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December 2009 Update

The Summary

For the first time since July of this year, the number of retail administrations has risen above that of new market entrants, with 5 – Pubs N Bars, Escada (pre-pack), Borders, Head and Virgin Vie - falling to the wayside this month. New market entrants are Out The Closet, Mackintosh and KidRobot.

Birth and Death of Retailers

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In Administration New Retailers

In the news… A definite mixed bag of news this month; The Good

• Expansion is on the cards for Astley Clark, Baguette Express, Bargain Booze, Dreams, Hobbycraft and Mills Group

• New formats have been announced as Comet and M&S launch mobile sites and Gieves and Hawkes take their website transactional

The Bad

• Nokia has been forced to close its flagship store on Regent Street due to competition from market leader Apple across the road

• The Envy name to disappear from the high street, as up to 12 underperforming stores are closed and the remainder are rebranded to Tom Wolfe

The Ugly

• All Saints are issuing legal proceedings against River Island claiming copyright infringement

• New Look has been found guilty of causing the Oxford Street fire two years ago It seems that when they are good they are very, very good but when they are bad they are horrid… It’s the same in the Statistics section, with House Prices up 0.5% MoM, BRC retail sales up 4.1% YoY but Consumer Confidence down 4 points and Ireland still suffering as CSO reports the value of retail sales 11.8% lower YoY. The FSP view of the current Clothing & Footwear market is supported by ONS Retail Sales showing a mere 0.4% increase YoY this month.

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Geoff’s View

The Golden Rule “Do as you would be done by” is an ethical code that has its roots in a wide range of world cultures, present in the philosophies of ancient India, Greece, Judea and China. It is based on the understanding of the human condition expressed by John Donne as, “No man is an island, entire of itself …- any man's death diminishes me, because I am involved in mankind; and therefore never send to know for whom the bell tolls; it tolls for thee." We are indeed social animals. There is a view that the current economic situation was precipitated and is perpetuated by a failure within society in general and particularly in the financial community, to maintain the Golden Rule. For those who are not retailers, the upcoming break from normal routine may provide space to reflect on whether the ethic of reciprocity is really still relevant to our society. If it is, is there a personal responsibility to reflect it in the way I conduct my life and business? None of this is easy but as Edmund Burke reminds us, "All that is necessary for the triumph of evil is that good men do nothing." With these merry thoughts ringing in my head, I wish you a happy holiday and a prosperous New Year With kind regards Geoff Nicholson Managing Director, FSP geoff@fspretail.co.uk

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New Retailers Kidrobot has opened its first standalone European store at Seven Dials in Covent Garden

Out The Closet by pop singer Elton John’s Aids Foundation is to open a ‘pop-up shop’ at Covent

Garden for two weeks

Woolworths(.co.uk) may return to the high street as a 200-store chain as brand owner Shop Direct considers launching a bricks and mortar franchise strategy

Store News Amazon has denied a report in The Sunday Times that it plans to open physical stores in the UK

Baguette Express is planning to open 30 new franchised sandwich stores in the Greater Manchester area

Bargain Booze is looking to double the size of its chain of 610 franchised drinks stores over the next

five years

Debenhams is to open in Vietnam as it seeks to bolster its international portfolio

Debenhams has become the first non-food retailer to offer a cash-back service

Domino's Pizza opened its 600th outlet in the UK and Ireland this month

Dreams has embarked on an expansion plan to open 40 shops over the next two years

Dune has unveiled a multi-brand mens-only footwear store in London's West End under the Chelsea Cobbler name it acquired as part of its rescue of Shoe Studio Group earlier this year

Haldane Stores has announced the acquisition of 13 new outlets across the UK as its expansion plans kick into gear

Hobbycraft plans to quadruple the size of its business to 180 stores over the next few years

Hollister is to roll out a new high street retail format in the UK

Jones Bootmakers has launched a new-look store at its Milton Keynes branch

Josef Seibel is looking for a franchise partner to open 10 stores in major towns in the UK and Republic of Ireland in the next five years

Holland & Barrett is to overhaul health food shop Julian Graves' brand and product range from January, as it gears up to make the chain a "specialist food retailer"

Kookai is opening a new-look store as part of its repositioning to expand in the UK

M&Co has unveiled a new-look store concept and pushed the button on a 2010 expansion strategy

