THE desperate attempt to find buyers for all or part of Woolworths was merely the nadir of a day of misery for the UK retail businesses yesterday.
While administrators Deloitte hunted for a buyer for the famous chain's stories, the credit crunch was having a damaging impact on a range of companies across the sector. From electrical goods to DIY and clothing, the effect of the economic slowdow
n was becoming all too evident.
Yesterday's news proved that few, if any, companies in the retail sector will be able to survive the crisis unscathed.
KINGFISHER
Consumers lose their appetite for home improvements HOME improvements giant Kingfisher yesterday disclosed that sales at its main B&Q business were down nearly 9 per cent amid the slump in consumer spending.
It said the like-for-like figure – based on those stores trading for more than a year – reflected a 14 per cent slide in sales of kitchen and bathroom units and weak demand for seasonal ranges following poor weather in August.
Kingfisher's third-quarter numbers showed like-for-like sales at the UK division, which also includes the trade business Screwfix, were down 9.2 per cent in the 13 weeks to 1 November.
Trading profits fell £9 million to £36m, as cost initiatives helped the company offset falling sales.
Kingfisher runs more than 800 stores in eight countries. Group profit from continuing operations before central costs, one-off items and goodwill topped £176m, a rise of 8.3 per cent, slightly ahead of City hopes though shares fell 2.4 per cent.
Chief executive Ian Cheshire said: "Consumer confidence has been shaken over the last few months by international economic events and this has impacted demand in our markets."
Sales in China were down 28.7 per cent after the company closed four stores and downsized another as part of a store reorganisation programme.
Kingfisher said the Chinese market continued to deteriorate and was likely to be weaker for longer than expected.
DSG
Currys and PC World owner loses its spark DSG International, owner of the Currys and PC World electrical chains, swung to its first interim loss for at least 25 years yesterday, axed its dividend and described the outlook for the new year as "uncertain".
During the first half, like-for-like sales across the group fell by 7 per cent.
DSG, which also owns the Elkjop chain in the Nordic region and UniEuro in Italy and ranks as Europe's second-largest electrical goods retailer, posted underlying losses of £29.8 million for the 24 weeks to 18 October. The shortfall compares with a profit of £52.4m a year earlier.
The group said it was bracing itself for a "recessionary environment" and warned that the outlook for the peak Christmas trading period – when it traditionally banks the bulk of its profits – was uncertain. Chief executive John Browett said DSG was prioritising cash generation as well as tightly managing stock, margins and costs.
Shares in the group, which operates 1,200 shops and online stores in 28 countries, have been hit by the sharp fall in demand for big ticket items such as washing machines, televisions and PCs, as well as worries over US rival Best Buy's entry into Europe next year. DSG's UK computing division – including PC World – was left nursing an 11 per cent sales decline, although the group said this was set against strong comparative trading last year.
There was some cheer as DSG's programme of store revamps under Browett's plans to put the firm on a stronger footing bore early fruit. Stores opened under the new format for more than a month were trading up to 25 per cent ahead of the rest of the group, DSG said.
The group's shares fell 10.7 per cent to close at 12.5p. Keith Bowman, an equity analyst at Hargreaves Lansdown, said: "Like-for-like sales are in decline and the outlook remains highly uncertain."
MOSS BROSRETAIL tycoon Sir Philip Green has ruled out an imminent bid for Moss Bros, two weeks after fuelling speculation by snapping up a 28 per cent stake in the menswear chain. In a blow to Moss Bros, the Bhs and Topshop owner said he had "no current intention" of making an offer for the retailer.
Green's stake was bought from stricken Icelandic investment group Baugur. Shares in Moss Bros dived 37 per cent after the announcement by Green's holding company, Warbeck.
Baugur suffered from the collapse of Iceland's economy and the nationalisation of its major bank, Glitnir. Its woes sparked fears over its many high street UK retail assets, which also include Oasis, Principles and Karen Millen.
HRG ARGOS owner Home Retail Group has bought household names Alba and Bush from their struggling owner for £15.25 million.
Elstree-based distributor Alba had planned to stop supplying both electronics brands, but Argos stepped in to snap up the trademarks popular with consumers looking for cheaper stereos and TVs.
The sale leaves Alba – which is changing its name to Harvard International under the deal – with the Goodmans brand and the right to distribute Grundig products in the UK.
The disposal comes amid collapsing sales of consumer electronics goods in an "increasingly challenging" climate, adding to Alba's existing headaches.
