retail Business news
top Marks for ASOS.com
Struggling retailers reading asos.com's [LSE: ASC] latest financial results in the press (for the year ending on the 31st of March 2009), would be forgiven for thinking the figures were something conjured up in a virtual reality game.

The on-line fashion and beauty retailer, with no high street store presence, has achieved a 104 per cent increase in Group revenues from £81m (2007/08) to £164.5m (2008/09). What's more, the company's successes aren't confined to the UK, international sales were up 303 per cent to £32.2m.

Gross profits rose 92 per cent from £37m (2007/08) to £71m (2008/09). The rise was bolstered by a 68 per cent year-on-year increase in the number of active customers (totalling 1.2 million) at the end of May 2009.

Evolving into an operation that now offers more than 24,700 branded and own label products — including the newly launched premium collection (asos.com Black), designer brands, children's and maternity wear — asos.com's phenomenal success, has proven that fashion shopping has evolved.

Lord Alli, Chairman of asos.com, stated: "Against the worst economic climate for retailers in recent memory, the Group has produced top line growth of over 100 per cent, has again increased its market share and has delivered outstanding profit growth. It highlights the strength of the internet as a retail channel and its potential position in the retail landscape of the future. The outlook for 2009/10 remains uncertain. Whilst some indicators are showing positive signs, the effect of unemployment, job security and consumer debt has yet to be fully felt. Therefore, we have been more conservative in our planning for the 2009/10 financial year. That said, the future of online clothing retail remains bright, with the internet set to take an ever increasing share of the clothing market. asos is ideally positioned to continue to exploit this, both in the UK and increasingly internationally, and we remain confident that this will be another year of strong growth."

Visit: ASOS.COM [29 June 2009]

H&M GROUP SALES for May
In the month of May 2009, H&M's sales in local currencies (including VAT), were unchanged compared to May previous year.

Sales per month (in per cent excluding currency rate changes) are listed below:

The figure in parenthesis represents the sales development in comparable H&M units (i.e. stores, internet and catalogue revenues from countries that have been in operation for at least one financial year). H&M’s financial year runs from the 1st of December to the 30th of November.

The number of stores amounted to 1,822 on 31st of May 2009 compared with 1,593 on 31st of May 2008.

Visit: H&M [25 June 2009]

7 - 9 October 2009 Interstoff Asia Essential Autumn
Running from 7 to 9 October 2009, Interstoff Asia Essential Autumn, held at the Hong Kong Convention & Exhibition Centre, has confirmed participants for their forthcoming exhibition.

Continuing on the success of the previous season’s edition, October's show will include textile manufacturers and fashion designers, showcasing a comprehensive range of fashion, eco-friendly and functional fabrics. It will also designate special zones to highlight the latest product developments and expertise from: China, Korea, Japan and Taiwan — so as to maximise buyers sourcing time at the fair.

Interstoff Asia Essential Autumn provides an ideal business platform for trade amongst industry professionals; it is also a major draw for exhibitors seeking international buyers from the Asia-Pacific region. Many exhibitors are looking to Interstoff Asia Essential to take advantage of this prime marketing destination.

Visit: Interstoff Asia | Messefrankfurt [25 June 2009]

nine West Signs License & Distribution Agreement With Kurt Geiger
Nine West Footwear Corporation, a division of Jones Apparel Group, Inc. [NYSE: JNY], announced that it has signed an agreement with Kurt Geiger Ltd., Europe's largest luxury footwear retailer, to license and distribute the Nine West and Easy Spirit brands in the United Kingdom and Ireland.

Under the terms of the agreement, Kurt Geiger will offer women's footwear, handbags and small leather goods beginning with the spring 2010 product lines. Kurt Geiger will distribute the products through department stores and also intends to open freestanding Nine West stores in the UK and Ireland, including flagship locations.

"We are thrilled to partner with Kurt Geiger and to bring the Nine West and Easy Spirit brands to a broader base of consumers in the UK and Ireland," said Andrew Cohen, Nine West Footwear Corporation's Chief Executive Officer. "This agreement marks another positive step in our international licensing program. With Kurt Geiger's proven track record of execution and brand management expertise, Nine West and Easy Spirit will have increased exposure in these key European markets, with significant long-term potential to further develop these brands in currently untapped markets."

