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Retailers relief as shoppers hit the streets

sales The latest figures have revealed that the number of shoppers in stores around the country jumped last week, higher than both the previous seven days and up on the same period last year.

Retailers who had not yet seen the annual increase normally expected were given a boost as the footfall climbed by 2.3% on both 2010 and the numbers from the week before.

Shopping centres received the biggest boost of all with the footfall rising by 5.7% compared to the high street increase of just 2.3%. The increase will come as a relief to many shopowners, as figures from the previous week had shown a 2.3% decline compared to the numbers seen in 2010.

Stephen Robertson, the director general from the British Retail Consortium, welcomed the news and said that it was much needed for many stores. He said that the figures showed the ‘big weekend’ that many retailers had been banking on, especially with margins being squeezed as retailers tried to tempt shoppers with discounts and bargains.

But despite the lift that the increased business would have given to many retailers, Mr Robertson said that he feared many shops may not have been given a big enough boost to make up for the rest of the year.

A separate survey showed that sales had increased by 9% on average, with just over four out of ten retailers seeing an increase compared to last year and three in ten seeing their takings fall.

The chief financial officer for Asda and CBI Distributive Trades Panel chair, Judith McKenna, said that ‘big ticket items’ were not being purchased in volume, with households seemingly focusing their spending on gifts and luxuries for the food cupboard.

Recreational goods, groceries and non-store goods (which incorporates internet sales and mail order), all increased, but DIY stores saw their sales plummet. Sales in the motor industry have also fallen, dropping by 47%.

But Ms McKenna said that despite many areas seeing ‘a little extra sparkle’ thanks to the promotions and discounts being offered, the trend was not set to last with sales being forecast to fall by around 18% in January.

One of the most well-established confectioners on the high street, Thorntons, said that it expected it would not generate a profit when the fiscal year ends next June. The retailer has now issued a further profit warning, pointing to competitors offering substantial discounts and a drop in consumer confidence as the reasons behind its poor performance.

The board informed markets this week that its ‘current expectations’ were unlikely to be met and that the probable outcome is that the group would ‘break even’ by 30 June 2012.

The retailer’s finance director is due to leave the company in March and it has confirmed a further trading update will be issued at the beginning of 2012.

Meanwhile, another casualty has hit the high streets, with designer outlet, Fashion Rocks, being forced into administration.

The fashion firm offers clothing for both men and women by a number of famous designers, including Vivienne Westwood, Armani and D&G. It had stores in both Meadowhall shopping centre as well as Westfield in Stratford, which was the flagship branch and opened its doors only three months ago.

Begbies Traynor have been appointed to deal with the administration and they have confirmed they are attempting to sell the business and property as a going concern. Trading will continue in the stores whilst the insolvency experts attempt to secure a solution, but they have said that if a buyer is not forthcoming, they will ‘implement the next best alternative in the interests of the company’s creditors as a whole.’

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