Advisory and restructuring firm Zolfo Cooper, offer their comments on how different high street stores have fared in recent months.
Hilco rescued HMV
“HMV lives to fight another day. This is really positive news for the chain and the wider UK retail sector. Hilco understands the market well and is a seasoned high street veteran. The news that HMV is to continue trading will also be welcomed by suppliers as an over-reliance on online channels may be uncomfortable.
The test now is with the consumer. Following the public’s outcry at the demise of HMV, consumers need to start shopping in the stores again in order to secure its future on Britain’s high streets.” Peter Saville
WHSmith’s interim results
“WHSmith’s results are a triumph for Kate Swann. Swann’s cost-cutting methods of steering clear of the entertainment market and focusing on more profitable products, has led the retailer to stellar success. Other retailers on the high street need to sit up and take note of the stationer’s successful strategy. WHSmith has continued to recognise how the market is moving as well as how consumers like to shop by streamlining its product offering and store portfolio.
With Steve Clarke due to take over this June, WHSmith will need to maintain its performance keep afloat in the rising tide of multi-channel, supermarket and convenience store competitors.” Dan Coen
Marks & Spencer’s Q4 trading update
“Whilst today’s results are perhaps more encouraging than some expected there is still a long way to go as Marc Bolland enters the final straight of his three year plan. Amongst other things M&S needs to follow through with its pledge to increase the style and quality of its clothes and win back market share from its rivals via an enhanced store and online offering. With a new director of style and head of merchandise allied to increased investment in a redesign of its stores, technology and ecommerce platforms there is no doubt the intention is there to effect change across the business. The two big questions which remain unanswered though are: would this be achieved more quickly and effectively out with the scrutiny of the public markets and, what exactly does the new M&S look like?”
“Food sales are the white knight for M&S, painting a much brighter picture than its clothing sales. With food becoming an increasing focus for the whole business, and an international expansion of its food division on the cards, the grocery department is certainly out-performing its rivals.”
“M&S’s clothing sales continue to disappoint. The retailer is increasingly under pressure to revamp the quality and style of its clothes and it is clear that M&S needs to develop the brand to reconnect with its diverse and highly fragmented target audience.” Robin Knight
Debenhams’ interim results
“Debenhams has struggled through the cold spell, but a more positive outlook may be on the horizon. The wintry weather had a strong impact on the department store, with shoppers staying at home and its large supplier network disrupted at times.
However, Debenhams is working to systematically improve its stores, communicate its proposition more clearly and improve the customer experience through innovative multi-channel options. A number of tactical recruits, including a new ecommerce director, should also help breathe new life into Debenhams as spring sets in.” Dan Coen
“Primark’s stellar success flies in the face of conventional wisdom. Whilst the rest of the retail world is obsessing over online selling and multichannel strategies, Primark is powering ahead despite it having no online business at all. The retailer’s success is a refreshing change from the rest of the retail world. At a time where the cold weather has put a strain on the high street, Primark is going from strength to strength bringing in cash-strapped customers looking for discounts.
Primark has become far more fashion-orientated, with fast-turning stock and reflecting the latest fashion trends. The retailer has therefore been able to provide low-cost fast fashion at a time when most consumers are keeping a watchful eye on their spending.” Dan Coen
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