‘Panicking’ stores launch sales that could last till CHRISTMAS

Fashion retailers have launched a series of early ‘panic’ autumn sales and promotions that could last all the way to Christmas.

The relatively warm September means there has been no demand for knitwear and coats, putting pressure on a number of chains to offer price cuts on autumn season stock.

At the same time, the number of shoppers visiting high streets continues to fall as they switch to web stores. 

 M&S, Next, New Look, Asos, Debenhams and H&M were among those offering substantial discounts this week with up to 60 per cent off autumn stock. 

The US chain Gap is going further with a ‘mid-season sale’ boasting of savings up to 70 per cent.

 The recent sale of the House of Fraser department stores to the owner of Sports Direct, Mike Ashley, for a cut price £90million is evidence of the difficulties faced by traditional bricks and mortar stores.

Famous names such as M&S, Mothercare and New Look have closed stores while other names including Bhs, East, Toys R Us and Maplin have vanished completely from high streets.

Retail analyst Richard Hyman said conditions are so tough that he expects other retailers to fail before the end of the year.

‘We’re living in a world of tremendous uncertainty and that tends to breed panic, and we’re seeing quite a lot of that,’ he said. 

‘This market is not going to get less promotional. I’ll be astonished if there are not more casualties between now and end of year.

‘I don’t think [any retailer] should be relying on Christmas to bail them out. Against the background of tremendous political uncertainty, why on earth would consumers be confident?’

One industry insider told the Drapers website, which follows the fortunes of the fashion industry and retailers: ‘It’s highly unusual that Next has gone on sale because it’s usually one of the strictest. It doesn’t really make sense to do sales at the end of September.’ 

The BDO High Street Sales Tracker reported a 3 per cent fall in annual sales for the fashion sector in August, the worst performance in three years.

BDO’s Sophie Michael said: ‘For the consumer, it is a question of priorities. In a climate of rising interest rates, prices rising and subdued real wage growth, there is limited discretionary spend left and that is taking its toll on fashion and homeware sales.’

Retailers say the current business rates regime, which punishes firms with bricks and mortar stores and so gives a financial edge to online retailers, needs to be replaced.

The British Retail Consortium fears its members’ rates bill will rise by £190million from April next year, taking the total over £7billion.

The BRC’s Tom Ironside said: ‘These figures would mean severe consequences for the retail industry. Business rates are leading to store closures and hindering the successful reinvention of high streets.’ 

He called for the Chancellor to take action to help shops in the Budget.

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