Blog: Has retail turned a corner?
Leonie Barrie | 5 October 2009
It has been a tough 18 months for Marks & Spencer, but better-than-expected second quarter sales revealed last week suggest the worst could at last be over for Britain's biggest clothing retailer.
UK like-for-like sales fell by just 0.5% in the second quarter, while clothing revenues rose by 2.7%, helped by the successful launch of the new Indigo casualwear line. Importantly, the retailer also kept its clothing market share at 9.7% - which is on a level with last year.
Admittedly the figures benefit from being measured against a very volatile quarter last year, when retailers and consumers were absorbing the full ramifications of the banking crisis. But they also prompted the normally cautious executive chairman Sir Stuart Rose to note: “Consumer confidence has reached the bottom. People feel better about life.”
Meanwhile at sportswear giant Nike, cost-cutting made up for falling sales and helped first quarter profit hold steady at US$513m, fractionally up on last year's figures. Revenues fell 12%, to $4.8bn, with markets in all parts of Europe suffering most during the economic downturn. The company also said futures orders for the period to January 2010 were down 6% on last year at $6.2bn, with central and Eastern Europe again hardest hit.
But while there was little to get excited about in the results, an aggressive programme of cost-cutting and a higher share of the crucial US footwear market bodes well for Nike's prospects when the longed-for recovery hits the US.
In contrast, the battle for survival continues at beleaguered UK outdoor apparel retailer Blacks Leisure, which has unveiled plans to shut 89 loss-making stores and make 20% of its head office staff redundant. The announcement marks the second stage of a restructuring plan which has already seen the retailer place its Sandcity business in administration.
Following in the footsteps of British designer Matthew Williamson and Comme des Garçons designer Rei Kawakubo, iconic French designer Sonia Rykiel will produce the next guest collaboration for Swedish fashion chain H&M. The designer venture will for the first time extend into lingerie, as well as including Rykiel’s signature knits.
And British fashion retail guru George Davies has made a return to the high street with GIVe, his newest venture promising affordable luxury and unrivalled in-store service. Davies, the man behind Next, George at Asda and Marks & Spencer's Per Una range, has reportedly invested GBP20m (US$32m) into the UK business, the fourth major fashion retail brand of his long career, which targets women aged over 30.
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