores fare better in poorer weather than their high street counterparts. HoF said this week that like-for-likes rose 4.1% in the 17 weeks to May 28.
During Debenhams and HoF’s Sale period, John Lewis will honour its ‘never knowingly undersold’ price promise. Sir Philip Green’s Arcadia Group, which includes Dorothy Perkins, Burton and Topshop, is expected to launch a 30% off seasonal promotion tomorrow. The group’s full Sale is thought to be slated to start on June 18. No comment was available from Marks & Spencer.
One high street retailer said that while he would not go on Sale next week, he had brought it forward by 10 days from July to clear poor-selling stock. He said: “Trade has been crap and I expect it to continue to be bad until the end of June. April was good but wasn’t good enough.”
He added that the underlying issue did not relate to poor product in stores: “We had a major April and we had the same product in stores then as we have in May.”
A womenswear fashion chief said last week’s fall-off in sales could also be attributed to shoppers waiting for summer Sales to start. He said: “Consumers are so promotionally driven. It could herald the end of the traditional Sale seasons as shoppers look for markdown at all times.”
One department store boss said: “I don’t know many people who are doing well. You have to follow [Debenhams and HoF]. They are big enough to lead the market.”
It is unclear how many of the concessionaires in both Debenhams and HoF will join in the Sale activity or, if they do, whether they will extend it to their standalone stores.
Michael Rahamim, chairman of womenswear chain Phase Eight, which has concessions in HoF and Debenhams, said he would go on Sale at the end of June as planned.