Retailers fuel fresh gloom on high street

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The Independent Online
THERE WAS a fresh crop of bad news from some of Britain's largest retailer's yesterday just a day after official retail figures showed that sales in November had been stronger than expected.

Littlewoods, the retail and football pools group, questioned the Government's statistics and said its own experience showed that there had been "a marked slowdown in sales over the last two months".

Barry Gibson, Littlewoods chief executive said: "The Government's [retail] statistics are notoriously unreliable. They often have to be revised a couple of months later. Our figures show that things began to change in July and the consumers have stayed cautious, in spite of retail statistics coming down. The slowdown is across the board, across all our retail businesses."

His comments echoed statements made by John Lewis, which said that its department store sales in the week to 12 December were "substantially short of estimates". The figures were 3 per cent down on the same week last year.

Elsewhere, Harveys Furnishings, the textiles and furniture group reported flat profits for the six months to October and underlying sales down 4.7 per cent in the same period last year. While sales of smaller-ticket textile items such as bedding and curtains have proved resilient, furniture sales are down sharply.

"Big ticket merchandise like furniture are deferrable purchases. People make do, " said Rod Templeman, Harveys managing director. "Consumers may change their habits when the new annual interest rate changes come into effect in January . But my worry is the feel bad factor. People are worried about losing their jobs and that will stop them spending."

UNO, the rival furniture retailer, has also suffered. Its shares plunged 20 per cent to a new low of 32.5p yesterday, compared to their 272.5p level at the beginning of the year. The shares fell on a well-informed market source that one of its largest institutional shareholders had sold its entire holding of around 650,000 shares at just 20p, half the then market price.

Littlewoods said it is now three years into a five-year recovery plan but still has no intention to float the business. "We have no plans, not for the foreseeable future unless the shareholders [the Moores family] change their minds."

The comments came as Littlewoods reported retail trading profits pounds 5.5m lower at pounds 33.7m for the six months to October. The high street Littlewoods stores recorded a loss of pounds 6.4m in the period after the sale of 22 of its stores to Marks & Spencer.

A restructuring programme is expected to deliver savings of pounds 50m over the next three years as it integrates head office functions and de-layers management roles.

The trial of stores under the Berkertex name will be dropped in January and all stores will continue to trade under the Littlewoods banner. But the merchandise will be adjusted to offer women's clothing aimed at 35 to 65-year-olds.

The agency mail order business recorded flat profits but losses were reduced by 10 per cent at the Index store and the Index Extra direct catalogue.

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