Neil Clifford, Kurt Geiger's Chief Executive Officer, said, "This is an exciting opportunity for the growth of Kurt Geiger and we are delighted to be welcoming Nine West and Easy Spirit to our portfolio. We believe that our expertise in luxury brand management paired with our unrivalled retail network within the UK and Europe will further enhance the reach of these global brands within our marketplace."

The new agreement replaces a previous license and distribution agreement in the United Kingdom and Ireland that was terminated by Nine West Footwear Corporation earlier this year.

The initial term of the agreement is for seven years and includes an option for renewal.

Visit: Jones Apparel | Kurt Geiger [22 June 2009]

Abercrombie & Fitch to Close RUEHL Operations
Abercrombie & Fitch [NYSE: ANF] Board of Directors approved plans to close 29 of its RUEHL branded stores and related direct-to-consumer operations.

RUEHL generated a pre-tax operating loss of approximately $58 million for the fiscal year ending on the 31st of January 2009, including a non-cash impairment charge of approximately $22 million. The pre-tax operating loss included store operating results and home office and other costs directly attributable to RUEHL operations. On the basis of these results and the global economic crisis, the company has decided not to pursue further development of RUEHL.

Mike Jeffries, Chief Executive Officer and Chairman of the Board of Abercrombie & Fitch Co., said: "It has been a difficult decision to close RUEHL, a brand we continue to believe could have been successful in different circumstances. However, given the current economic environment, we believe it is in the best interests of the Company to focus its efforts and resources on the growth opportunities afforded by our other brands, particularly internationally. While I am disappointed with the ultimate outcome, I am grateful for the effort and commitment the RUEHL team has shown in developing and positioning that brand in the marketplace. In particular, the recent strides made in differentiating and elevating the RUEHL assortment make this an especially difficult decision. However, all of our brands will benefit from our experience and lessons learned with RUEHL."

The Company anticipates the closure will be substantially complete by the end of the current fiscal year.

Visit: Abercrombie & Fitch [17 June 2009]

Tu Clothing records 1 Million Transactions in Single Week
Remember the days when consumers were snobbish about shopping for clothing at their local supermarket? J Sainsbury plc [LSE: SBRY] first quarter results, for the 12 weeks to 13 June 2009, have signalled that those days are definitely over.

Sainsbury's clothing brand Tu achieved a 'first' for the company, by recording one milllion transactions in a single week. In addition to this, the company managed strong sales growth and delivered continued progress despite challenging economic conditions.

Sainsbury's Total sales for first quarter were up 3.2 per cent (7.6 per cent excluding fuel) whilst Like-for-like sales also rose in the first quarter, up 2.5 per cent (7.0 per cent excluding fuel).

Justin King, Chief Executive, said of the Sainsbury's clothing range and future store expansion: “Our TU clothing range recorded its best ever quarter with a record one million transactions in a single week, and our home ranges continued to grow strongly across the quarter.

“During the quarter we created an additional 1,000 new jobs. We extended two supermarkets and opened five new stores. Today we have opened a 50,000 sq ft store in Gloucester Quays which is our latest ‘green’ supermarket. We have accelerated the growth of our convenience estate, as planned, opening seven new stores in the quarter, including three acquired from the Co-operative group as announced in March. We have also announced today that we have agreed the acquisition of a further six supermarkets and three convenience stores from the Co-operative Group.

“We have had a strong start to the new financial year. While we expect the economic environment to remain challenging during 2009, our wide customer base and focus on great products at fair prices means we are well positioned to continue our progress.”

Visit: J Sainsbury Plc. [17 June 2009]

Ted delivers a Ray of Sunshine
British designer brand Ted Baker [LSE: TBK], announced a 7.6 per cent increase in Group revenue, for the 19 week period ending on the 12th of June 2009; compared to the same period last year, with gross margins in line with expectations. Retail sales, for the period, were 15.2 per cent above the same period last year and average retail square footage rose by 17.1 per cent over the period to 202,206 sq.ft. (2008: 172,696 sq.ft.).

