Debenhams Boss Say High Street Was 'sea Of Red' In Run-Up To Christmas

[winkie]

Generally the big department stores do not make for a relaxing shopping experience imo....the smell as you enter them, bit like stale perfume...the stuffy atmosphere, with many shops within a shop no consistency....in fact sale time is best to avoid, not that much different to a jumble sale without jumble sale prices.

....also noticed in many more stores nowadays most of the clothes are made out of man-made fabrics, polyester and acrylic, clothing you know will only last a few washes before looking like a rag, or very thin lightweight cotton that will last the year out if lucky.

[Mr. Miyagi]

Newport City Council (South Wales) has just agreed to borrow £90 million, against quite heavy local opposition and then lend that out to a private developer to build a new shopping centre on the basis that Debenhams will be the flagship store.

[Sour Mash]

Although it still didn't tempt me to buy, I was genuinely shocked at the level of discounting I saw before Christmas throughout the high street.

Perhaps deflation is setting in on non-essentials as cash is consumed by inflating essentials such as energy, over which the public responds more slowly with respect to cutting costs.

Bi-flation, long ago predicted here.

The price of essential stuff goes up but the costs of items that are commonly discretionary purchases go down (as people have less disposable income due to the cost of living going up and are not willing to spend as much on stuff they don't strictly need).

That said, the price of stuff like Sky telly is still holding up but perhaps that's because chavs now consider Sky a basic essential.

[DTMark]

Newport City Council (South Wales) has just agreed to borrow £90 million, against quite heavy local opposition and then lend that out to a private developer to build a new shopping centre on the basis that Debenhams will be the flagship store.

<coughs> Blackpool...

Debenhams never came, though.

[interestrateripoff]

That said, the price of stuff like Sky telly is still holding up but perhaps that's because chavs now consider Sky a basic essential.

If you can't afford to go out Sky could be seen as "good value", an evening at the pictures seems to be around £9 a ticket. So for a low income family of 4 a trip to cinema is going to be around £25/£30. Sky movies appears a decent entertainment package considering...

[Dorkins]

If you can't afford to go out Sky could be seen as "good value", an evening at the pictures seems to be around £9 a ticket. So for a low income family of 4 a trip to cinema is going to be around £25/£30. Sky movies appears a decent entertainment package considering...

Exactly. Anybody whingeing about poor people with games consoles, mobile phones, large TVs and Sky is mentally stuck in the 1950s-1980s when you would pay a month's average salary (or more) for a TV or a VCR.

Electronic entertainment is now an incredibly cheap and effective form of escapism, and the people who want to escape real life the most are the poor.

[dkujsbap]

On the subject of Sky, it's actually pretty good value. You can question whether I need to watch games 5 nights a week or drink while doing so, but if you consider a night at the pub watching will cost around £10, that can quickly spiral to £200 a month or more. Or £80 for Sky Sports. £80 will barely get a family of four to a Championship match, excluding food and travel.

Playing for my team and various kick-abouts on pitches and astroturf and FA subs etc costs around £5 a go, which four times a week is £20, or £90 a month. Didn't really dawn on me until I had a go at the girlfriend for signing up to a £70/mo gym.

Obviously I can afford it though otherwise I wouldn't do it.

[SarahBell]

I did actually go in in the run up to Christmas. Took a gift to the counter and asked how much it was - it hadn't been reduced in the half price sale so I left it there.

We go in to Debenhams when we're in Oldham - usually to take the short cut through to the pay machine on the stairs for the carpark.

[Eddie_George]

I forget what the term for it is, but M&S admit to doing it:

What they do is increase the price of items but do so with added functionality. Take men's socks for example. In M&S you can now only buy ones with added silver that supposedly reduces feet odour. Of course this silver is present in minute quantities so costs very little to add.

Back in the day M&S tried to have a lower end but I guess Primark have crowded them out of that market.

