Retail News - Snapshop Feb 2010 by fspretailconsultant

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									          February 2010 Update

The       Retail Administrations include Diamonds & Pearls (again, pre-pack), Designer Room, Ethel Austin
Summary   and sister Au Naturale and the Fads, Textyle World and Leveys brands, owned by Divalimit.

          New retailers are Koodza, By Malene Birger, Pennyblack, Sofaitalia, Fragrance House from
          Scotmid, Hed Kandi, Barbacoa from Jamie’s Italian and a spate of new rumours about Dutch
          sportswear retailer McGregor.

                                             Birth and Death of Retailers

                          15


                          10


                           5


                           0
                           Feb- Mar- Apr- May- Jun-    Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb-
                             09  09   09   09   09      09   09   09   09   09   09   10   10

                                                In Administration   New Retailers

          In the news…

          There have been some high profile casualties this month, but aside from the aforementioned
          administrations, we also note; Ascension have suspended shares after failing to secure funding;
          Internacionale has made redundancies at its head office; La Senza have been forced to seek
          funding; the sale of Matalan has been halted after bidders baulked at the high price tag; and New
          Look have pulled the IPO process, citing an ‘unfavourable market backdrop’!

          In other news, Ollie & Nic, One Stop, 99p Store and Cote have all announced expansion plans;
          Boots and Mothercare are to trial a partnership; Halfords has acquired Nationwide Autocentres –
          not Hobbycraft or Blacks Leisure as rumoured; Argos has refreshed its brand for the first time in
          years; and John Lovering is thought to be putting together a bid for sofa retailer DFS.

          In the Statistics section, most measures look encouraging, with YoY increases of 3.1% for ONS,
          1.2% for BRC and 1.2% for the Nationwide House Price Index. The Consumer Confidence Index is
          also up, 2 points on last month, though Ireland continues to suffer, with CSO reporting the value of
          retail sales 12.4% lower YOY.

          Finally, Tesco has had a rough time of it with the press this month, as it seems not only do they
          take offence at pyjama-clad shoppers and shoulder-mounted children, but that they also take the
          ‘Think 25?’ initiative quite seriously, this month reportedly ID’ing a 24 year old buying a slice of
          quiche!




                                        www.snap-shop.co.uk
Geoff’s   Locking the Stable Door
View
          The proportion of UK multiple retailers trading unsustainably has increased from around 23% last
          year to 28% this year. Furthermore, the location of the stores of “at risk” retailers, and the reasons
          for their financial stress, are now different. Retailers are categorised as “at risk” if the ratio of gross
          profit on sales to the cost of labour and depreciation is below parity.

          Last year, a disproportionate number of shops of “at risk” retailers were in medium to large
          industrial towns, mainly in the north of England. The stores belonged principally to traditional
          retailers, such as Woolworths, whose store locations had been determined by historic shopping
          patterns. Many of these stores have, as anticipated, now closed and the towns are experiencing
          high rates of vacancy. This has attracted much attention, not least from BCSC, but in truth, the
          horse has bolted. These towns need to develop a new, viable retail strategy built around their
          surviving retailers. Amongst these retailers, the proportion now “at risk” is lower than the national
          average. There is, after all, still a role for these towns within the retail hierarchy.

          Currently, the proportion of “at risk” stores is higher than the national average in some prime retail
          locations scattered right across the UK. The likely explanation is that less experienced retailers
          have taken on inappropriate stores in otherwise sound retail locations. Identifying such traders and
          developing contingency plans is a significant asset management task. With credit difficult to
          secure, and banks looking to reduce outstanding loans, retailers that have expanded aggressively
          from an unsound base or taken on high levels of debt are amongst those most at risk.

          Given the continuing high proportion of “at risk” retailers, FSP anticipates that retailer failures will
          continue in smaller numbers throughout the year. However, the profile may change with a lower
          proportion of “traditional” retailers and more that are over-extended or debt-driven. As always,
          forewarned is forearmed.