The company says performance in the UK has been better than anticipated, although trading conditions in overseas markets remain challenging. This hasn't, however, thwarted the company from taking advantage of opportunities that arise, so much so that Ted Baker has also announced the opening of a new store in Boston (in October) and a new outlet store in Orlando schedule to open at the end of this month. The only blips in the interim report where, the 15.7 per cent decline in wholesale sales (due to retail concessions and independent retailers feeling the heat from the recession) and the North American licensing partner Hartmarx Corporation filing for protection, under Chapter 11 of the US Bankruptcy code — in January 2009.

Commenting on trading, Ray Kelvin, Founder and Chief Executive, said: “The economic environment remains uncertain, however, we remain confident that the strength of the Ted Baker brand coupled with our resilient multi-channel distribution strategy and sound balance sheet will enable the Group to weather this difficult environment. We have taken action to ensure our costs and commitments remain controlled and in line with the trends we anticipate for 2009 but will continue to invest carefully in the development of the brand where appropriate to support long term growth.”

Visit: Ted Baker plc. [16 June 2009]

WEAKEST LONDON SALES GROWTH THIS YEAR
— Retail sales in central London in May were 1.6 per cent higher, on a like-for-like basis, than a year ago, when sales were up 8.5 per cent, driven by much warmer weather.
— Retail footfall in May fell back just below its year-earlier level, as the weather was not as sunny as May 2008.
— The favourable exchange rate continued to attract overseas visitors, especially those from Western Europe, but tourists were more cautious and tended to spend less.
— Food sales slowed after a strong Easter boost in April. Clothing, footwear and outdoor living continued to sell on sunny days but less strongly than last May. Beauty products held up but homewares and furniture sales remained difficult.

Stephen Robertson, Director General, British Retail Consortium, said: “It’s no surprise this May’s sales growth was weaker than last year’s, which greatly benefited from the dramatic improvement in the weather. Despite this, London retailers outperformed the rest of the UK by a wide margin. And consumer confidence held up better in the capital than other parts of the UK.

“The sunny days boosted sales of clothing, footwear and outdoor living, but not as strongly as compared to last May — which was sunnier. The favourable exchange rate continued to attract overseas visitors to London, though Western European tourists tended to be more cautious about their spending.”

Helen Dickinson, Head of Retail, KPMG, said: “These figures may look disappointing after the strong results of the first four months of the year, but central London does continue to outperform the rest of the UK. Stronger sales last year — May was one of the strongest months of 2008 — also impacted this month's results. We might have expected better figures as, while there are consumers struggling financially due to actual, or the prospect of, job losses, there are UK consumers with greater disposable incomes and a continuation of increased overseas visitors to the capital. Sales volatility appears to be the order of the day.”

Visit: London Retail Consortium | KPMG [15 June 2009]

In June 2007, the CFDA also awarded Ralph Lauren the first-ever American Fashion Legend Award. Lauren is the only designer to receive the Council of Fashion Designers of America’s four highest honours — the Lifetime Achievement Award, the Womenswear Designer of the Year Award, the Menswear Designer of the Year Award, the Retailer of the Year Award — as well as the CFDA’s Humanitarian Leadership Award.

Visit: Ralph Lauren [15 June 2009]

Shop vacancy problem is misunderstood, says KPMG/Synovate Retail Think Tank
A new report (White Paper #12) from the KPMG/Synovate Retail Think Tank (RTT) has found that the impact the recession has had on the retail industry, is largely misunderstood. The findings detailed in the report show the recession has contributed to one key change, the speeding up of the inevitable decline of tertiary shop property.

Even in buoyant economic periods, vacancy levels in traditional retail properties have remained stubbornly high, usually hovering at 10 per cent or so. Some of this vacant property is effectively obsolete for shopping purposes and the recessionary shakeout is accelerating the growth of property obsolescence. The RTT urges local authorities to acknowledge the realities of the situation and where appropriate re-zone shopping that is clearly redundant for other uses. Charging rates for empty shops that have little hope of re-use for shopping purposes is a tactic likely to acerbate the underlying redundancy problem — not resolve it — if re-development is not viable.

