Late festive season surge helps high street retailers

A late surge of pre- and post-Christmas shoppers helped some of the UK's biggest high street names to post robust sales yesterday, but Mosaic Fashions warned on profits and revealed the depth of its woes from the Icelandic banking crisis.

John Lewis, the department store, led the pack with stunning sales growth of 27 per cent, while JD Sports Fashion, the sportswear retailer, and Jessops, the camera specialist, also delivered underlying sales growth over the festive trading period.

While the positive sales raised hopes that the UK consumer could be more resilient to the downturn, many in the industry believe consumers merely succumbed to the heaviest discounting for decades and that the worst is yet to come for retailers.

Barry Matheson, head of selling dev-elopment at John Lewis, said it was unclear why sales had rocketed for the week to 3 January. "Was it the fall of the calendar? Was it the weather? Was it driven by constant media reports of the bargains to be had? It is difficult to tell, but what we know for sure is that we delivered a truly inspirational result last week with sales 27 per cent ahead of last year."

Meanwhile, JD Sports Fashion posted like-for-like sales up by 2.8 per cent for the five weeks to 3 January, as it benefited from a late rush of shoppers and holding its nerve by only going on sale on Boxing Day.

Peter Cowgill, executive chairman of JD Sports Fashion, said: "Up until 19 December we were considering erecting the gantry, it looked liked footfall was down. But fortunately, from 19 December to 24 we had extremely strong sales, and that has continued since the 26 onwards, so over the two-week period it went well." He said the retailer had enjoyed buoyant sales among brands including McKenzie, Carbrini, K-Swiss and Lacoste.

However, Mr Cowgill warned: "It does not mean the woes of the high street are over. The economic outlook is pretty dire."

Jessops, the camera specialist, posted underlying sales up by 3.1 per cent for the five weeks to 5 January, but it said that its margins had been affected by promotions. Later this month, Jessops said it expects to post Ebitda of more than £4.4m for the year to 30 September. For the 14 weeks to 5 January, the retailer's like-for-likes fell by 5.6 per cent.

However, Mosaic, the parent of fashion brands including Karen Millen, Oasis, Coast and Principles, warned that its full-year profits would be below last year's, blaming the "severe" UK and global downturn and the challenges the business has faced since the collapse of the Icelandic banking sector.

Mosaic, which is part-owned by the stricken Icelandic investor Baugur, said: "The withdrawal of credit insurance from the business in October due to its links with Iceland put pressure on the creditors' position. However, management have addressed this proactively, working together with suppliers to ensure delivery of goods to normal terms. The administration of Kaupthing Singer Friedlander has resulted in the loss of the company's foreign exchange hedge, which will dilute profits this year and have a more significant impact next year."

For the 23 weeks to 3 January, Mosaic's total sales fell by 1.2 per cent.