          With kind regards



          Geoff Nicholson
          Managing Director, FSP
          geoff@fspretail.co.uk




                                          www.snap-shop.co.uk
New Retailers
By Malene Birger         is preparing to make its first foray into the UK retail market, taking a 1,345sq ft store at
                         28-29 Marylebone High Street

Hed Kandi                is planning to break into high street retailing with plans to open two stores this year

Jamie's Italian          is to launch a new barbecue-based restaurant concept under the Barbacoa brand, with
                         the first outlet due to open near St Paul's in London

Koodza                   is to make its UK debut this spring

Loft Design by…          has secured its second UK boutique at 36 Marylebone High Street, W1

Love Coffee              BB's Coffee & Muffins franchisee Shashi Patel has taken over the 13 BB's Coffee
                         stores he operated and has rebranded them "Love Coffee"

Pennyblack               is understood to be searching for its first UK flagship store

Sofaitalia               is planning to open up to 15 furniture stores across the country over the next five years,
                         having just opened the first 10,000 sq ft unit in Stockton

Store News
99p Store                plans to open 80 new stores this year

American Apparel         has signed for its ninth store in the UK

Argos                    has refreshed the brand to coincide with the launch of its latest catalogue. The retailer
                         has modified its logo, emphasising the "smile" design, and changes will be reflected on
                         fascias, point-of-sale materials and online

B&Q                      is to take on leisure and outdoor retailers with the launch of a camping range in March

Bhs                      will try out a new look in May

Books Etc                will be resurrected next week as an online offer, after the brand and website was
                         bought out of administration following the collapse of parent Borders UK last year

Cash Generator           is to roll out a new Express format to its nationwide chain of second-hand goods stores,
                         following the success of a trial in Stretford

Cote                     is to expand its chain of ten restaurants with new sites in London, Birmingham and
                         Farnham this year

Decathlon                is to open its first store in Northern Ireland

Dobbies Garden Centres   is to sell its own-branded products in parent company Tesco stores and build new
                         stores on Tesco sites

G-Star                   will open 30 franchise stores within the next five years as part of an ambitious mono-
                         brand store expansion strategy

Holland & Barrett        is to make a play for the food-to-go sector with the unveiling of a new-look store




                                          www.snap-shop.co.uk
Home Bargains             has launched a £25m expansion programme under which it will open in Northern
                          Ireland for the first time

JJB Sports                The Competition Commission has provisionally cleared the acquisition by Sports Direct
                          of 31 stores from JJB Sports

John Lewis At Home        will open in the autumn, in Croydon, its second store

Kuyichi                   is looking for its first standalone store of around 2,000sq ft in London's West End

Lulu Guinness             opened her first pop-up shop off London’s Carnaby Street between February 8 to 22

McDonalds                 is looking to open 15 new restaurants in the UK this year

McGregor                  is on the hunt for its first UK stores, and is aiming to have 10 to 15 stores in three to five
                          years

Ollie & Nic               will double its store count and launch concessions this year after a 211% jump in
                          revenue

One Stop                  is aiming to open 20-25 stores per year on the back of growing customer numbers

Pierre Herme Paris        is to debut in London at Grosvenor's 13 Lowndes Street in Belgravia

QS                        is to disappear from the high street by 2011 as owner Alok Industries ramps up
                          conversions to its Store Twenty One fascia

Sainsbury's Local         has unveiled plans to expand the format into Edinburgh’s "urban villages"

Sally                     plans to test a new format in five stores as it seeks to push its retail offer

Scotmid                   is planning to develop a chain of up to 40 perfume stores under The Fragrance House
                          brand following the success of trial outlets in Livingston and Dundee

Starbucks                 has unveiled the second London store with its new "local" design concept

Supervalu                 is trialling a full online shopping service across four stores in Dublin and Cork

The Entertainer           has overhauled its branding and store format following customer analysis, with a new
                          fascia and modified logo, along with altered ceilings and flooring, better lighting, wider
                          aisles, lower racks and increased signage