As the recession continues, there has been much talk about how shop closures are changing the face of high streets and shopping centres across the UK. In its latest white paper, the RTT debated the question, 'What impact do shop vacancies have on towns and cities across the UK and what can be done to address the problem?' (available at www.retailthinktank.co.uk) There is plenty of discussion and research on the subject. For example, Experian figures suggest that one in seven UK shops — some 135,000 units — will be vacant by Christmas 2009. However, one in eight or one in nine are usually vacant anyway. RTT members consider that store closures are a long-term structural issue, rather than simply a short-term cyclical effect of the recession. Shopping habits have been changing for many years, with consumer demands for greater choice, in larger purpose-built stores, increased price sensitivity and more mobility leaving many small traditional shops surplus to requirements. Vacancy rates in tertiary locations were high well before the onset of recession.

Retailers have been retrenching into larger markets for more than 40 years, increasing the rate of shop redundancy in many peripheral High Street and neighbourhood shopping locations. A lot of the property relinquished by retailers has been filled by service operators but neighbourhood shopping, and tertiary shopping generally has tended to suffer. The current recession is simply speeding up the process. The RTT believes that much of the peripheral small unit shopping that is vacant and in some cases has been vacant for years, is no longer viable for shopping purposes and should be used for other commercial or residential uses. The situation will not improve on its own. Government and local authority intervention is required to tackle empty, obsolete property through planning.

85 trading locations now attract half the population for comparison goods shopping, compared with 200 forty years ago, highlighting that this shift has been underway for a very long time. The RTT members point to the comparative lack of empty units at regional shopping centres such as Brent Cross, Bluewater, Lakeside, Metro and Meadowhall and the rush to cherry-pick Woolworth’s stores in the best locations a few months ago. Even during a harsh recession, demand for quality space remains strong. The problem lies with the poorer quality retail property and the blight which obsolete property causes.

Structural changes and the shakeout in the tertiary retail property looks set to exacerbate the spiral of decline in many smaller trading locations. Local authorities of towns at risk of decline have the challenge of how to handle dwindling numbers of retailers seeking space in low productivity markets and how to put empty sites to their best use: residential, office accommodation, catering or leisure for example. It may be difficult for local authorities to face these hard realities but these changes will happen eventually with or without their intervention and by acting now they can at least prevent boarded up — and in some cases vandalised — retail property putting off those non-retail companies that might otherwise have revitalised such areas.

RTT member Mark Teale of CB Richard Ellis comments: “Market concentration, as chain retailers migrate to the strongest trading locations has been steadily rendering more and more of traditional unit shops tertiary. Each time the recessionary tide comes in, and stronger retailers flee to higher-productivity ground, more and more tertiary property ceases to be viable for non-food shopping purposes. The trend, which has been apparent for more than 40 years, simply illustrates the chronic mismatch — in unit size, location and accessibility terms, between much of the traditional shop property and modern retailing requirements. Where it is no longer viable for shopping purposes, change of use is clearly preferable to long term dereliction.”

Visit: Retail Think Tank [15 June 2009]

more retail closures inevitable conclude consumers
The shape of the retail landscape across Australia, Canada, the United Kingdom and the USA, will undergo further upheaval before the current economic downturn is over, concludes the latest consumer survey conducted by independent market analysis firm Datamonitor’s Recession and Recovery research programme, which provides an up-to-date view on the effects of the economic downturn on consumers and businesses across 19 countries.

Results from the survey (undertaken on-line between 30-31 May 2009 and based on a sample of 1,200 respondents across Australia, Canada, the United Kingdom and the United States), reveal 78 per cent of respondents across the four countries feel “lots more shops will close down”, with British shoppers being the most pessimistic with 89 per cent of respondents mostly agreeing with this statement.

Conversely, just under 15 per cent of respondents across the four countries feel more new shops will open over the course of the recession.

“These findings are profoundly worrying for the retail industry and also for the commercial property sector” says Datamonitor’s Global Director of Consulting for Consumer Markets, Neil Hendry. “As we know consumer spending is under pressure globally, and the fact that consumers see more retail stores and chains closing would suggest they are pessimistic about their ability to be able to go out and spend in the short to medium term.”

The survey results also point to a potentially bigger shift in consumer retail spending behaviours. 45 per cent of respondents claim they would start to buy more from local stores in order to support local businesses, and as a result 56 per cent of respondents felt their local shopping malls and high streets would be unaffected by mass retail closures.

