Ex-M&S, Arcadia boss warns of more fashion chain closures
The former CEO of M&S and Arcadia has issued a stark prediction for the health of the UK retail sector with Lord Rose saying in an ITV News interview that Christmas trading is tough and he expects more retail failures next year.
And he blamed the usual suspects saying that internet shopping’s huge popularity, as well as the wrong kind of weather for the autumn/winter season and the on-going debacle around Brexit are all having an impact.
“I think this is a tough Christmas,” Rose told ITV. “I’m going to put my money where my mouth is. I suspect there will be some uncomfortable trading statements in the early part of January”.
And he thinks the biggest problem for the fashion sector will be seen by the mid-market retailers as the high end is “doing OK” and budget brands are also largely prospering, despite the difficult times.
In the fashion sector (and in the electronics sector too), he thinks there is “too much capacity; too many shops chasing too few pounds. Why would it get any better [in 2019]? I can see no reason why it will get any easier. Somebody will ‘have an accident next year’. Definitely.”
And given his bleak view of the middle market, it’s no surprise that he thinks the department store concept as typified by chains such as Debenhams and House of Fraser may be in terminal decline. He said the problems at those two companies have highlighted how vulnerable this business model is in an era when web sales are surging, especially as some department stores have been slower to fully embrace online than some other specialist rivals.
“We know how expensive it is to manage big space. It tends to be the case that the big space retailers have been the last ones to espouse properly the online situation, believing they could attract people into their shops. But it’s getting tougher and tougher every single day,” he added.
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