TK Maxx                   is looking to open a number of smaller c10k sq ft womenswear only stores that will
                          focus on more top end brands

Wellworth It!             A Woolworths-inspired store called Wellworth It! Will open at Ledbury in Herefordshire,
                          in March

Financial Restructuring
Adams                     administrators MCR are thought to have received eight detailed bids for the chain

Ascension                 shares have been suspended as it failed to secure finance for the company’s future

Bay Restaurant Group      has received several expressions of interest from private equity-backed suitors



                                           www.snap-shop.co.uk
BB's Coffee and Muffins   is set to be revived, rebranded "Love Coffee"

Card Factory              bidders are thought to be lining up offers in a sale that could fetch up to £400m

Clery's                   has asked its staff to work a four-day week in a bid to avoid axing jobs

Designer Room             has gone into liquidation. All ten stores have closed after a potential buyer withdrew an
                          offer

DFS                       Veteran retailer John Lovering has teamed up with private equity firm Permira to put
                          together a deal for furniture retailer DFS valued at more than £500m

Diamonds & Pearls         has been sold out of a pre-pack administration to a new company called Renaissance
                          Jewellery

Ethel Austin              and its sister homewares chain Au Naturale have gone into administration. Turnaround
                          specilist Endless is reportedly considering a bid

Fads                      owner Divalimit has been placed into administration

Figleaves                 has received bid approaches from several different sources, according to reports

Greene King               has bought eight managed pubs from Punch Taverns

Halfords                  has added car servicing to its portfolio with the £73.2 million acquisition of Nationwide
                          Autocentres, though bids for both Blacks and Hobbcraft are rumoured

HMV Group                 has acquired Mama Group after receiving an adequate level of acceptance from the live
                          music group’s shareholders

John Lewis                is reportedly considering applying for a banking licence, as the retailer looks to take
                          advantage of the fallout from the global credit crunch

KFC                       franchisee's in Ireland and Scotland incurred a pre-tax loss of £4 million in 2008,
                          despite an increase in turnover at its restaurants

Matalan                   The sale of Matalan has been pulled after potential buyers failed to meet founder John
                          Hargreaves’ price hopes for the value retailer

New Look                  has pulled its IPO process, citing an unfavourable market backdrop

Ocado                     has appointed advisors ahead of a float which could come as early as May, according
                          to reports

Pets at Home              has been sold to private equity house Kohlberg Kravis Roberts for £955m, including the
                          debt

Pubs N Bars               administrators have appointed Oxford Hotels & Inns to manage it for up to six months

SuperGroup                has announced its intention to raise £125m by floating on the London Stock Exchange

Internal Restructuring
Aldi                      has closed its Aldi Travel online booking website to new bookings in the UK




                                           www.snap-shop.co.uk
American Golf Discount   owner Lloyds Development Capital has injected £5m into the business and restructured
Centre                   its debt as it seeks to bolster the retailer to gear up for expansion

Blacks Leisure Group     has unveiled proposals to raise £20.3m through a share placing and open offer

Boots                    and Mothercare have struck a partnership which will see a new children’s clothing and
                         accessories brand sold exclusively in Boots

Escada                   has plans to expand internationally and is likely to introduce menswear and kidswear
                         collections under new owner Megha Mittal

French Connection        has kicked off a major brand repositioning with the launch of a dramatic new-look spring
                         ad campaign, which is said to be its biggest since the launch of its infamous FCUK
                         branding in 1997

H&M                      is to bring its Home offer to the UK, going head to head with Zara and Next

Internacionale           has made a string of redundancies at its London buying office and appointed a new
                         head of merchandising

JJB Sports               chairman Sir David Jones is to step down from his role due to ill health

La Senza                 owner Lion Capital has acquired 100% of the long-term debt of La Senza, bringing to
                         an end uncertainty over the lingerie retailer’s future

Republic                 has restructured its management team to support aggressive growth

Shop Direct Group        plans to close three of its call centres

Tesco plc                is expected to go head to head with estate agents within weeks with the launch of a
                         property website, allowing home owners to advertise their properties for a flat fee