“This is an interesting dynamic” continues Hendry. “The lack of diversity in shopping malls and high streets across Australia, Canada, the UK and the USA, has increasingly been a source of frustration for consumers, and it would appear that the economic downturn has created an environment where a sense of community can be shown through support of local businesses. This trend is also underpinned by increasing awareness of environmental and local sourcing issues amongst consumers, which combined with a reduction in car usage, particularly in the USA, means that the future viability of the “city fringe” retail park or shopping mall may be called into question.”

Hardly surprisingly, across all countries, consumers believe the weaker and less popular retail stores will not be able to withstand the recession, but there is a significant difference across countries about how stores will deal with the effects of the downturn in order to ensure their survival. In the USA for instance, 59 per cent of consumers believe stores will open for less time in order to control staffing costs, an opinion shared by only 20 per cent of Australians. However, in the UK 58 per cent of consumers believe stores will open for longer in order to maximise trading opportunities, compared to only 26 per cent of Canadians.

Hendry continues: “Obviously, there are differences across these four economies already in terms of opening hours, and also in terms of retail cost structures. However, what the above would indicate in the USA is a reduction in over-time hours for staff, and possibly retrenchment of part-time jobs in retail, which could have a particularly adverse effect on working families and also students, who often rely on retail work in order to support their incomes. In the UK, with lease payments due quarterly in advance, retailers will obviously be looking to maximise sales. The key equation will therefore be whether extra staff and overhead costs will be covered by improved cash flow or the margins achieved on incremental sales.”

Hendry concludes “the most worrying thing from an overall economic perspective is that consumers are pessimistic about the retail sector — indicating they are also pessimistic about their own ability to spend. This means any consumer led economic recovery is going to be some way off, particularly as unemployment rates look set to continue to rise significantly over the next 18 months. As such the outlook for commercial and retail property will remain very weak, particularly with regards to portfolios that are not well served by public transport, and will ensure that default rates amongst the major banking groups exposed to commercial property will potentially also increase — placing even greater pressure on fragile lending markets.”

Visit: Datamonitor [12 June 2009]

GAP Childrenswear and STELLA MCCARTNEY to launch new range
Two of Gap Inc.'s most recognised brands, GapKids and babyGap, are to get a stylish new make-over via an exclusive collaboration with British fashion designer Stella McCartney.

Gap by Stella McCartney is expected to launch in late 2009, in select GapKids and babyGap stores in the United States and Canada, the UK, France and Ireland, and Japan, as well as online in the US.

“We’re thrilled to have the opportunity to build on successful past collaborations with a world class design talent like Stella,” said Marka Hansen, President of Gap brand. “I'm looking forward to offering our GapKids and BabyGap customers her unique interpretation of Gap's casual American aesthetic. Her experience as a parent and designer are sure to delight both kids and parents alike.”

Stella McCartney comments, "For years now I've wanted to create a collection for kids, it's something I've often been asked about. I believe that this one off collaboration will be a great way for customers to be able to participate in the Stella McCartney brand. I believe that kids clothing should be more accessibly priced, which is particularly important at the moment given the current climate. It's really exciting for us to do a boys and girls collection for the first time."

Visit: Gap Inc. | Stella McCartney [10 June 2009]

Inditex Group's Income dented, but profits up 4%
The Inditex Group's first quarter results, for 2009, showed the company's net sales rose by 8 per cent (in local currencies) to €2,338 million.

The Spanish company, which has opened a further 95 new stores to bring the total number of stores to 4,359 — in 73 countries, reported a 16 per cent decline in Net income to €184 million. Store sales in local currencies (from 1 May to 7 June) rose by 9 per cent.

The owners of international brands Zara and Massimo Dutti, reported a 4 per cent rise in Gross profit to €1,331 million, resulting in a gross margin of 56.9 per cent.

The Inditex Group maintains its plan for FY2009 net store openings of between 370 and 450 new stores.