Mackintosh is to open its first standalone store in London

Mamas & Papas has signed a deal with Shop Direct Group to sell its maternitywear through the Very.co.uk and Woolworths.co.uk channels

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Mills Group is looking to expand its Tyneside-based chain of 82 convenience stores with up to ten new outlets a year

Musto has opened a concession in the London Regent Street branch of menswear chain Austin Reed

Nokia has been forced to close its flagship Regent Street store due to competition from an Apple store across the road

Paperchase has insisted it will remain largely unaffected by the administration of Borders UK despite operating 38 concessions in the collapsed chain

Pets at Home plans to open 200 out-of-town warehouses

Phones 4 U plans to ramp up its store refits in the new year with the aim of completing the whole chain by the middle of 2010

Phones 4 U is to extend its trial with DSG International with the opening of a second concession within the Currys Megastore in Thurrock, Lakeside

Supergroup

is to make its standalone retail debut in the Republic of Ireland despite the troubled Irish trading climate

Tesco Stores UK plans to open 500 instore phone shops, from 100 currently, with 200 scheduled to be up and running by the end of 2010

Toast has opened a pop-up store in Cheltenham that will become permanent in February

Waitrose is extending a deal to open outlets in Welcome Break-run motorway service stations

Internal Restructuring Blacks Leisure Group Company Voluntary Arrangement (CVA) has been approved by 98% of its landlords at

a creditors meeting

Dunelm Mil founder Bill Adderley has offloaded more shares in the family-run business, transferring around a 10% share of the retailer to his son and Dunelm chief executive Will

Envy is to shut up to 12 underperforming stores and rebrand its remaining shops to Tom Wolfe in the new year

Flannels has announced the approval of a Company Voluntary Arrangement (CVA) proposal that will save 12 stores but see three others close

French Connection is weighing up possible further store closures

John Lewis Direct will be integrated with the chain’s department store business to create a "joined-up customer objective"

Kurt Geiger has relaunched its upmarket sub-brand of the same name as a top-end, better-quality footwear collection

Marks & Spencer plans to buy back £225 million (USD367.29 million) of corporate bonds

Marks & Spencer has re-introduced fresh food counters including a butcher and fishmonger at two of its stores (Bluewater, Dartford and Meadowhall, Sheffield) on a trial basis

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Superdrug plans to launch a loyalty card in the UK next year

Financial Restructuring Astley Clarke is considering seeking further investment next year to bolster growth

Borders has appointed MCR as administrator to Borders UK. All stores are expected to close by

Christmas Eve, though takeover talks for some stores are underway

Cath Kidston is looking for a new majority owner. The new funds will reportedly back an aggressive expansion strategy in the Far East

Effective Cosmetics have decided that they can not keep the Virgin Vie retail stores operating and have closed about half so far. The remainder will close from next month, once they run out of stock or available staff

Escada has been bought by Subco Limited, the wholly-owned subsidiary of the Mittal Trust

First Quench Retailing (Thresher Group)

administrator KPMG has sold the Wine Rack brand and 14 shops to wholesaler Venus Wine & Spirit Merchants. Several other areas of the chain have also been sold, though no buyer for the complete business has been found

Habitat new owners Retail Investments, a consortium headed by Hilco, say they have no plans to shut any stores

Head is understood to be closing its four stores less than a year after opening

JD Sports Fashion has sold its remaining stake in rival retailer JJB Sports

Jessops will be de-listed from the London Stock Exchange before Christmas, it was reported

Leekes (J H Leeke & Sons Ltd)

has acquired Cole's Home Furnishings, the operator of three furniture stores in Bilston, Bedworth and Fenton, and will create a department store format at each site

Matalan has received first-round bids from five top private equity groups

Premium Bars & Restaurants

is close to being rescued from administration by GI Partners

Pubs N Bars has fallen into the hands of administrators and is preparing to slough off some of the weaker outlets in its 87-strong portfolio of community pubs mostly in the South East of England

Whitbread PLC has reached a deal with the board of coffeeheaven international to buy the chain, which will be managed as a subsidiary of the group’s Costa division

General Agent Provocateur is to broaden its target customer group and develop more commercial collections under

the guidance of Kim Winser

All Saints chief executive Stephen Craig said he would "ferociously" protect the retailer's creativity as the company issued a writ against high street retailer River Island. They have also issued similar to Arcadia