Very                     is launching a new maternity range with television presenter Denise van Outen

General
Alliance Boots           has moved a step closer to opening Boots-branded pharmacies in Sweden by striking a
                         tie-up with a company owned by the Swedish Association of Pharmacists

B&Q                      has been drawn into a row after hiring gardening expert Alan Titchmarsh after some
                         critics argued BBC presenters must be impartial

Best Buy                 has trademarked the name of defunct electricals retailer Rumbelows but the brand will
                         not be used by the US giant

Burberry                 is to restructure its Spanish arm in a bid to bring the division in line with the global
                         business

Ebay                     is muscling in on mainstream fashion players with the launch of its first fashion designer
                         collaboration

Game                     is trialling a social networking site

Hollister                has sparked fury by seeking "cool, good-looking" people to work in its first Scottish
                         store



                                           www.snap-shop.co.uk
Iceland                  has today started a nationwide search for a customer to become the new face of the
                         brand after Coleen Nolan stepped down

iPod                     is the most searched-for brand term on the internet in the brown goods sector,
                         generating 9% of all searches in a month

Key Staff Changes        occurred in the following retailers this month; Lombok, Amazon, Majestic Wine,
                         Morrisons, Animal, Debenhams, Arcadia Group, Burberry, Diesel, Fat Face, John
                         Lewis, SuperGroup, Play.com and Liberty of London

Lush                     Chief Executive Andre Gerrie has bought surfwear brand Mambo from Blacks Leisure
                         Group for £800,000 via his Hong Kong investment vehicle

Morrisons                has launched a legal case against former employees of Safeway including its former
                         chairman David Webster to recoup up to £16.4m it faces for alleged dairy price fixing
                         with other retailers

Obesity                  A London council is considering the implementation of a ‘No Fry Zone’ around its 65
                         primary schools in a bid to curb the growing obesity trend in the region’s children

Scottish Retail          Retailers in Scotland will be harmed by the Scottish Government’s failure to introduce
                         business rates transitional arrangements, according to the Scottish Retail Consortium

Supermarkets             have secured the top spot in the children's wear sector for the first time, taking over
                         from high street retailers with a 29% share of the market

The Nectar Card          has become the most popular loyalty card in the UK with 16.8m people now using the
                         card

Property
Blockbuster              is understood to be working with restructuring firm KPMG on negotiations with more
                         than 600 landlords as part of cost cutting plans

Brasserie Blanc          has secured a site in the redevelopment of the former Stock Exchange on
                         Threadneedle Street

Eldon Square             The St Andrew’s Way redevelopment of Eldon Square shopping centre has opened

Focus                    has asked its landlords to allow it to delay making its January and February rent
                         payments

Gallagher Developments   has put the Junction 9 retail park in Wednesbury, near Birmingham up for sale at
                         £120m

Peel Holdings            is to submit plans to build a £15m shopping centre in Loanhead, Midlothian

PruPIM                   has bought the 127,500sq ft Ravenside retail park in Edmonton, north London, for just
                         under £48.3m

St Modwen Properties     has exchanged contracts to sell Catford shopping centre in Lewisham, south east
PLC                      London, to Lewisham Borough Council for £11.52m

Suits You                has proposed a Company Voluntary Arrangement which will allow parent SRG to
                         negotiate with landlords on Suits You leases which are losing money



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Retailer
Results




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UK Overview
ONS Retail   *The value of retail sales in January at current prices not seasonally adjusted increased 3.1% YoY, changing
Sales        the 3 month moving average to 3.1%, from 3.2% in December. Value of sales through food stores in January
             increased by 1.9% YoY, compared with 5% in December, while the value of sales through non-food stores was
             up 2.7% YoY. As always, Non-Store Retailing (now excluding Repair) was the best performing sector, with a
             YoY increase of 17.2%. Textile, Clothing & Footwear also did well, up 3.5% YoY, while the Household Goods
             sector continues to suffer, down 8.4% YoY and pushing the 3mma into negative territory.