[Sour Mash]

Exactly. Anybody whingeing about poor people with games consoles, mobile phones, large TVs and Sky is mentally stuck in the 1950s-1980s when you would pay a month's average salary (or more) for a TV or a VCR.

Electronic entertainment is now an incredibly cheap and effective form of escapism, and the people who want to escape real life the most are the poor.

I could see that if used as an alternative to actually going to the cinema every evening or attending all the screened matches, you could consider watching the events on TV instead as being better value. However, few people - let alone those who have low incomes - are to to be going to be heading to the cinema every night or a premiership football match every weekend anyway.

In general terms, paying over £800 a year (£67.25 x 12 = £807) for a full Sky TV package is just ludicrous. It's clearly in the category of a luxury, discretionary purchase given that there's a wide range of digital channels available for 'free' (obviously there's a TV license cost associated with any TV usage) which provide a reasonable choice and service.

A phone of some sort is clearly a necessity in this day and age and you can get a basic mobile + PAYG/SIM only contract very cheaply indeed (I bought a really decent SIM-free smartphone for £200 and pay £7 a month for a basic 3G contract) and if you don't want a full-on smartphone you get pick up a reasonable feature phone (which will still give you email/pictures/music) for not a lot of dosh. Doesn't seem to be enough for many though who deem a top-of-the-line smartphone and mega-expensive contract a 'must' despite pleading poverty.

I'd also consider internet access a must - pretty much any broadband would do and it doesn't have to cost so much these days. Even some cheapish 3G deals which would provide enough for basic use for not a lot of money.

[Steppenpig]

There is something a bit odd about financing and and accounting in the retail sector. Firms seem to be continually on the verge of bankruptcy, then get taken over by some usual suspect hedge fund or "star retailer" and for the next few years make massive profits and become media darlings, and I for one never can tell what has happened to their stock to make it suddenly so popular, it usually looks like exactly the same tat, and then a decade later it all goes horribly wrong again.

I guess it involves exaggerating the provisions for restructuring and then relesing them back into the profit and loss over time, plus the accounts never seem to keep up with rapid expansion until the chickens come home in the shape of fixed asset depretation years later.

I don't know why the retail sector seems to be particularly prone though. Debenhams, BHS, M&S, Sainsbury, Tesco , Morrisons all seem to go through the same cycles.

[Steppenpig]

There is something a bit odd about financing and and accounting in the retail sector. Firms seem to be continually on the verge of bankruptcy, then get taken over by some usual suspect hedge fund or "star retailer" and for the next few years make massive profits and become media darlings, and I for one never can tell what has happened to their stock to make it suddenly so popular, it usually looks like exactly the same tat, and then a decade later it all goes horribly wrong again.

I guess it involves exaggerating the provisions for restructuring and then relesing them back into the profit and loss over time, plus the accounts never seem to keep up with rapid expansion until the chickens come home in the shape of fixed asset depretation years later.

I don't know why the retail sector seems to be particularly prone though. Debenhams, BHS, M&S, Sainsbury, Tesco , Morrisons all seem to go through the same cycles.

[zugzwang]

On the subject of Sky, it's actually pretty good value. You can question whether I need to watch games 5 nights a week or drink while doing so, but if you consider a night at the pub watching will cost around £10, that can quickly spiral to £200 a month or more. Or £80 for Sky Sports. £80 will barely get a family of four to a Championship match, excluding food and travel.

Playing for my team and various kick-abouts on pitches and astroturf and FA subs etc costs around £5 a go, which four times a week is £20, or £90 a month. Didn't really dawn on me until I had a go at the girlfriend for signing up to a £70/mo gym.

Obviously I can afford it though otherwise I wouldn't do it.

Good value? Or is it that the things we once considered affordable - football, travel, pictures - are now priced beyond our means?

