Up to 15 regional and national retail chains face going bankrupt within the next month, insolvency experts warned yesterday, as one of the largest post-Christmas sales for decades got under way today.
Shops have reduced their prices by up to 90 per cent for the Boxing Day sales, potentially saving shoppers thousands of pounds on "big ticket" items such as sofas, televisions and kitchens. Retail experts said the price-cutting is deeper and broader than in previous years as chains seek to offload seasonal stock and improve cash-flow ahead of what promises to be a tough new year.
More than a dozen retail chains have gone bust this year, including SCS, Rosebys, Dolcis, the Works, MK One and, more recently, MFI and Woolworths.
The corporate rescue and recovery specialists Begbies Traynor said it would "not be surprised" if 15 regional or national chains collapsed before the end of January, unable to pay rent for the first quarter of 2009.
Zavvi, Britain's biggest entertainment retailer, which was put into administration on Christmas Eve, intends to open today, offering shoppers bargains on CDs and DVDs. The failure of the re-named Virgin Megastores was blamed on "dire trading conditions" and the collapse of its CD supplier, Entertainment UK, last month along with its owner, Woolworths. Zavvi employs 2,363 permanent and 1,052 temporary staff. Administrators hope to save as many of its 125 British stores as possible.
On Tuesday, the 122-year-old Whittard tea and coffee chain, which employs about 900 people, was placed into administration and then rescued by a buyer. The Officers Club, a 160-outlet menswear chain, experienced the same fate.
Matthew Sherwood, a senior economist at the analysts Experian, said he did not see "too much hope" for retailers in 2009. "I think it's going to be a very bad year for retailers and we're likely to see more announcements like we've seen with Woolworths and MFI," he added.
A retail consultant, Karl McKeever, the brand director at the Visual Thinking consultancy, said the level of discounting would depend on how stores had traded in the run-up to Christmas. "I think it's quite a mixed picture. There are some chains which have done particularly well in the Christmas period and their sales will be pretty similar to previous years – end-of-year clearance. However, there are other chains which have fared less favourably and they will be going in a lot harder and quicker.
"But I would say that across the board customer sentiment is such that companies will have to liquidate their stock quite quickly, which is why many chains started a full sale before Christmas Day. What that means for consumers is that there will be a huge level of bargains to be had and probably a steeper level of discounting than previously." He advised consumers to look closely at sale banners to spot exclusions such as "up to" or "not all departments apply".
He added: "I would always urge caution – be a responsible shopper. Don't max-out on your credit cards now and find out you are in trouble further down the line. Don't bargain too hard with small retailers because it may land them in trouble and if they go down it will be bad for all of us ... [But] I think consumers are definitely in for a good time, if they've still got money in their pocket."
Commentators said that specialist chains, particularly those selling "big ticket" items such as furniture, kitchens, bathrooms and electrical equipment, would discount heavily.
Debenhams was launching what it said was its "biggest-ever Boxing Day sale". The department store chain, which has 153 outlets, said: "Debenhams is pulling out all the stops to offer shoppers value for money at a time when they need it the most by reducing prices on the largest number of products at one time in its 219-year-history."
House of Fraser and Selfridges were cutting price tags on designer fashion ranges by up to 70 per cent. B&Q was offering all its kitchens and bathrooms at half-price and Halfords has reduced the price of many of its bikes by 60 per cent to £90 or less. The electricals chains Dixons and Currys were opening their doors to bargain-hunters, with generous discounts expected on plasma televisions, DVD players and MP3 players.
Tesco, Asda and Sainsbury's were opening hundreds of their larger stores. At 179 of its "Extra" supermarkets, Tesco will cut the price of 50,000 televisions and 25,000 laptops and PCs. Tomorrow, Marks & Spencer and John Lewis are launching their sales. M&S is closed today, but the country's biggest clothing retailer is opening its stores at 6am tomorrow, offering up to 50 per cent off clothes and beauty products. Stuart Rose, the M&S chairman, said: "Customers always look to bag a bargain after Christmas and we know that's going to be particularly important this year."
The Welsh soprano Katherine Jenkins will open the Harrods sale tomorrow. The biggest discount is a handmade carpet reduced from £11,999 to £4,795. Harvey Nichols is offering up to 50 per cent off Donna Karan clothes.
Many stores began their sales online yesterday, when an estimated five million Britons shopped online. Sales on Christmas Day were forecast by IMRG to be up almost 20 per cent on last year, to £103m.
Sales of the century: Where to find bargains
Discounts: Up to 50 per cent
Bargains: Half-price Christmas gift range
Started: Christmas Eve
Discounts: Up to 75 per cent off; 50 per cent off all bathroom and kitchen units and kitchen installation
Discounts: Up to 70 per cent off
Fortnum & Mason
Discount: Up to 50 per cent off homewares, fashion and accessories
Discounts: Up to 50 per cent
Discounts: Up to 50 per cent off fashion, food, furniture, carpets, and kitchenware
Discounts: Up to 50% off DKNY, Donna Karan and other fashion brandsHalfords
Starts: Today Discounts: Up to 60 per cent
Discounts: Up to 50 per cent
House of Fraser
Discounts: Up to 70 per cent
Started: 18 December
Discounts: Up to 50 per cent, depending on store
Marks & Spencer
Discounts: Up to 65% off fashion, lingerie, children's clothing, home and beauty
Discounts: Up to 75 per cent off
Discounts: Up to 90 per cent
Discounts: Up to 70 per cent off men's, women's and children's clothing and footwear
Discounts: Up to 50 per cent off luxury food.
Starts: Today at 200 stores; others tomorrow
Discounts: Up to 75 per cent offReuse content