             *Please note that ONS made several changes to its Retail Sales reporting in January 2010. For more information, see
             http://www.statistics.gov.uk/pdfdir/rs0210.pdf

             Please see the Retail & Economic Statistics page on SnapShop for more historical detail
                                                           www.snap-shop.co.uk
Internet   Based on BRC figures, non-food non-retail sales were 14.6% higher in January YoY, expectedly down from
Retail     26.5% for December. According to the ONS*, Internet sales accounted for 8% of all retail sales in January, up
Sales      from 7.7% in December.


                                         %                            Internet Sales

                                       28.0
                                       24.0
                                       20.0
                                       16.0
                                       12.0
                                        8.0
                                        4.0
                                        0.0
                                               Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan-
                                                09   09   09  09    09 09    09    09   09   10

                                                        BRC YoY % Change        ONS Internet as % of Total


           *ONS are trialling an experimental measure of Internet retail sales. For more details see
           http://www.statistics.gov.uk/articles/nojournal/Internet_information_paper_February_2010.pdf.

BRC        Year-on-Year (YoY) total UK retail sales values in January increased 1.2%, while like-for-like (LfL) sales
Retail     decreased 0.7%.
Sales                                              British Retail Consortium - Retail Sales Monitor
                                    %
                                     7
                                     6
                                     5
                                     4
                                     3
                                     2
                                     1
                                     0
                                    -1
                                    -2
                                    -3
                                         Feb- Mar- Apr- May- Jun-         Jul- Aug- Sep- Oct- Nov- Dec- Jan-
                                          09   09   09   09   09           09   09   09   09   09   09   10

                                                      YoY LfL         YoY Tot         3mth LfL        3mth Tot


           Retail sales in central London in January were 3.5% higher on a like-for-like basis than a year ago, when
           sales had risen 6.5%. This was the worst January sales growth since 2005.




           Please see the Retail & Economic Statistics page on SnapShop for more historical detail




                                                        www.snap-shop.co.uk
Pedestrian   SPSL’s Retail Traffic Index for January decreased by 27.5% MoM against December, and 5% on January
Flows        2009. Experian FootFall reported a MoM decrease of -29.4% and a YoY decrease of 2.6%

                                    %
                                    5
                                                     Pedestrian Flows - Year-on-Year Change

                                     3

                                     1

                                    -1

                                    -3

                                    -5
                                                                    SPSL (YoY)     FootFall (YoY)
                                    -7
                                          Jan- Feb- Mar- Apr- May- Jun-        Jul- Aug- Sep- Oct- Nov- Dec- Jan-
                                           09   09   09   09   09   09          09   09   09   09   09   09   10




Interest     In February, the Bank of England’s Monetary Policy Committee once again voted to maintain the official Bank
Rates        Rate paid on commercial bank reserves at 0.5%. To provide some variety and comparison, SnapShop has
             adjusted the graph to show data back to February 2006.

                                      %                         Bank of England - Base Rate
                                      6

                                      5

                                      4

                                      3

                                      2

                                      1

                                      0
                                          Feb- Jun- Oct- Feb- Jun- Oct- Feb- Jun- Oct- Feb- Jun- Oct- Feb-
                                           06   06   06   07   07   07   08   08   08   09   09   09   10




             Please see the Retail & Economic Statistics page on SnapShop for more historical detail



                                                         www.snap-shop.co.uk
Inflation   In the year to January, the consumer prices index (CPI) rose 3.5%, up from 2.9% in December. The more
            familiar RPI (Retail Prices Index) increased, from 2.4% in December, to 3.7% in January. Both reflect the
            increase in VAT rates from 1st January


                                     %                              UK Inflation (CPI v RPI)               CPI       RPI
                                     6

                                      5

                                      4

                                      3

                                      2

                                      1

                                      0

                                     -1

                                     -2
                                            Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan-
                                             09 09     09 09     09   09   09 09     09   09 09     09   10


House       According to the Nationwide index, the price of a typical house rose by 1.2% in January MoM. The average
Prices      price of a typical UK property in January was £163,481. Commentary by Nationwide states “unless there is a
            fall in property values in February, annual house price inflation is likely to move into double-digit territory next
            month for the first time since May 2007.”


