UK Retail Briefing - May 2007

ANALYST COMMENT
 PLANNING
What it actually means
Small shops and the interests of consumers
Who is trying to protect who?
Straws in the wind
No meeting of minds
INTRODUCTION
 BAKERS (RETAIL)
Greggs LFLs up 5%
 GROCERS
Asda…
… bans additives
… set for conflict about over-packaged goods
… set to open 300 home stores
Sainsbury's
… stake snapped up by Three Delta
… to retain property
… FY sales surge ahead
… accused of flouting hygiene rules
Morrisons…
… next buyout target?
… but CVC denies interest
… Q1 LFLs up 4%
Tesco
… faces allegations of hypocrisy on green plans
… abandons Coles bid
… investor forces ethics onto the agenda
… could lose tax loophole
 CLOTHING RETAILING
Burberry FY sales up 14%
French Connection shows improved sales
Mosaic
… FY sales up, profits down
… could be privatised
Moss Bros LFLs down 0.8%
Mothercare
… buys ELC for £85m
… posts mixed FY results
US firms join forces for New Look bid
 FOOTWEAR RETAILING
Clarks FY profits hit by EU tariffs
Stylo losses widen
 MIXED GOODS RETAILING
Home Retail reports mixed FY results
Woolworths to supply Asda
 MULTI-SECTOR RETAILING
Boots
… bid abandoned by Terra Firma
… pension trustees place KKR under pressure
… FY sales, profits up
… pension trustees demand £1bn
… faces acquisition concerns
… sees KKR fail to meet trustees’ demands
M&S
…to open standalone furniture stores
…unveils strong FY results
Next continues to struggle
 DEPARTMENT STORES
Beales issues profit warning
 DIY RETAILING
US DIY giant set to save Focus?
Home Retail reports mixed FY results
Wickes LFLs storm ahead
 ELECTRICAL RETAILING
Kesa Q1 LFLs boosted by flat screen sales
Italian troubles hit DSG
 MUSIC AND VIDEO GOODS RETAILING
HMV FY sales fall further
 CARPET RETAILING
Carpetright grabs smaller rival
 FURNITURE RETAILING
Land of Leather Q3 LFLs fall
ScS H1 profits slump
 HOME SHOPPING
Asos sales jump 111%
Findel FY sales up 11%
N Brown posts strong FY results
 SPORTS AND LEISURE GOODS RETAILING
JD FY profits race ahead
Blacks Leisure suffer disappointing FY
Sports Direct
… issues profit warning (perhaps)
… admits messing up float
 TOYS AND GAMES RETAILING
Game Group FY LFLs up 16%
Blockbuster sells Gamestation for $150m
EXECUTIVE APPOINTMENTS
Dolcis poaches Bower from Priceless Shoes
Former Next chief joins Littlewoods
TK Maxx appoints Shoefayre MD
Figleaves.com search for new CEO
HoF appoints new brand director
Instore appoints new chief executive
B&Q supply chief out
Hot Tuna appoints Juul
Londis tests new format; FD quits
Foyles appoints temporary CEO
John Lewis promotes Gregory
Asda promotes Pearson
Rosebys to lay off head office staff
Body Shop hires internet manager
Games Workshop to fire managers
Jessops appoints new chairman
Harrods marketing director quits
Planet Organic appoints two directors
Liberty
…CEO in shock departure
…appoints new CEO
Waitrose MD leaves to join M&S
Superdrug names trading director
PRODUCT DEVELOPMENT – HOUSEHOLD GOODS
 ALDI
 ASDA
 SAINSBURY’S
 TESCO
 WAITROSE
ADVERTISING NEWS
 NEW CAMPAIGNS
Katona dropped by Iceland
Bookshops to target ethnic minorities
Moss Bros teaming up with Paddy Power
Spar turns 50 with promo drive
HMV and Ryan Adams promo
M&S confirms Ferry decommission
Ilva launches ad campaign
Spar to give tree packs away
Perfume Shop signs first TV deal
The Kate Moss effect
Daly and Kay to front Tesco campaign
Morrisons reveals new logo
Woolworths pins hopes on Rolf Harris and Darth Vader
 ACCOUNT GAINS/LOSSES
Ethel Austin talking to agencies
Next for Mediaedge
Clarks seeks digital agency for e-commerce move
Body Shop seeks agency
HMV Group
… appoints OMD to media businesses
… appoints Brann for loyalty scheme
DSG International appoints Affiliate Window
RETAIL ADVERTISING REVIEW
 ADVERTISING EXPENDITURE
Figure 1: Total advertising expenditure by all advertisers (£m), March 2003-March 2007
Figure 2: Total advertising expenditure by all retail advertisers (£m), March 2003-March 2007
USE OF MEDIA
Figure 3: Use of media by retail and all advertisers (%), March 2003-March 2007
Figure 4: Use of media by retail and all advertisers (£m), March 2003-March 2007
 TOP 25 RETAIL ADVERTISERS
Figure 5: Top 25 retailers by adspend (£), February 2007-March 2007
Food
Furniture
DIY
Variety
Other
Nielsen Media Research/Definitions
