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Business News

Retail fears persist despite boom


The beleaguered retail sector was today set to continue enjoying a post-Christmas shopping boom but experts warned it may not be enough to ensure some weaker players survive.

Retail analysts Experian said the number of people visiting shops on Boxing Day was 21.5% higher than a year ago as stores put on unprecedented numbers of discounts to drum up trade.

Shopper footfall was expected to rise further today, it added, as some chains that were not open on Boxing Day, such as department store John Lewis, resumed trading and others launched sales.

But fears persist that some of the biggest names on the high street are in danger of collapsing in coming days.

The sector has suffered a bleak year in which the squeeze in consumer spending was compounded by the rise in VAT to 20% and the warm autumn weather, which hit sales of winter clothing.

As a result, retailers have put on a frenzy of promotions in the run-up to Christmas and many are now dropping prices further.

Industry insiders say that despite reports of encouraging recent trading, some big-name players may not make it through the next few weeks, with many now due to pay their rent bills for the next quarter.

Anita Manan, an analyst at Experian, said: "It's good to see so many people visiting stores and the milder weather has helped.

"With the quarterly rent due, the difficulty is that they are selling a lot of stock at very low prices.

"What remains to be seen is if this quarter's takings are enough to see them through this difficult period to the next quarter."

High street lingerie chain La Senza, which has 146 stores and 18 concessions in the UK, announced last week that it plans to enter administration in coming days.

And Blacks Leisure, which owns 98 Blacks outlets and 208 Millets stores, has fuelled speculation that it would go into administration in a move that would allow rivals to cherry-pick its best assets.

The outdoor clothing group, which employs 3,600 staff, put itself up for sale following dire trading. But it signalled a so-called pre-pack deal was on the cards as it said it did not expect an offer for the group's shares, only for its trade, assets and brands.

However, many stores and shopping centres have reported strong trading in the post-Christmas sales.

Upmarket department store Selfridges said it had enjoyed record sales in the first hour of Boxing Day despite a Tube strike in London.

And queues were yesterday reported to have formed outside several Next stores after the fashion chain opened at 6am and offered all items at half price or less.

Kent's Bluewater shopping centre expects nearly a million visitors this week amid strong demand for as luxury items, such as premium-branded handbags and accessories, young fashion ranges, electricals and other big-ticket items.