                                                            Nationwide House Price Index
                                       %
                                      14                                                                              2
                                      10                                                                              1.5
                                        6                                                                             1
                                        2                                                                             0.5
                                       -2                                                                             0
                                       -6                                                                             -0.5
                                     -10                                                                              -1
                                     -14                                                                              -1.5
                                     -18                                                                              -2
                                            Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan-
                                             09   09 09     09   09 09 09       09   09   09 09     10

                                                                    YoY         MoM          3mma

            NB: YoY figures refer to left hand scale, MoM statistics refer to right hand scale. September YoY was flat.




            Please see the Retail & Economic Statistics page on SnapShop for more historical detail


                                                         www.snap-shop.co.uk
Consumer     The GfK NOP Consumer Confidence Index rose by 2 points during January to -17. Confidence in the
Confidence   “general economy” over the last 12 months rose four points, bringing it twenty three points higher than this
             time last year.

                                        %              GfK NOP Consumer Confidence Index
                                        5
                                        0
                                       -5
                                      -10
                                      -15
                                      -20
                                      -25
                                      -30
                                      -35
                                      -40
                                            Feb- Mar- Apr- May- Jun-        Jul- Aug- Sep- Oct- Nov- Dec- Jan-
                                             09   09   09   09   09          09   09   09   09   09   09   10

                                                 Research by GfK NOP on behalf of the European Commission




             Please see the Retail & Economic Statistics page on SnapShop for more historical detail




                                                        www.snap-shop.co.uk
Ireland Overview
CSO Retail   At time of writing, the most recently published data were for December, when the value of retail sales in
Sales        current prices, not seasonally adjusted, was 12.4% lower YOY, decreasing the moving YOY 3 month figure to
             –12.2% from –11.9% in November.
             The value of food sales in December decreased to -9.5% YOY, and the value of non-food sales increased to
             -14.8% from –16.5% the previous month.




             Please see the Retail & Economic Statistics page on SnapShop for more historical detail



                                                         www.snap-shop.co.uk
Inflation in   In Ireland, HICP rose to -2.4% in January, while CPI increased, to -3.9% - increases for the second month in
Ireland        a row.

                                          %                         Irish Inflation (HICP v CPI)
                                           2
                                           1
                                           0
                                          -1
                                          -2
                                          -3
                                          -4
                                          -5
                                          -6
                                          -7
                                               Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep- Oct- Nov- Dec- Jan-
                                                09 09 09 09 09           09 09 09       09 09 09 09 10

                                                                                 HICP        CPI




               Please see the Retail & Economic Statistics page on SnapShop for more historical detail.




                                                           www.snap-shop.co.uk
And Finally…

A Moment On The Lips, A Lifetime On The Hips

Feeling a bit peckish but don’t want to pile on the pounds? Fancy a bag of crisps but worried about the salt
content? Never fear, Cranswick Food Company are here to help.

The Duchy Originals sausage producer has tried to patent a revolutionary new product that promises to
provide everything the slimming carnivore could ask for – namely, meat crisps.

Said crisps promise to contain fewer calories, fat and salt than the traditional potato variety while having all the
flavour of your favourite Sunday roast. These little gems are made by whizzing up some beef and turkey,
mixing it with emulsifiers, heating gently then microwaving. Yum!

I don’t know about you, but I can hardly wait…




                                                               www.fspretail.co.uk
                                                                   23/02/10
FSP has gone to its best efforts to ensure this data is correct but the author reserves the right not to be responsible for the accuracy of information provided.




                            SnapShop Monthly, a benefit of SnapShop Membership, is provided by:

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                                                                 Hughenden Avenue
                                                                    High Wycombe
                                                                  Buckinghamshire
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                                                               Tel: 01494 474740
                                                        Email: snapshop@fspretail.co.uk
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