[Sour Mash]

There is something a bit odd about financing and and accounting in the retail sector. Firms seem to be continually on the verge of bankruptcy, then get taken over by some usual suspect hedge fund or "star retailer" and for the next few years make massive profits and become media darlings, and I for one never can tell what has happened to their stock to make it suddenly so popular, it usually looks like exactly the same tat, and then a decade later it all goes horribly wrong again.

I guess it involves exaggerating the provisions for restructuring and then relesing them back into the profit and loss over time, plus the accounts never seem to keep up with rapid expansion until the chickens come home in the shape of fixed asset depretation years later.

I don't know why the retail sector seems to be particularly prone though. Debenhams, BHS, M&S, Sainsbury, Tesco , Morrisons all seem to go through the same cycles.

What generally happens is a 'pre-pack' administration deal.

The firm essentially goes bankrupt, defaults on all its debt and is sold extremely cheaply in a pre-arranged deal to new owners (often the old management) and continues trading under exactly the same customer facing brand/logo - plus maybe takes the opportunity to shed itself of the more unprofitable retail locations in the process.

Without a bottom line of servicing large debts and shorn of the less profitable shops it can usually manage to post a much better bottom line with little change of course needed. But of course it is still the same-old same-old management culture and given long enough will typically work its way back into the same mess again.

[Saving For a Space Ship]

It's as if the vultures dare not let the dead firms disapear, in case no others arise to take their place. Best milk the corpse by burning the creditors & over charging the customers for as long as possible. Just keep deducting one or 2 letters from the firms name every time.

ie. Clinton Cards is reborn as Clintons.

Similarities to keeping pensioners in pain alive as long as possible, so corporations can milk them for profit are purely coincidental

Edited January 2, 2014 by Saving For a Space Ship

[@contradevian]

Fcking Brown and his stupid client state.

No blame 'fcking' employers they wanted flexible compliant slaves and lobbied for this.

Edited January 2, 2014 by aSecureTenant

[Dorkins]

In general terms, paying over £800 a year (£67.25 x 12 = £807) for a full Sky TV package is just ludicrous.

Family of five, two unemployed parents and three children. £800 a year is £2.19 per day, or 44p per person per day in that household. That TV package could be providing anywhere from 20 to 40 man-hours of escape from reality each day for a couple of quid. That is incredibly cheap entertainment.

[Ash4781]

Er this [Op quote]seems like rubbish to me to deflect from poor strategy and piss-poor investor relations.

I understand Next report tomorrow.

Edited January 2, 2014 by Ash4781

[Sancho Panza]

Er this [Op quote]seems like rubbish to me to deflect from poor strategy and piss-poor investor relations.

I understand Next report tomorrow.

http://uk.finance.yahoo.com/news/next-ups-profit-forecast-strong-071808718.html

'LONDON (Reuters) - Next, Britain's second largest clothing retailer, raised its annual profit forecast after fourth quarter sales came in significantly ahead of its expectations, helped by a policy of not discounting before Christmas.'

As per HAM's earlier offering,it does seem as if it's company specific.

[SNACR]

What generally happens is a 'pre-pack' administration deal.

The firm essentially goes bankrupt, defaults on all its debt and is sold extremely cheaply in a pre-arranged deal to new owners (often the old management) and continues trading under exactly the same customer facing brand/logo - plus maybe takes the opportunity to shed itself of the more unprofitable retail locations in the process.

Without a bottom line of servicing large debts and shorn of the less profitable shops it can usually manage to post a much better bottom line with little change of course needed. But of course it is still the same-old same-old management culture and given long enough will typically work its way back into the same mess again.

I don't really favour zombie businesses and bailouts. However, the HPC received wisdom of letting things fail to regrow is only really OK, to a point. The idea is all these big zombie retail companies go to the wall and the High St will vigorously grow back with local small businessmen running butchers, bakers and candlestick makers.

