Coronavirus UK: empty stores, Reiss sale delayed, Next might scale back targets
Fashion retailers endured a quiet Saturday and Sunday while panic-buying saw supermarkets bustling at the weekend. The UK hasn’t gone as far as ordering stores to close in the same way as France, Italy and Spain have, but with the feeling that the UK isn’t far behind those three countries in the severity of its coronavirus outbreak, that’s still a possibility.
As mentioned, UK supermarkets saw panic-buying on both Saturday and Sunday, but consumers’ supermarket trolleys weren’t full of products from supermarket fashion labels like George, Tu, or F+F.
Consumers had other things on their minds and while they didn’t seem too worried about the crowds in supermarkets, they did seem to be staying away from shopping centres. Bluewater in Kent seemed quieter than usual on Saturday, as did the two London Westfield malls and the Bullring in Birmingham was also reportedly less busy, with local reports from other cities’ shopping destinations suggesting a similar situation.
London’s Oxford Street remained busier than many shopping streets, but was still less so than usual, and the absence of tourists was noticeable.
While store closures haven’t been a major issue so far, Urban Outfitters has taken the decision to shut all of its stores globally, including its UK locations. Allbirds, Nike, Supreme, and 3.1 Philip Lim have also closed UK stores.
And many more are likely to close in the weeks to come. Britain’s health secretary Matt Hancock has refused to rule out ordering all non-essential stores to shut. When asked directly by the BBC’s Andrew Marr whether that might happen, Hancock said: “We have not ruled that out. We will do what is necessary. Because the top priority is to protect life, and you do that by protecting the vulnerable, and by protecting the NHS. That is the goal.”
Meanwhile, it has been reported that the sale process for one of the UK’s most successful fashion names, Reiss, has been put on hold due to the coronavirus outbreak.
The Telegraph reported the news, although it said that neither Reiss itself nor Warburg Pincus and Rothschild, which are involved in the process, had confirmed it.
It comes as no surprise though with practical issues having arisen given that Warburg Pincus has closed its US and UK offices with staff now working from home. But beyond that, the appetite for premium-priced companies among private equity buyers could be dented in the coronavirus-hit global economic environment.
Indeed, the news about Reiss follows the postponement last week of the flotation for Poundland owner Pepco Europe.
There are also concerns that another successful UK fashion retailer, Next, could cut its outlook when it reports its latest results this week. Analysts are expecting profits of around £727 million for last year and it had an ambitious profit target of £734 million for this financial year. But analysts have suggested that this forecast could be cut by anywhere between 9% and 15%.
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