2012: a difficult year in store…?

After the optimism of strong footfall figures on Boxing Day, high street retailers were reminded of the current challenging trading conditions following a fall in the number of shoppers during the January sales period as reported in the Telegraph on Monday.

During December 2011, clothing retailer D2 Jeans and Barratts Priceless entered into administration and it is expected that they will be closely followed by lingerie chain, La Senza later this week. With 146 stores and 18 concessions across the UK, La Senza’s plight is another blow to the high street.

Experts predict that there will be minimal or no sales growth in 2012 and, with increased competition from online fashion retailers and clothing lines from the ever-expanding supermarkets, it looks to be another difficult year on the cards for high street retailers. As a consequence, many retailers are continuing to reduce costs by rationalising their property portfolios and renegotiating more competitive terms with their landlords.

In view of the current market and in the absence of any other positive news for retailers on the horizon, many commentators are looking towards the Diamond Jubilee and, particularly, the Olympic and Paralympic Games as catalysts to give a boost to the nation’s retailers during the summer of 2012. While Fashionista does not feel that this will be solution to the difficulties currently being experienced, the influx of foreign visitors may give some fashion retailers (and particularly those based in London) an increase in revenue during the third quarter as well as an opportunity to raise the profile of their brand to an international audience – but retailers should be wary of breaching LOCOG’s rights summarised here.