Despite ongoing logistics challenges, rising costs and the relentless Covid variants, retailers continue to report strong sales and rising profits.
FINANCE
Primark’s (UK) Q3 sales were only down 3% from 2019 levels, despite this summer’s ‘pingdemic’ in the UK and impact of the Covid-19 pandemic in European markets that kept shoppers at home.
- “Comfort living” continues to be a trend with sales of leisurewear such as leggings and cycling shorts doing well, along with Primark’s new autumn collection.
- Full-year operating profits (for the year ending Sept 18) are expected to be ahead of last year’s £1 billion.
Key strategy: Rock bottom prices tempt customers to buy multiple items. Few shoppers leave with only one item in their bags.
JD Sports (UK) has reported a record first-half pretax profits of £364.6 million for the six months ended July 31 from £41.5 million a year ago.
- Sales jumped 52% year-on-year to £3.9 billion for the 26 weeks to July 31.
- Pretax profit for the full year ending Jan 29, 2022 is forecast to reach £750 million, more than double the £339.9 million achieved in fiscal 2019.
H&M (Sweden) saw Q3 net sales rise 14% year-on-year. Sales varied by market as Covid-related restrictions still forced about 180 stores to remain closed.
John Lewis Partnership (UK) slashed losses to £29 million in the first half of its financial year after it cut costs and benefited from business rates relief, but warned it faced ‘significant uncertainty’ about trading over Christmas.
- Sales rose 6% to almost £5.9 billion in the six months to July 31 and losses shrank dramatically from £635 million marked up a year ago.
Inditex (Spain) reported sales hit £6 billion in the three months to July, up 7% over the same period in 2019.
- Profits reached £726 million as online sales remained strong and shops stayed open in key markets.
Superdry (UK) reported this week that annual pre-tax loss in the 12 months to April 24 narrowed to £37 million, an improvement on the £166.9 million loss the previous year.
- Group revenue fell 21.1% to £556.1 million due to covid-related store closures.
PODCAST
Cotton Price Outlook: Making Sense Out of the Market
While many analysts expect to see price increases as part of the fallout from the pandemic, others believe that higher costs are likely to linger – becoming another part of the new normal.
Dr. Terry Townsend has spent over 30 years analysing the cotton industry shares his outlook for cotton prices, as well as what we should be watching.
XMAS OUTLOOK
US retail sales are forecast to grow 7.4% this holiday season (Nov. 1- Dec. 24), according to Mastercard SpendingPulse, which measures overall retail sales across all payment types.
- In-store sales are expected to see a rebound—rising 6.6% compared to 2020.
- Online spending is expected to increase 7.6% year-on-year.
“This holiday season will be defined by early shopping, bigger price tags and digital experiences,” said Steve Sadove, senior advisor for Mastercard
SHOP OPENINGS
Giordano (Hong Kong) opened the first of its new concept stores at Zahia City Center in Sharjah.
- This year, 6 new stores have opened in the region and another 6 stores will open before the end of 2021.
- The new stores are in Saudi Arabia, Mauritius, Kenya, Ghana, and Bangladesh.
Superdry (UK) is set to open a new megastore near Selfridges on Oxford Street, described as a “vote of confidence” in London, by Julian Dunkerton, chief executive.
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