UK Retail Briefing - July 2004

ANALYST COMMENT
Marks & Spencer
Appearances and reality
The real problem
RETAIL REVIEW
 FOOD AND DRINK
Tesco
Strong first quarter
Targeted by environmental group
Launches Gi range
Conversion programme on track
ASDA
Cuts spark fuel price war
New stores to participate in home shopping
Launches non-food own-label range
Enters health insurance market
Sainsbury’s
Full-year profits decline…
…leading to management changes
Modernisation programme
Focusing on the UK market
Acquisitions boost store numbers
Home shopping business breaks even
To trial new delivery system
Adams to design Tu range
Opens second ‘Sainsbury’s at Bells’ store
Morrisons
Safeway sales decline…
…but Morrisons stores perform well
More conversions planned
Launches advertising campaign
The Big Food Group
Strong full year results
Iceland like-for-like sales up…
…boosted by store refits
Wholesale operations perform well
Current trading
Withdraws bid for Londis
Launches ‘Iceland Live’
Waitrose
Acquisition cleared
Somerfield
Conversion programme boosted by acquisition
Londis
Members back Musgrave bid
Receives rival bid
Majestic
Like-for-like sales up
French operation registers growth
Launches ‘fine wine centre’
Current trading
Unwins
Launches new format
United Co-operatives
First refits completed
Channel Islands Co-op
To open new Grand Marché stores
 MIXED GOODS
Marks & Spencer
Chairman departs…
…followed by appointment of Bostock as womenswear head
Reports less-than-impressive full-year results
Clothing sales remain weak…
…as the Home offer disappoints…
…while Food stores perform well
M&S looking to revive sales
Philip Green’s plans revealed
Rose is appointed Chief Executive…
…and Luc Vendevelde leaves the group
M&S rejects Green’s indicative bid
Green returns with new offer
Radice leaves…
…and management shake-up continues
Woolworths
Sees sales rise
Like-for-like sales boosted by refits
Wilkinson
Sales up
Brown & Jackson
Issues trading statement
 DEPARTMENT STORES
House of Fraser
Trading update
To open new store
Harrods
To run new promotional event
Fortnum & Mason
Looking at international markets
John Lewis Partnership
Extended trading hours at Peter Jones
JR Taylor
Changes hands
 MULTI-SECTOR
GUS
Reports profits surge
Argos registers strong performance
Homebase like-for-like sales up
To float Experian?
Merchant Retail Group
Strong 2003/04
The Perfume Shop sales boosted by refits
Department stores’ sales decline
Investing for growth
 ELECTRICAL GOODS
Dixons Group
Acquires Micro Warehouse UK
Kesa Electricals
First quarter sales up…
…driven by its international operations
Maplin Electronics
Unveils new store concept
Pacific Retail Group
Looking to raise cash
The Carphone Warehouse
Reveals strong full year results…
…and maintains a positive outlook for the UK market
…while its international operations are growing
German businesses restructured by acquisition
Store network to expand
Orange
Trading update
 FURNITURE AND HOUSEHOLD GOODS
DFS
Chairman to table new offer?
MFI
Sees sales slide
Courts
Reports full-year loss
UK business “underperforms”
International like-for-like sales up
Reorganises finances
Deputy Chairman steps down
Current trading
Cargo HomeShop
Acquired by Freedom Group
 DIY
Kingfisher
First quarter results ahead
Strong results in Poland
Enters the Russian market
Topps Tiles
Announces half-year results
Robert Dyas
Registers growth
 BOOKS AND MUSIC
WH Smith
Suspends bid talks with Permira
To sell Hodder Headline
Completes Asia Pacific sale
Cinven to table offer?
Borders
To expand store portfolio
Business reorganisation
Virgin Megastores
Closing stores
Music Zone
Launches ‘Music Bug’ kiosks
Apple
iTunes launched
 SPORTS GOODS
Roots
Launches first UK store
SweatyBetty
Opens HOF concession
 JEWELLERY
Signet Group
Like-for-like sales growth
Goldsmiths
Expansion plans
Theo Fennell
Reports sales growth
Partners with Debenhams
 HEALTH AND BEAUTY
Boots
Full-year sales ahead
Healthcare sales driven by promotions
International sales up
Strengthening offer
Investing on growth
The Body Shop
Introduces loyalty scheme
Fushi
Seeking funds
Ritual
To launch in the UK?