Visit: Inditex Group [10 June 2009]

Synovate retail psychologist Dr Tim Denison explains, "Over the last two months, the latest bugbear to have hit high street retailers is 'shopper unpredictability'. The first quarter was understandably subdued, but expectedly so. Consumer confidence was crushed and this reflected harshly both on retail sales and footfall. April, however, was better than any of us could have wished for; it was certainly far busier than we had forecast. Optimists might have seen the start of quarter two as the beginning of 'the turn'. Unfortunately, our latest data would suggest that any such call is premature. The volatility in our footfall figures and retail sales figures reflects the fragility of people's 'feel good' mood swings and their preparedness to go out and spend on the high street.

"For retailers, the current consumer state presents new challenges. Should they continue to develop and run even more creative one-off promotions, stimulating demand, but sacrificing margin, or should they look to shore up and back 'the new retail reality' of every day low prices. It seems to me that the way forward in the short-term is about 'catching the imagination'; whether that is through impactful promotions or must-have products. There is still an opportunity for retailers to generate 'desire', particularly as the heady days of summer approach.

"There is also considerable trust being placed by retailers in the 'stay at home' or 'staycation' phenomenon and it's likely that retailers in or near traditional UK-based tourist resorts will see good uplifts, particularly those that cater for holiday essentials such as: barbecue and other holiday food for campers, caravaners and self-caterers; cosmetics and healthcare (i.e. sun creams, sunglasses and insect repellents); summer fashions particularly childrenswear, as adults may well 'make do'; and 'treats' like: ice cream, soft drinks and alcohol sold along with bags of ice. Car accessories (e.g. roof boxes and camping gear) are expected to do well too. Those that don't even leave home may well invest in garden furniture, gazebos, free-standing pools and barbecues, but value will be key."

Dr Tim Denison concludes: "Making do and being satisfied with your lot is increasingly acceptable in our transforming society it seems."

Visit: Synovate Retail Traffic Index (RTI) [9 June 2009]

Tommy Hilfiger Figures out a rewarding growth plan
With a flagship store scheduled to open in September 2009 in New York, Tommy Hilfiger's red, white and blue signature (incorporated into the company's logo and some of the labels stylish product ranges), has cultivated a 21 per cent increase in Total Group Net sales to €1,600 million.

Internationally, the company's expansion has taken the store portfolio to more than 900 contributing to Global Net sales of € 3.4 billion. In both the European and North American markets, sales were up 14 per cent (to €795 million) and 10 per cent (to USD 898 million) respectively.

In both wholesale and retail divisions, Sales grew by 16 per cent and 29 per cent.

Forming a strategic alliance with Macy’s, established in Fall 2008, has boded well for the company, helping to successfully expand product line to include children’s wear.

Commenting on the results Fred Gehring, Chief Executive Officer, said: ”Like everyone else we have had to address the new economic reality with an increased focus on inventories, receivables, costs and cash, but we are more than pleased that in spite of the unprecedented economic circumstances we were able to continue our growth pattern through the second half of the year, albeit at a much more controlled level. We believe that this is a true testament to the incredible global strength of the Tommy Hilfiger brand, our people and our balanced business model.

We expect the coming year to be challenging but we are focused on the opportunities and have initiated a significant number of organizational adjustments so that over the course of the year we will become a more efficient organization. We will continue to seek new expansion opportunities in product categories, geographies and store portfolio which allow us to anticipate continued growth."

Visit: Tommy Hilfiger [6 June 2009]

GAP INC. REPORTS MAY SALES DOWN 5%
Gap Inc. [NYSE: GPS] reported net sales of $1.03 billion for the four-week period ending on the 30th of May 2009, which represents a 5 per cent decrease compared with net sales of $1.09 billion for the four-week period ending on the 31st of May 2008. The company’s comparable store sales for May 2009 were down 6 per cent compared with a 14 per cent decrease in May 2008.

Comparable store sales by division for May 2009 were as follows:
— Gap North America: negative 11 per cent versus negative 7 per cent last year
— Banana Republic North America: negative 14 per cent versus negative 5 per cent last year
— Old Navy North America: positive 3 per cent versus negative 25 per cent last year
— International: negative 7 per cent versus flat last year

“While sales results were mixed across divisions, we’re pleased that merchandise margins were in-line with last year,” said Sabrina Simmons, Chief Financial Officer of Gap Inc. “Moving forward, we continue to focus our efforts on improving product assortments and making targeted investments to drive traffic to our stores.”