RETAIL SALES AND INFLATION
 RETAIL SALES
Office for National Statistics
Figure 6: Retail sales trends: April 2006-April 2007
Figure 7: Non seasonally adjusted % value change on previous year, April 2006-April 2007
Figure 8: Seasonally adjusted % volume change on previous year, April 2006-April 2007
Significant features of the latest ONS statistics
Confederation of British Industry
British Retail Consortium/KPMG
 RETAIL PRICE INFLATION TRENDS
Figure 9: Annual percentage change in retail price index for selected product groups: April 2006-April 2007
Figure 10: Annual percentage change in retail price index for selected product groups: April 2006-April 2007
Retail Prices Index
Consumer Prices Index
British Retail Consortium: Shop Price Index
SECTOR ANALYSIS – NON-FOOD SPECIALISTS
Sales trends
Figure 11: Non-food specialist retailers, sales trends, 1998-2007 Q1
Figure 12: Non-food specialist retailers as % of all retail sales: 1997 – 2006
Retail price inflation
Figure 13: Indices of retail prices for product categories, 2000-2007 (Jan 1987=100)
Breakdown of sales by sub-sector
Figure 14: Non-food specialists: Breakdown of sales by sub-sector, 1999-2006
Consumer expenditure
Figure 15: Consumer expenditure on selected product categories (£m), 1998-2006
Chemists: latest trends
Figure 16: Health and beauty retailers’ sales, 2003-06
Books, newspapers and stationery: latest trends
Figure 17: Booksellers’ and stationers’ sales, 2003-06
Floor coverings: latest trends
Figure 18: Floor coverings retailers’ sales, 2003-06
Photographic and optical goods, office supplies stores: latest trends
Figure 19: Photographic retailers’ sales, 2003-06
Figure 20: Leading optical retailers, 2005
Other
Figure 21: Sports and outdoor leisure retailers’ sales, 2003-06
Figure 22: Toys and games retailers’ sales, 2003-06
Figure 23: Jewellers’ sales, 2003-06
SECTOR NEWS REVIEW: NON-FOODS RETAILING
 DECEMBER
 BOOK AND STATIONERY RETAILING
Clinton Cards reports like-for-like rise
Stationery Box sold to Hilco
HMV updates like-for-likes
 SPORTS AND LEISURE GOODS RETAILING
Strikes return at JJB
Sports World
… owner mulls sale/flotation
… owner reveals plans; self
… buys Streetwise Sports
 TOYS AND GAMES RETAILING
Hamleys reneges on discount pledge
 TELECOMMUNICATIONS RETAILING
The Link moves online
UK: Carphone reclaims 40% of Vodafone business
 JANUARY
 BOOK AND STATIONERY RETAILING
Pre-Christmas sales please Clinton Cards
Music Zone, Greeting Card Group enter administration
Greeting Card Group sold in MBO
WH Smith reports further sales decline
 SPORTS AND LEISURE GOODS RETAILING
Sales continue to grow at John David
Sports goods retailers face compensation claim
Christmas sales disappoint Blacks Leisure
JJB Sports reports pleasing Christmas results
 JEWELLERS
Signet’s like-for-likes rise
Theo Fennell reveals record Xmas
 GARDEN CENTRES
Blooms of Bressingham
…pleased with Xmas trading
…and enters takeover talks
Christmas sees Dobbies’ sales jump over 30%
 TOYS AND GAMES RETAILING
An impressive Christmas for Game Group
Hamleys' boosted by festive sales
 MISCELLANEOUS SPECIALIST RETAILING
Jessops’ like-for-likes disappoint for December
 FEBRUARY
 BOOK AND STATIONERY RETAILING
Stationery Box enters administration
 SPORTS AND LEISURE GOODS RETAILING
JJB
…sees founder sells £50m share
…but faces Which? lawsuit
Sports World
...mulls float
…before Ashley cancels dividend
…then confirms float
…and reveals he’ll relinquish leadership
 GARDEN CENTRES
Blooms of Bressingham
…bought by Hunter for £30m
…who looks to create a gardening revolution
Dobbies reports solid growth
 MARCH
 BOOK AND STATIONERY RETAILING
Borders puts UK business up for sale
 SPORTS AND LEISURE GOODS RETAILING
Blacks closing 45 loss-making stores
Sports Direct plans global expansion
 JEWELLERS
Bijou Brigitte plans 300 UK stores
 TOYS AND GAMES RETAILING
Hamleys to test concessions in HoF
Toyworld enters administration
 APRIL
 BOOK AND STATIONERY RETAILING
Branson considers Borders' bid
Clinton Cards posts solid H1
WH Smith high street woes continue in H1
 SPORTS AND LEISURE GOODS RETAILING
JJB reports strong year
Sports Direct poised to buy M and M
 JEWELLERS
Signet posts record FY profits
 GARDEN CENTRES
Dobbies H1 sales blossom
 TOYS AND GAMES RETAILING
ELC plunges further into the red
