Year's end brings fresh job fears for high-street workers
Close scrutiny of Christmas trading figures will decide the fate of many struggling chain stores
Thousands of retail jobs come under threat this week, in what will be the high street's most critical period of 2012. After a festive bloodbath, which saw Barratts, the shoe chain, axe 1,610 jobs, the Tobar Group, owner of Hawkin's Bazaar, appoint administrators, and La Senza, the lingerie chain, prepare to follow suit, other high-street names could be pushed over the edge.
Shops pay their rents in quarterly instalments. The last due date was Christmas Day, but public holidays mean that a clear picture of which chains were unable to pay will not emerge until later this week.
Those chains that did pay up but traded badly through Christmas could find they have a cashflow squeeze. A spokeswoman for the British Retail Consortium said yesterday: "This is a critical time and more administrations are likely."
The consortium says that early Boxing Day trade figures look good – although discounting was the highest since 2008 – but it expects spending to drop in January. The trade body also expects that the number of retail jobs, so important in employing under-25s, will have fallen in the last three months of 2011. Between July and September, it found that retail employment was 0.8 per cent down on the same period in 2010, the equivalent of 5,780 full-time jobs.
On Friday, Deloitte, the Barratts administrator, failed to find a buyer for its concessions, which will now be closed. Barratts' 173 standalone shops are still up for sale. D2, the fashion chain based in Kilmarnock, closed 18 stores last week, resulting in 200 job losses. Past Times, the purveyor of retro-themed gifts, is expected to be one of the first to start the administration process this week. KPMG is believed to have been lined up as administrator.
La Senza will choose an administrator in the next few days. Firms have 10 days by law to make an appointment. The lingerie firm's UK franchise announced its collapse on 23 December, when former owner and Dragon's Den star Theo Paphitis described himself as "incredibly saddened" by the news.
Blacks Leisure, which owns 208 Millets stores and 98 more under its own name, is under threat as it seeks a buyer. However, a number of parties have put in initial offers, so there are hopes that most of the 3,500 staff could see their jobs saved. Second-round bids are due later this week, with Edinburgh Woollen Mill and Sports Direct International thought to be among the interested parties.
Again, KPMG is the administrator. Such roles are hugely lucrative for accountants: PricewaterhouseCoopers racked up £120m in fees in less than a year when it started work on unwinding the European division of Lehman Brothers.
Over the next few weeks, retailers listed on the London Stock Exchange will reveal how they fared over Christmas. Their figures will be heavily scrutinised by investors.
Next and Clinton Cards are first up. Clinton has been tested, with the card market remaining broadly static for years at £1.5bn, as competition has increased. Next is expected to be reasonably upbeat. The chain was one of the top three performing FTSE 100 shares in 2011, defying market conditions and lack of disposable income.
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