Year-to-date net sales were $4.16 billion for the 17 weeks ending on the 30th of May 2009, a decrease of 7 per cent compared with net sales of $4.47 billion for the same period last year. The company’s year-to-date comparable store sales decreased 7 per cent compared with a 12 per cent decrease last year.

Visit: Gap inc. [4 June 2009]

Abercrombie & Fitch Reports May Sales Results
Abercrombie & Fitch [NYSE: ANF] reported net sales of $182.1 million for the four-week period ending on the 30th of May 2009, a 22 per cent decrease from net sales of $233.1 million for the four-week period ending on the 31st of May 2008. May comparable store sales decreased 28 per cent. Total Company direct-to-consumer net sales decreased 10 per cent to $15.6 million for the same four-week period.

Year-to-date, the Company reported a net sales decrease of 23 per cent to $794.2 million from $1.033 billion last year. Comparable store sales decreased 29 per cent for the year-to-date period. Year-to-date, total Company direct-to-consumer net sales decreased 19 per cent to $64.7 million.

May 2009 Developments
— Total Company net sales decreased 22 per cent
— Total Company direct-to-consumer net sales decreased 10 per cent
—Total Company comparable store sales decreased 28 per cent
— Abercrombie & Fitch comparable store sales decreased 25 per cent
— abercrombie comparable store sales decreased 28 per cent
— Hollister Co. comparable store sales decreased 32 per cent
— RUEHL comparable store sales decreased 33 per cent

Visit: Abercrombie & Fitch [4 June 2009]

e-Retail storms ahead through recession
With internet shopper numbers at an all time high and online spending growing by £2.4 billion in 2009, e-Retail is proving to be a star performer in the recession, says Verdict Research in its latest report, UK e-Retail 2009.

In 2009, online spending by consumers on retail purchases will rise by a substantial 13.3 per cent to £20.9 billion: a rate of growth in severe contrast to the historical decline being suffered by the total UK retail market. Although the internet is undoubtedly starting to slow and become a much more competitive environment, online retail is still set to reach £31.2 billion by 2013, accounting for 10.0 per cent of total retail spending.

“The key for individual retailers is to formulate two clear strategies, one for succeeding through the recession and one targeting growth beyond this, as the online channel begins to approach maturity,” says Malcolm Pinkerton, Senior Retail Analyst at Verdict Research and author of the report.

Online shopping is the golden opportunity in UK retail; resilient to the recession and with continuing growth prospects.
In 2009, total retail growth will contract by 0.6 per cent as consumer spending is ravaged by the effects of the recession. However, the online market will expand by a substantial 13.3 per cent over the course of the year, driven by the continued increases in the number of internet shoppers and higher expenditure per head. This follows on from the trend of 2008 when there was a 1.0 per cent increase in internet users—to 34.4m—and an 18.1 per cent increase in online shoppers—to 26.7m—with each of these individuals spending an average of 5.8 per cent more in comparison to 2007. The major factor behind this outperformance of wider retail is the online channel’s possession of a number of counter-recessionary characteristics. Internet prices are frequently cheaper than they are in physical stores and shoppers are able to more easily search out bargains, including second-hand goods. Moreover, as a method of shopping, it is disproportionately popular with the more affluent, and therefore more resilient, AB shopping class. For this increasingly time-pressed group, making effective use of their limited leisure time is of the utmost importance. Indeed, Verdict’s report revealed that the AB group is now responsible for a massive 56.8 per cent of all online spending.

“Those with less money to spend are turning to the internet to search out bargains on branded items like electricals,”says Pinkerton.

“Additionally, the more affluent groups, who do still have money to spend, continue to appreciate the internet for its convenience, making the channel doubly resilient to the downturn.”

“There is some evidence that the most financially squeezed shoppers are abandoning the internet in favour of cheaper high street shopping at the likes of Primark, Matalan, Poundland and the grocers, particularly in sectors which retail smaller, lower priced items, such as homewares, DIY and clothing,” adds Pinkerton.

“But overall this is being more than outweighed by increases in bargain hunters looking for larger, branded items and the loyalty of those most financially comfortable consumers who continue to value convenience over price.”

Visit: Verdict [2 June 2009]

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