High street braced for more closures after summer of riots and gloom

• Clinton Cards is among those under strain as rents fall due • Stocks expected to fall include Home Retail, Dixons and HMV Britain’s high street retailers are braced for another wave of closures following one of the worst summer trading periods in years and growing concern about pressures on consumers in the run-up to Christmas. Sales figures for August, blighted by riots, volatile stockmarkets and poor weather, slipped 2.2% among mid-market retailers, according to accountancy firm BDO – the worst drop since the depths of recession two years ago. Widespread disruption, which caused shops to close their doors during trading hours well beyond the riot flash points, has left many retailers facing an uphill struggle in the face of a looming quarterly rent deadline at the end of this month. Among those already under financial strain is Clinton Cards. It emerged the company had approached landlords requesting more time to meet rent bills – as it did this time last year. Earlier this year, the rent deadlines at the end of March and June were followed by a string of retailers crashing into administration. They included Focus DIY, Habitat, TJ Hughes and fashion chain Jane Norman. The second quarter of 2011 saw 375 retailers call in administrators, said accountancy firm PricewaterhouseCoopers, a 9% rise on the same period in 2010. Meanwhile, many surviving mid-sized retailer groups listed on the stock exchange are among those most targeted by short sellers – those investors who effectively bet on the value of shares falling. Recent figures from research firm Data Explorers suggest stocks heavily shorted included Argos’s parent company Home Retail, Dixons, HMV, Ocado, Mothercare, Next and Carpetright. Accountancy firm RSM Tenon has identified almost 9,000 retailers it believes are now financially vulnerable, an increase of more than 10% in the last six months. The Local Data Company and the British Property Federation will this week issue a report expected to show that many towns have seen a sharp rise in the number of boarded-up shops. Previous figures from the British Retail Consortium (BRC) suggest about one in 10 shops are vacant in town-centre shopping districts. The BRC will publish its sales survey for August on Tuesday, which are expected to confirm the gloomy picture painted by BDO. Its figures for July pointed to comparable sales having risen by 0.6% – a number boosted by inflation. The next two weeks will see trading updates from Next, JD Wetherspoon, Costa Coffee parent Whitbread, Carpetright, Home Retail Group, B&Q parent Kingfisher and Primark parent Associated British Foods. All will be closely watched for hints of stress on the high street. However, struggling retailers may well be able to put a case to creditors to ease the pressure before the Christmas trading period, traditionally the busiest time of year. Retail industry Clinton Cards Economics Simon Bowers guardian.co.uk

Posted by on September 5, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.