 MISCELLANEOUS SPECIALIST RETAILING
Halfords reports another strong year
Pets at Home sees FY success
 MAY
 MUSIC AND VIDEO GOODS RETAILING
HMV FY sales fall further
 SPORTS AND LEISURE GOODS RETAILING
JD FY profits race ahead
Blacks Leisure suffer disappointing FY
Sports Direct
… issues profit warning (perhaps)
…admits messing up float
 TOYS AND GAMES RETAILING
Game Group FY LFLs up 16%
Blockbuster sells Gamestation for $150m
SECTOR ADVERTISING REVIEW – NON-FOOD SPECIALISTS
 ADVERTISING EXPENDITURE
Figure 24: Total advertising spend by non-food retailers, March 2003-March 2007
 USE OF MEDIA
Figure 25: Use of media by non-food retailers and all retailers (%), March 2006-March 2007
Figure 26: Use of media by non-food retailers and all retailers (£m), March 2006-March 2007
 BOOKS AND STATIONERY RETAILERS
Figure 27: Top ten books and stationery retailers by adspend, March 2006 and March 2007
Company analysis – WH Smith
Figure 28: WH Smith, media use by adspend and as share of total, March 2006 and March 2007
Figure 29: WH Smith, top brands by adspend, March 2007
 SPORTS AND LEISURE GOODS RETAILERS
Figure 30: Top ten sports and leisure goods retailers by adspend, March 2006 and March 2007
Company analysis – JJB Sports
Figure 31: JJB Sports, media use by adspend and as share of total, March 2006 and March 2007
Figure 32: JJB, top brands by adspend, March 2007
 JEWELLERS
Figure 33: Top ten jewellers by adspend, March 2006 and March 2007
Company analysis – Tiffany & Co
Figure 34: Tiffany & Co, media use by adspend and as share of total, March 2006 and March 2007
Figure 35: Tiffany & Co, top brands by adspend, September 2006
 GARDEN CENTRES
Figure 36: Top ten garden centres by adspend, March 2006 & March 2007
Company analysis – Garden Factory
Figure 37: Garden Factory outlet, media use by adspend and as share of total, March 2006 and March 2007
Figure 38: Garden Factory outlet, top brands by adspend, March 2007
 CHEMISTS (HEALTH AND BEAUTY RETAILERS)
Figure 39: Top ten chemists by adspend, March 2006 and March 2007
Company analysis – Superdrug
Figure 40: Superdrug, media use by adspend and as share of total, March 2006 & March 2007
Figure 41: Superdrug, top brands by adspend, March 2007
 TOYS AND GAMES RETAILERS
Figure 42: Top five toys and games retailers by adspend, March 2006 and March 2007
Figure 43: Top video games retailers by adspend, March 2006 and March 2007
Company analysis – Toys R Us
Figure 44: Toys R Us, media use by adspend and as share of total, March 2006 and March 2007
Figure 45: Toys R Us, top brands by adspend, March 2007
 OPTICAL RETAILERS
Figure 46: Top Ten optical goods retailers by adspend, March 2006 and March 2007
Company analysis – Specsavers
Figure 47: Specsavers, media use by adspend and as share of total, March 2006 and March 2007
Figure 48: Specsavers, top brands by adspend, March 2007
 MISCELLANEOUS RETAILERS
Figure 49: Top two miscellaneous retailers by adspend, March 2006 and March 2007
Company analysis – Halfords
Figure 50: Halfords, media use by adspend and as share of total, March 2006 and March 2007
Figure 51: Halfords, top brands by adspend, March 2007
Nielsen Media Research/Definitions
REPORT FOCUS: MATERNITYWEAR RETAILING
 CONSUMERS: WHO, WHERE AND WHY
Figure 52: UK retail sales of all womenswear and maternitywear, 2001-07
Figure 53: Who buys maternitywear, by age and socio-economic group, January 2007
 WHO SHOPS WHERE?
Figure 54: Where shoppers bought maternitywear recently, by age and socio-economic group, January 2007
 PROFILES OF MATERNITYWEAR RETAILERS
Mothercare
Figure 55: Mothercare Plc, outlet numbers, 2002-07
Figure 56: Mothercare, financial performance, 2002-06
Mamas & Papas
Blooming Marvellous
Figure 57: The Marvellous Group, financial performance, 2001-05
Formes
Figure 58: Formes (UK) Ltd, financial performance, 2002-06
JoJo Maman Bébé
Figure 59: JoJo Maman Bébé, financial performance, 2002-06
Blossom Mother and Child
Crave Maternity
Definitely Baby
Does My Tum Look Big in This/Bridesnbumps.com
Home Mummy
Isabella Oliver
Nearly9
Pumpkin Patch
Push Maternity
Séraphine
Carla C Designer Maternity
Pea in the Pod
Polarn O. Pyret
 WHAT DOES THE FUTURE HOLD FOR MATERNITYWEAR RETAILING?
Forecast
Figure 60: Market size and forecast of maternitywear, at current and 2007 prices, 2002-12