UK High Street: More retailers hit by consumer squeeze
Published: 28th Jun 2011 13:35:26
As tough times continue for the UK's retailers, Thorntons is to shut up to 180 stores, while Carpetright has said it may close as many as 50.
Chocolate maker Thorntons said it would shut "a minimum" of 120 shops over the next three years, with the possibility of an extra 60 closures.
Carpetright could close up to 50 shops when their leases run out if it cannot get the rents reduced, it said.
Meanwhile, store chain TJ Hughes is set to go into administration.
Three other retailers have announced over the past week that they had called in administrators in the face of tough trading conditions.
These are fashion retailer Jane Norman; the owner of Moben and Kitchens direct, Homeform; and furniture firm Habitat.
The most recent official figures showed that UK retail sales fell 1.4% in May as cash-strapped consumers cut back on their spending.
Thorntons' store closure announcement followed a strategic review of the business.
There is a serious risk that many thousands of jobs will be lost and many many hundreds of additional shops will become empty and shuttered”
It said the outlets that will shut are among the 364 stores directly owned and run by the company.
Thorntons added that it hoped to replace them with franchised stores "in the majority of locations".
It currently has 227 shops run by franchisees.
Chief executive Jonathan Hart said: "Our goal is to refocus the business across all channels, and seek to deliver industry competitive results over the next three to five years.
"Although we see the prospect of weakness in High Street footfall and consumer sentiment continuing, I am confident that this strategy is right."
The company added that it would continue to expand its commercial division, which sells Thornton-branded chocolate via supermarkets and other retailers.
In addition, it aims to continue to grow sales via its website.
Thornton's issued a profit warning last month.
Carpetright's uncertainty over the future of 50 of its 559 stores in the UK and the Republic of Ireland came after it reported that its annual profits had slumped by 70% in the face of "very challenging trading conditions".
Pre-tax profit for the year to 30 April was £6.6m at the carpet and home flooring group, down from £22.3m a year earlier.
Its trading was hit not just by reduced consumer spending, but also the continuing weakness in the housing market.
Its annual revenues were 6% lower at £486.8m.
The company had already issued two profit warnings earlier this year, and closed 27 outlets over the past 12 months.
Carpetright chairman and chief executive Lord Harris said: "The group faced very challenging trading conditions in the year under review, with fragile consumer confidence producing a weak floor coverings market, leading to a reduction in sales volumes and profitability.
"Against this backdrop we have taken a number of management actions to adapt the product proposition whilst retaining competitiveness in the market."
Shares in Carpetright were 2% lower in afternoon trading, while those in Thorntons were down 5.6%.
Liverpool-based department store chain TJ Hughes said it was planning to appoint an administrator after reporting a downturn in trade.
The Liverpool-based firm employs more than 4,000 people at its 57 stores across England and Wales.
It said it would bring in the administrator over the next 10 days.
The retailer was bought out by its management team in March following the withdrawal of credit insurance for its suppliers.
At 12:56:39 in SportDidcot shooter Dan Rivers says he is "excited" to have been named in England's Commonwealth games squad for this summer's event in Glasgow.
At 12:56:00 in SportDavid Moyes has thanked Sir Alex Ferguson for giving him the chance to manage Manchester United.
At 12:55:30 in EnglandThe brother of a man killed in a helicopter crash spoke of his family's "five years of heartache" as he called for the operator to be prosecuted.
At 12:52:13 in Northern IrelandAn independent elections watchdog has warned there is only two weeks left for voters to register to be eligible to vote in the local government and European elections on 22 May.
At 12:51:49 in SportLaunceston assistant coach and former captain Tom Rawlings is leaving the club after criticising the process for appointing a new coaching team.
At 12:50:55 in SportJason Quigley has announced he is turning professional - six months after becoming the first Irishman to reach a final at the World Championships.
At 12:49:39 in HeadlinesEx-News of the World chief Andy Coulson has said he did not "cover anything up" following the arrest of the paper's royal editor Clive Goodman in 2006.
At 12:45:42 in ScotlandParents of babies whose ashes were disposed of without their knowledge have said they were "stunned" to learn a report into the scandal was handed over last week.
At 12:44:32 in WalesSupporters of gay marriage should be patient if they want the blessing of the Church in Wales, its archbishop has said.
At 12:43:19 in BusinessNearly two-thirds of people have never switched energy supplier, according to a survey for the energy regulator, Ofgem.
Harvard CitationBBC News, 2011. UK High Street: More retailers hit by consumer squeeze [Online] (Updated 28th Jun 2011)
Available at: http://www.ukwirednews.com/news/165758/UK-High-Street-More-retailers-hit-by-consumer-squeeze [Accessed 23rd Apr 2014]
News In Other Categories
Didcot shooter Dan Rivers says he is "excited" to have been named in England's Commonwealth games squad for this summer's event in Glasgow.
With the doors to its brand new £1million training centre officially open, one of the UK's leading apprentice training providers, Bristol based S&B Automotive Academy, is showcasing its world-class facilities by launching a series of foreign student exchanges for the first time in its 41-year history. To get a flavour of what life is like as an apprentice in the UK, the Academy hosted 16 apprentice engineers and bus drivers from the G9 Automotive College in Hamburg, Germany, as part of a Europe-wide vocational training initiative called the ‘Leonardo Programme’ with support from the European Social Fund. In a reciprocal arrangement, S&B will be sending nine apprentices to Germany during February 2012 so that they can get an appreciation of life in the automotive industry on the Continent. A further three German exchange groups are being planned for next year. Designed to assist the development of vocational skills and training across Europe, including work placements for trainees, the Leonardo Programme has a budget of €1.75bn, which is helping to encourage UK organisations to work with their counterparts abroad. In what is expected to be another challenging year for employers in the UK automotive sector, S&B’s Chief Executive, Jon Winter, claims that the exchange initiative will bring many benefits to the Academy and its apprentices: “In a world of global automotive brands, it’s important for our learners to understand the international context of the industry they have chosen to make their career. This new exchange programme will enable apprentices and Academy staff alike to achieve a better understanding of the challenges and opportunities within the automotive arena in Europe. With the Academy’s influence also extending to the USA and Asia, there’s every possibility that this initiative could move further afield in the future.” Continued Winter: “The need for skilled technicians across the world is on the increase and we actively encourage our apprentices to look at broader horizons during their training. Many of them have already learned the phrase ‘Vorsprung durch Gelehrtheit’, quite simply, ‘Advancement through learning.” In the 2010/11 academic year, S&B doubled the number of successful Apprenticeships over the previous year with some 350 apprentices graduating from the Academy. At the same time, achievement levels reached an all-time high with an overall success rate of 85%. For those learners on the Advanced Apprenticeship three-year programme, success rates were even higher, at over 98%. PHOTO CAPTION: As part of their exchange visit, S&B Automotive Academy arranged for the German apprentices to visit Hampshire bus operator, Bluestar, at its Barton Park depot. The students are pictured with S&B’s Andy West (3rd right) and Steve Prewett, Bluestar’s Area Engineering Manager (2nd right). Ends http://www.sandbaa.com
A plan by the New York Police Department to use Twitter to boost its image seems to have backfired.
The brother of a man killed in a helicopter crash spoke of his family's "five years of heartache" as he called for the operator to be prosecuted.
The director of care at a children's hospice has been cleared of professional misconduct over the way she dealt with a dying teenager.
The Hull Truck theatre has received £400,000 in emergency grants to help it out of financial crisis.