Today’s news in brief-8/1/24
The UK retail sector faced challenges as almost 120,000 jobs were lost and over 10,000 stores closed, according to data from the Centre for Retail Research. Despite a -38.8% decrease in store closures compared to 2022, and a -21.3% reduction in redundancies, the improvement is seen as “less bad” rather than a sign of strength. Factors such as the cost-of-living crisis, inflation, and interest rate increases have constrained consumer spending, while retailers grapple with rising energy and occupancy costs, staff shortages, and falling demand. Most closures and job losses resulted from company reorganisations and cost-cutting programs rather than business failures. The upcoming tax increase in April, particularly affecting large retailers, is expected to further challenge the sector.
Sandersons Boutique Department Stores reported a 5% growth in retail sales in 2023, reaching almost £7m. The independent department store chain attributed its success to strategic collaborations, including partnerships with Xupes for pre-loved luxury handbags and additions to its fashion line-up with brands like Weekend Max Mara, Marella, Hackett, and Boss. Despite reported decreases in retail spending since 2006, Sandersons attributes its growth to the strategic locations of its shopping centres in strong market towns, positioned near major city centres and transport routes.
Westminster City Council approved a £90m renovation project for Oxford Street, with construction set to begin in autumn 2024. The renovation aims to enhance the iconic street with wider footways, more greenery, and improved signage. Specific projects at locations like Oxford Circus aim to increase footway space by 40%. Positive feedback from over 1,600 residents and support for proposed enhancements contributed to the green light for the ambitious project. The council aims to address previous proposals’ challenges and implement a plan that balances local needs and ambitions for the district.
Matalan has invested £35m to lower prices on over 700 products amid the ongoing cost of living crisis. The retailer is passing on reduced input costs to customers through a collaborative buying and sourcing strategy. The price reductions, averaging 15% across core and new lines of family essentials, are aimed at providing families with more affordable choices during challenging economic times. Matalan’s CEO, Jo Whitfield, highlighted the company’s commitment to building a stronger, more modern Matalan and offering quality products at great prices.
iSmash is reportedly exploring a sale after facing growing losses. The company’s pre-tax losses widened from £2.6m to £5.9m in the year to December 2022, attributed to a reduction in pandemic-related government support. Auditors warned of a “material uncertainty” over its future, indicating a need for additional funding. While the company received funds from its parent company’s shareholders during exploration of options, auditors expressed concern about its dependence on ongoing financial support. iSmash is actively seeking solutions that align with its strategic initiatives.