Anthropologie UK debut has been hailed a success by parent Urban Outfitters

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ASDA has vowed not to add the UK VAT increase to existing stock of clothing in the New Year when the rate goes back to 17.5%

ASDA has won the rights to sell official World Cup products next summer after its parent Walmart struck a deal with FIFA’s worldwide master licensee

ASOS is gearing up to launch The Green Room, a new section on its site to target ethically minded shoppers and boost ASOS's ethical credentials

Burberry is poised to enter a joint venture with Indian fashion retailer Genesis Colors, pending government approval in India

Burton will axe its premium Black Label for spring 10 after three years

Chanel has had accusations of stealing from a knitwear supplier thrown out by a French court

Comet has launched its first mobile phone site, allowing customers to reserve items and collect products from their nearest store

DSG International is reportedly to sue its own legal advisers for as much as €1m over alleged mistakes in closing down the retailer’s business in France

Fast food The Local Data Company has reported the number of fast-food chains in the top 10 UK cities climbed 8.2% in the year to October - 6.6% more than the previous year

Germany has emerged as the number one target for retailers looking to expand their international presence in Europe, the Middle East and Africa in 2010

Gieves & Hawkes will launch a transactional website in December

Harrods is to sell emerging designers via a new area on the luxury department store's website called Harrods Launches

HMV could make a bid for its live-music partner Mama Group, which is currently the subject of a takeover bid from its largest investor

Hugo Boss backer Permira will not exit the menswear giant for at least a couple of years

Irish shoppers

claim to avidly check receipts to make sure that they are not being ripped off – however over 50% of shoppers still do not ask for a receipt if they are not automatically provided with one

Key staff changes

have occurred at the following retailers this month; Aldi, Aurora Fashions, Crew Clothing, Amazon, John Lewis, Morrisons, Ascension, HMV, JJB Sports, Agent Provocateur, New Look and Sports Direct International

Liberty of London has confirmed it has signed a deal with US value chain Target to create a range of clothing and accessories for the store

Louis Vuitton has opened in Macau’s One Central retail and residential development as part of its planned expansion across the Asia Pacific region

Marks & Spencer is launching a mobile gift website featuring characters from Wallace and Gromit

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Mobile Retailing

One in three UK consumers has tried to shop from their mobile phone but 28% of those shoppers have found it difficult, according to research

Natuzzi has denied involvement in alleged price fixing, for which it has been reported to the Office of Fair Trading

New Look has been found guilty of causing the Oxford Street fire two years ago which gutted the building

Nokia has been forced to close its flagship Regent Street store due to competition from an Apple store across the road

Sainsburys.co.uk is buying 50 more electric vans for its online grocery delivery service, giving it the world’s biggest fleet of electric vehicles

Supermarkets

non-food sales are expected to increase by 40% to £16.2bn in 2014, representing nearly 10p in every pound spent in the grocers

Tesco plc has launched a legal challenge against a subsidiary of Mike Ashley’s Sport’s Direct, after the supermarket giant overpaid for some bicycles

Tesco Stores UK has launched a shop on eBay to sell faulty customer returns that have been repaired along with discontinued electronic lines

The British Retail Consortium

is braced to launch a campaign to ban upward-only rent reviews if its members demand it, after the Irish government scrapped the reviews

Westfield

faces the threat of a second revolt this year by retailers at its Shepherd’s Bush, west London, shopping centre over service charges

Wet weather

in November dampened sales across Britain's leading pub and restaurant groups, according to latest figures

Property Cadena

is thought to have bought the 86,000sq ft Maesglas Retail Park in Newport on behalf of Threadneedle for £12.6m

CIS has sold the Clyde Shopping Centre, near Glasgow, for £69m

Costcutter and the Endless private equity firm have both ruled themselves out of the remaining 500 stores from the First Quench Retailing portfolio

Hammerson

has been appointed preferred buyer of the £300m Silverburn shopping mall near Glasgow in a joint venture with Canada Pension Plan

Henderson Global Investors

and Invista Real Estate Investment Management are to remarket Princes Quay Shopping Centre in Hull, following the collapse of a £65m sale to Hull-based investor Manor Property Group

Land Securities

has bought Yorkshire developer Caddick Developments' 25% stake in Trinity Leeds

Poundland opened its 250th store on 3 December

Tesco plc plans to build its largest store in Ireland have been rejected on appeal

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Retailer Results

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UK Overview ONS Retail Sales

The value of retail sales in November at current prices not seasonally adjusted, increased 2.5% YoY, changing the 3 month moving average to 2.6%, from 2.4% in October. Value of sales through food stores in November increased by 3.4% YoY, compared with 3.8% in October. The value of sales through non-food stores was up 0.7% YoY, down from 1.8% last month. As always, Non-Store Retailing & Repair was the best performing sector, with a YoY increase of 9.7%. After a reasonable increase of 3.4% YoY in October, Clothing & Footwear stores showed only a marginal increase of 0.4% YoY in November.