 OPTICAL AND PHOTOGRAPHIC GOODS
Vision Express
Launches advertising campaign
 MISCELLANEOUS
Halfords
Floats on LSE
BAA
Posts sales increase
Harmony
To open new store
Pets at Home
Up for sale?
Antler
Sold to MBO
 HOME SHOPPING
Ideal Shopping Direct
Trading update
Firebox
Partners with Game
Extreme Group
Considering acquisitions?
price-drop.tv
Planning expansion
Sport-E
Relaunches Website
 ON THE MOVE
Beale
Fortnum & Mason
Harrods
HMV Group
House of Fraser
Jacques Vert
Kingdom of Leather
LVMH
MFI
Morrisons
Sainsbury’s
Somerfield
United Co-operatives
RETAIL MARKET ANALYSIS
 RETAIL SALES TRENDS
Figure 1: Retail sales trends: May 2003-May 2004
Figure 2: Retail sales trends: May 2003-May 2004
 BREAKDOWN OF SALES BY SECTOR
Figure 3: Retail sales value trends by sector: May 2003-May 2004
Figure 4: Retail sales volume trends: May 2003-May 2004
 RETAIL PRICE INFLATION TRENDS
Figure 5: Annual percentage change in retail price index for selected product groups: May 2003-May 2004
Figure 6: Annual percentage change in retail price index for selected product groups, May 2003-May 2004
 THE FOOTFALL NATIONAL INDEX (UK)
Figure 7: FootFall shopping centre index (UK), May 2004
 MATRIX
Value
Volume
SECTOR ANALYSIS: CLOTHING AND FOOTWEAR
Figure 8: Clothing and footwear retailers: Sales trends, 1996-2003
Figure 9: Clothing and footwear: Sales trends, 1996-2003
Retail price inflation
Figure 10: Indices of retail prices for product categories, 1998-2004
Figure 11: Monthly inflation rates for selected product categories, June 2003-May 2004
 BREAKDOWN OF SALES BY SUB-SECTOR
Figure 12: Clothing and footwear retailers: Breakdown of sales, by sub-sector, 1998-2004
Figure 13: Clothing and footwear retailers: Breakdown of sales, by sub-sector, 1998-2004
Consumer expenditure
Figure 14: Consumer expenditure on selected product categories, 1995-2003
Figure 15: Consumer expenditure on selected product categories, 1995-2003
 CLOTHING RETAILERS: LATEST TRENDS
Figure 16: All clothing retailers sales trends, 1998-2004 (% change on same period in previous year)
Figure 17: All non food specialist: Sales trends, 1998 -2004
 LARGE CLOTHING RETAILERS: LATEST TRENDS
 SMALL CLOTHING RETAILERS: LATEST TRENDS
 FOOTWEAR RETAILERS: LATEST TRENDS
 TEXTILE RETAILERS: LATEST TRENDS
SECTOR NEWS: CLOTHING AND FOOTWEAR
 COMPANY RESULTS
Figure 18: Latest full-year results – Clothing and footwear
 MERGERS AND ACQUISITIONS
Figure 19: Clothing and footwear – recent mergers and acquisitions
 COMPANY NEWS
Next
Reports double-digit profit growth
Retail sales up
Opens store in Denmark
To extend product offer
Trading update
To move Brent Cross store?
Signs for new store
Less clearance stores needed
Laura Ashley
Returns to the black
Home furnishings perform well
Held back by fashion sales
International operations
Mail order and e-commerce
Current trading
To ditch mail order?