However, I strongly suspect in reality, the best case scenario would be a strong smattering of payday loan outfits, Cash Converters, Nail Bar/Tanning Salon drugs money laundering fronts, Bookies and, if you're really lucky a Poundland. Worst case scenario would be many town centres starting to catch up with Detroit.

[crashmonitor]

Must be the contrarian in me, because I did my clothes shopping at Debenhams after Christmas....they were the only store that had genuinely discounted (as borne out by retail analysts saying they had overdone it) and the only place I could get a suit that fitted other than the more bespoke shops.

[Sancho Panza]

However, I strongly suspect in reality, the best case scenario would be a strong smattering of payday loan outfits, Cash Converters, Nail Bar/Tanning Salon drugs money laundering fronts, Bookies and, if you're really lucky a Poundland. Worst case scenario would be many town centres starting to catch up with Detroit.

For the High St to be revitalized,rents and rates need to find a new,much lower, level.That level may well leave many pension fund holes substantially bigger than they are already and it would also create a further downdraft on central govt spending.

A lot of empty shops in the North/Midlands would become viable at £3000 p.a rent and £1500 rates as opposed £15,000 and £7,500.It might even create some sustainable jobs and lift the velocity of argent.

[SNACR]

For the High St to be revitalized,rents and rates need to find a new,much lower, level.That level may well leave many pension fund holes substantially bigger than they are already and it would also create a further downdraft on central govt spending.

A lot of empty shops in the North/Midlands would become viable at £3000 p.a rent and £1500 rates as opposed £15,000 and £7,500.It might even create some sustainable jobs and lift the velocity of argent.

It's paying the staff £6+ an hour to stand in them that makes them unviable. Even if you have an owner-manager scenario where are they going to buy stock or supplies at a competitive level?

It's an obsolete distribution method but it rattles the sheeple that they might be disappearing even though they do their own shopping exclusively at Tesco and online. File the UK High St with Libraries and publicly owned Forests.

I've got an inbox stuffed full of any number of shops available rent free and they're not really of any interest. On the topic of Debenhams department stores have always trodden a fine line between profitability and loss. It's been the case for years that the anchor department store in many middling town and city centre shopping complexes have been there rent-free to draw punters and make the scheme cohesive.

Edited January 4, 2014 by SNACR

[Sancho Panza]

It's paying the staff £6+ an hour to stand in them that makes them unviable. Even if you have an owner-manager scenario where are they going to buy stock or supplies at a competitive level?

It's an obsolete distribution method but it rattles the sheeple that they might be disappearing even though they do their own shopping exclusively at Tesco and online. File the UK High St with Libraries and publicly owned Forests.

I've got an inbox stuffed full of any number of shops available rent free and they're not really of any interest. On the topic of Debenhams department stores have always trodden a fine line between profitability and loss. It's been the case for years that the anchor department store in many middling town and city centre shopping complexes have been there rent-free to draw punters and make the scheme cohesive.

You're the SME here SNACR,not me.I concede your points.

My previous post,even though I hadn't necessarily realised it,bases any future for the High St on one man bands who are willing to take a hit on salary for the chance to control,to a degree, their destiny.Thus someone could upgrade a fruit and veg market business to a viable grocer's shop if the rent's cheap enough.Similarly,online businesses would at the right price,take a High St spot for a little extra footfall revenue and some room to store CD's/books.Same with jewellers,hair salons etc.

So a local area,with free parking,might survive at the right price.Big city High St shops,I'm not so sure when,as you say,you're forking out wages.

Quick question if you can,are the small one man bands able to negotiate free rent deals these days or is it still just the larger drawers of footfall in town centres?

[winkie]

Over recent years have been seeing a growing in mobile businesses, such as butchers and fresh fish vans....even fish and chip vans.......they either travel and sell from a weekly market, visiting different market towns during the week or visiting towns and villages to sell their high quality local produce to their very satisfied customers.....low overheads can then be passed to the customer, and no going far in the cold, petrol or parking to pay.win,win