Wednesday, December 24, 2008

UK - Recession claims more retail victims

Sales have already started at many UK stores

The recession has claimed its third victim in less than 48 hours after record store Zavvo called in administrators [BBC / Sky News]. Only yesterday the Officer's Club, a men's clothing store, started to close 32 of its 150 shops immediately after they filed for administration. The remaining stores were set to be sold off. But a last minute buyer may save more than 900 jobs [BBC]. Only hours after the Officer’s Club made the announcement, Whittard of Chelsea chain also filed for administration but was rescued after a private equity firm bought it [BBC / Sky News].

Britain’s retailers have already experienced one of the worst Christmases on record despite launching cut price sales. Many stores slashed prices by more than 50% to attract shoppers. And to some extent it has worked. London's west end streets reported their best day of the year on Tuesday, with more than £60 million of business being done by 500,000 shoppers on Oxford Street, Bond Street and Regent Street. But it is unlikely to make the retailers much profit. The shopper is becoming exceeding savvy and watching how they spend. Some shops have also angered customers after slashing prices by half without warning soon after customers have purchased them full price. There are stories that on some occasions, some shoppers have re-purchased the same item and later returned the previously bought item for a refund.

In order to recoup costs the sales have already started at many retailers. Some stores are even set to open on Christmas Day. For those with money and secure employment there are many bargains waiting to be snapped up. But the future look extremely bleak for thousands of shop workers set to be laid of shortly before the new year. MFI the furniture retailer has already shut its doors and Woolworth is beginning to wind up its business with stores even selling of the fittings [BBC].

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