Homewares launch at Kohl’s
To roll out new look fashion stores
European disposals
Austin Reed
Shows signs of improvement
But sales decrease at Country Casuals
Country Casuals rolls out new shopfit
Appoints new Chief Executive
Trading update
Looking to extend product range
Harold Tillman may look at acquisition
Arcadia
Launching new collections
Alexon
Delivers profit growth
Alexon Brands sees profit growth
Footwear sales up
Current trading
Moss Bros
Back in the black
Moss Bros Hire performing well
Current trading
Store closures
Refurbishing stores
Cecil Gee to trial new format
To drop Moss label
Chief Executive steps down
Monsoon
To sell menswear
Record H1 profit
International expansion
Accessorize opens store in Stockholm
Finance director resigns
More superstores planned
Oasis
Lingerie areas to roll out
To enter the Chinese market
Ciro Citterio
Sold to Indorama Group
Launching new brands
River Island
Opens store in Turkey
Bhs
To open international outlet
New Look
Shareholders approve takeover
Sales disappoint
In-store nail bars and coffee shops to open in stores?
Peacock Group
Sees sales fly ahead
Refurbishment programme continues
Acquires The Fragrance Shop
Extends homewares concept trial
In talks with Woolworths
To expand in the UK and the Republic of Ireland
To improve menswear offer
Matalan
Full-year profits halved
Retail sales up
New store openings
Current trading
Refurbishment plans
To sell Lee Cooper?
Primark
Strong full year results
Acquires stores
Ethel Austin
Acquired by ABN Amro
Makes good progress
Autonomy
Plans expansion
QS
New store design set to be rolled out
TK Maxx
Reports strong sales
To launch standalone stores
Opens new distribution centre
New storefit planned
Inditex
Plans to expand
Acquires second store in Ireland
Etam
Difficulties in the UK
UK business up for sale?
New Leicester store
In talks with Barratts for concessions?
Mango
Sales rise
C&A
Considers return to the UK
H&M
To open new flagship store
Mexx
Expanding in the UK
Hugo Boss
Franchise expansion planned
Eden Park
To open stand alone stores
Esprit
To launch franchised stores
Uniqlo
Profits up at Fast Retailing
To open new UK stores?
Neck & Neck
Franchise network planned for the UK
Guess?
Relaunches UK store
Urban Outfitters
Prepares for aggressive expansion
Fat Face
To expand store network
Reports growth
White Stuff
Plans to increase Internet sales
Expansion plans
Crew Clothing
Expands overseas
Chatham
To expand store network
BaseBuy
Converting stores
USC
Acquired by West Coast Capital
Forminster
Registers operating loss
In-house designs
Launches new concessions
Trialing larger sizes
Jigsaw
To open standalone accessories store?
Set to roll out more Kew stores
Naughty Clothing
Sold back to Harry Rogers
All Saints
Opening new stores
Coast
Store expansion
Rubicon
Profits rise
Warehouse to debut footwear collection
Jacques Vert
Sales down 10.5%
Microtherm disposal
Phase Eight
Posts strong results
Suits Plus
Expansion on the cards following revamp
East
Signs concession deals
Hobbs
Reports growth
To open new stores
Unveils plans to enter US and Middle Eastern Markets
Episode
Diffusion line EPS to debut on the high street
Ben Sherman
Plans to increase UK stores
French Connection
Reveals robust trading
US “encouraging improvement”
Planning standalone stores
Seeking lingerie partner
Launches radio station
Burberry
Goes from strength-to-strength
Turnover boosted by store openings
US business performs well
Burberry to bid for Laura Ashley?
Jaeger
To float?
To open new stores
Ted Baker
Strong retail performance
Current trading
Opens Endurance standalone store
Blue Inc
Seeking funds
Reefer
To open new stores
TM Lewin
To open flagship womenswear outlet
Republic
Receives investment boost…
…following a period of strong trading
High and Mighty
Plans return to profitability next year
Officers Club
Last minute shoppers help Christmas sales
Aquascutum
To revamp Regent Street store
Jane Norman
New store
Pilot
Up for sale?