Please see the Retail & Economic Statistics page on SnapShop for more historical detail

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Internet Retail Sales

Data from ONS for November were unavailable, therefore based on BRC figures, non-food non-retail sales were 16.9% higher in November YoY.

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NB: ONS have recently adjusted historical figures, but have given data only back to October 2008. BRC started reporting in April 2009.

BRC Retail Sales

Year-on-Year (YoY) total UK retail sales values in November increased 4.1%, while like-for-like (LfL) sales increased 1.8%.

Retail sales in central London in November were 13.3% higher on a like-for-like basis than a year ago, when sales had fallen 0.4%, as financial turmoil hit consumer confidence – especially in the City. November's growth was the best since October 2006. Please see the Retail & Economic Statistics page on SnapShop for more historical detail

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Pedestrian Flows

SPSL’s Retail Traffic Index for November increased by 1% MoM against October, and 0.8% against November 2008. Experian FootFall reported a MoM increase of 7.5% and a YoY decrease of 1.9%

Pedestrian Flows - Year-on-Year Change

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In November 2008, FootFall adjusted their benchmarking, and provided revised historical data, as included above.

Interest Rates

In December, the Bank of England’s Monetary Policy Committee once again voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%.

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Please see the Retail & Economic Statistics page on SnapShop for more historical detail

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Inflation

In the year to November, the consumer prices index (CPI) rose by 1.9%, up from 1.5% in October. The more familiar RPI (Retail Prices Index) increased, from -0.8% in October, to 0.3% in November.

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House Prices

According to the Nationwide index, the price of a typical house rose by 0.5% in November MoM. At £162,764, the average price of a typical UK property was 2.7% higher than a year earlier.

NB: YoY figures refer to left hand scale, MoM statistics refer to right hand scale. Please see the Retail & Economic Statistics page on SnapShop for more historical detail

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Consumer Confidence

The GfK NOP Consumer Confidence Index fell by 4 points during November to -17. After a fairly steady rise throughout 2009 the index is 20 percentage points above where it was at the start of the year, but this month is the first time the index has fallen for over a year.

Please see the Retail & Economic Statistics page on SnapShop for more historical detail

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Ireland Overview CSO Retail Sales

At time of writing, the most recently published data were October, when the value of retail sales in current prices, not seasonally adjusted, was 11.8% lower YOY, decreasing the moving YOY 3 month figure to -11% from -10.5% in September. The value of food sales in October decreased to -7.3% YOY, and the value of non-food sales decreased to -17% from -16.4% the previous month.

Please see the Retail & Economic Statistics page on SnapShop for more historical detail

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Inflation in Ireland

In Ireland, HICP remained at -2.8% in November, while CPI increased, to -5.7%.

Irish Inflation (HICP v CPI)

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Please see the Retail & Economic Statistics page on SnapShop for more historical detail.

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And Finally… Butt of a Joke

The North Face Apparel Corp has apparently filed a federal court lawsuit in St Louis against parody brand The South Butt.

The brand, started by a college student to help pay for his fees, sells t-shirts, fleece jackets and sweatshirts with the tagline “Never Stop Relaxing”.

The cease and desist request apparently stated that the companies’ logos are similar enough to cause “confusion”. Honestly now, when was the last time you confused your face with your butt…?

Other mildly amusing parodies discovered when researching this article include; DeadBull to RedBull; Naïve to Evian; and Nescrape to Nescafe!

www.fspretail.co.uk 17/12/09

FSP has gone to its best efforts to ensure this data is correct but the author reserves the right not to be responsible for the accuracy of information provided.

SnapShop Monthly, a benefit of SnapShop Membership, is provided by:

FSP 20 Manor Court Yard Hughenden Avenue

High Wycombe Buckinghamshire

HP13 5RE

Tel: 01494 474740 Email: snapshop@fspretail.co.uk

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