DIY sales boom but London retailers begin to feel the pain

By Nigel Cope,City Editor
Wednesday 21 November 2001 01:00

There were further signs yesterday of a slump in retail sales in London while trading remains buoyant elsewhere. Moss Bros, the menswear retailer, issued its second profits warning in six weeks saying it had experienced "significant adverse trends in demand" in the capital. The company blamed security fears and wider economic factors.

But New Look, the fashion retailer, reported an improving sales pattern saying it had seen virtually no impact from the terrorist attacks of 11 September. And Kingfisher reported booming sales at its B&Q and Comet divisions saying the stores were benefiting from the trend for "nesting", where people spend more on their homes during an uncertain period.

Rowland Gee, the managing director of Moss Bros, which also owns the Cecil Gee and Code shops, said: "London has taken a bit of a hit and we have quite a high proportion of our stores in and around the capital."

Moss Bros said operating profits for the full year would now be "materially worse" than the £3.4m reported last year. Mr Gee said sales had initially recovered after 11 September but then fallen in October and stayed flat. Moss Bros shares fell 3.25p to 26.25p on the news as analysts pencilled in full-year losses of £5.5m.

Kingfisher, the retail group which recently sold Superdrug and demerged Woolworths said like-for-like sales in the 13 weeks to 3 November were up by 4.8 per cent. B&Q led the way with double-digit sales though Kingfisher's businesses in France and Germany fared less well. Shares in the group closed 5.5p lower at 376.5p

Fashion retailer New Look continued its recovery with a 15 per cent increase in profits to £27.3m in the six months to 30 September. The company said its new strategy of opening larger stores and refurbishing its smaller ones was working. Like-for-like sales in the first half were up by 2.7 per cent on the previous year, growing to 7.4 per cent in current trading.

Margins were up by 2.2 percentage points, helped by better stock control and a new distribution centre in Doncaster. The shares, which stood at 50p earlier this year, jumped 4.5p to 124.5p.

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