Britain’s high street woes show no sign of easing. Thorntons is the latest retailer to reveal plans to close lots of stores – possibly as many as 180 – in the face of melting sales. Carpetright’s also planning to reduce its store portfolio – while things are even worse for department store chain TJ Hughes, which is apparently about to call in the administrators. Only days after Habitat and Homeform said they were shutting up shop, that’s a triple whammy the UK retail sector really didn’t need. Britain may be in the middle of a heat wave, but it’s looking like a miserable summer for the high street.
Thorntons intends to close at least 120 stores over the next three years, while the future of another 60 also hangs in the balance. This will leave the chocolate retailer with about 200 stores – just over half its current number – and could put 1,125 jobs at risk. It’s been showing signs of distress for a few months now: like many retailers, it blamed the icy snap over Christmas for a fall in sales. But hot weather hasn’t helped: Easter usually accounts for about a third of its sales in the first part of the year, but Thorntons blamed the sunshine for a 22.8% drop in like-for-like sales. Chief executive Jonathan Hart said there had been a ‘significant change’ in customer shopping behaviour.
Further dismal news comes from TJ Hughes: the 100-year-old department chain, which has 57 stores across the UK and employs 4,000 staff, has announced it intends to call in the administrators. It’s been feeling the pinch for a while now: last year it lost more than £10m and was already on the brink of collapse when it was bought out by private equity firm Endless in March. But clearly sales have failed to revive sufficiently under the new ownership.
And then there’s Carpetright, which said today it would be reducing stores after pre-tax profits dropped 70% from £22m to £6.6m in the year to April. Apparently, cash-strapped consumers have decided that a new carpet is something they can do without. That’s not particularly surprising; the whole homewares sector has been hard hit lately, as the recent travails of Habitat and Homeform (which owns Moben Kitchens and Dolphin Bathroom) prove.
But with consumers tightening their belts across the board – as factors like high inflation and slow wage growth squeeze spending – many retailers are feeling similar pressures. It’s going to be a long, grim year for the high street…