Recruits in-house designer team
Switches sourcing back to the UK
Boxfresh
New flagship store planned
Penny Plain
Management buy-out
The Duffer of St George
Looks for London flagship store
Kurt Muller
Launching first stand-alone stores
G-Room
First store to open in September
Hawick Cashmere
Looking for sites
Dawson International
Sells Ballantyne
Broken Stones
Opens third store
Elizabeth Rose
Second store opens
Louis Vuitton
Reopens Sloane Street store
Jones
Goes into administration
Emma Somerset & French Dressing
Sold to MBO
Refurbishing stores
The Glasshouse
Expansion plans
Marchpole Holdings
Makes profit
Acquires Jean-Charles de Castelbajac
Martin Margiela
Plans to open a store in the UK
MaxMara
Flagship store planned for Bond Street
Matthew Williamson
London flagship store planned
Pal Zileri
Opens new London store
Jane Norman
Trials new concept
Mackintosh
To open standalone store
Bank
Expansion plans
Actif Group
Pre-tax profits jump
Barbour
To open standalone womenswear store
Mothercare
Returns to profits
Revamping its store portfolio…
…and product offer
Direct business posts profit
Current trading
Developing international operations
Introduces new store format
Petit Patapon
To open new UK stores
Mamas & Papas
Profits rise
La Senza
To expand European operations
Virginware
20 new stores planned for 2004
Figleaves
To open stores?
Successful Christmas
Agent Provocateur
Expansion plans
Jimmy Choo
Unveils new store design
Brantano
UK division drives sales
Faith
MBO talks fail?
Beautiful Otherness introduced to Meadowhall
Expanding in Middle East
Schuh
Sold to MBO
Dune
To open new concessions
Walk
Due to open new store
C&J Clark
Reports profits growth
Office
To increase store numbers
LK Bennett
Sales rise
To open store in Portsmouth
Rumours of a buy-out
Stylo
Sees profits drop
Barratts underperforms
Shellys planning concessions
Shoe Studio
Considering opportunities for growth
Kurt Geiger
Opens new stores
Stead & Simpson
Plans to take chain upmarket
KEY TOPIC: M&S – HAS THE RECOVERY RUN OUT OF STEAM?
 INTRODUCTION
 CONSUMER RESEARCH
Frequency of shopping at M&S
Figure 20: Shopping for outerwear at Marks & Spencer, June 2004
Figure 21: Shopping for outerwear at Marks & Spencer, by gender, age and socio-economic group, June 2004
Figure 22: Shopping for outerwear at Marks & Spencer, by presence of children, working status, lifestage and Mintel’s Special Groups, June 2004
Figure 23: Shopping for outerwear at Marks & Spencer, by region and source of regular grocery shopping, June 2004
Which shops are being visited more frequently for outerwear?
Figure 24: Leading shops visited more often than a year ago for outerwear, June 2004
Figure 25: Leading shops visited more often than a year ago for outerwear, by gender, age and socio-economic group, June 2004
Figure 26: Leading shops visited more often than a year ago for outerwear, by gender, age and socio-economic group, June 2004
Figure 27: Leading shops visited more often than a year ago for outerwear, by presence of children, working status, lifestage and Mintel’s Special Groups, June 2004
Figure 28: Leading shops visited more often than a year ago for outerwear, by presence of children, working status, lifestage and Mintel’s Special Groups, June 2004
Figure 29: Leading shops visited more often than a year ago for outerwear, by region and source of regular grocery shopping, June 2004
Figure 30: Leading shops visited more often than a year ago for outerwear, by region and source of regular grocery shopping, June 2004
What would make shoppers shop more often at M&S?
Figure 31: What would make people shop more often at Marks & Spencer, June 2004
Figure 32: What would make people shop more often at Marks & Spencer, June 2004
Figure 33: What would make people shop more often at Marks & Spencer, by gender, age and socio-economic group, June 2004
Figure 34: What would make people shop more often at Marks & Spencer, by gender, age and socio-economic group, June 2004
Figure 35: What would make people shop more often at Marks & Spencer, by presence of children, working status, lifestage and Mintel’s Special Groups, June 2004
Figure 36: What would make people shop more often at Marks & Spencer, by presence of children, working status, lifestage and Mintel’s Special Groups, June 2004
Figure 37: What would make people shop more often at Marks & Spencer, by region and source of regular grocery shopping, June 2004
Figure 38: What would make people shop more often at Marks & Spencer, by region and source of regular grocery shopping, June 2004
 CONCLUSIONS