Retailigence

“Club of Knowledge Hunters”

John Lewis bucks retail trend with model campaign

Posted by retailigence on September 10, 2008

JOHN Lewis Partnership is hoping to lift the gloom surrounding the high street after signing up the supermodel Karen Elson for its biggest ever advertising campaign. Elson is married to rock star Jack White of the White Stripes, and analysts are hoping for a further lift in what are expected to be positive interim profits on Thursday, bucking the trend set by many of its rivals who also unveil figures this week.

Half-year profits last year rose 50% to £146m and John Lewis has continued to report weekly sales rises through the credit squeeze. Its last available figures, for the week ending August 30, showed a 1.6% rise in sales. There has been a strong performances in electricals and home technology. This has offset the fall in demand for home products, such as beds and rugs, on the back of the slowing housing market. But its Waitrose food chain saw a weekly slowing in growth of close to 2%, suggesting food price inflation is hitting its sales. As a barometer for the retail market, John Lewis’s results will be scrutinised as the sector’s reporting season gets into full swing.

On Wednesday, fashion chain Next will publish half-year figures, which analysts predict will reflect increasingly difficult conditions for the sector. Lehman Brothers has already downgraded its forecasts for full-year pre-tax profits to £433.9m, as against £498.1m last year, following a trading statement in July. At the time, Next provided guidance on the effect that increases in food, energy and mortgage costs would have on its customer base. Sales in the six months to July 26 were down 6%. It said it was “very cautious” about the outlook for the final six months.

One bright spot for Next is the performance of its Directory catalogue business, which experienced a 2% rise in sales in the first half of the year. French Connection fashion chain will reports its results to July 31 on Friday, with analysts expecting flat sales. While its ladieswear and Toast brands have remained strong during the credit crunch, its menswear range has been struggling. The group has already warned that both the UK and Europe have recorded weak margins compared with last year. French Connection’s sales for the year to January 2009 are forecast to come in at £237m.

Even, Primark, the budget clothing chain and high-street darling, appears not to be immune to the downturn in consumer spending, with growth expected to have slowed in the last 12 months. Its owner, AB Foods, is expected to release a full-year trading update tomorrow. Analysts suggest Primark’s performance will reflect the fact that better-off consumers are opting for higher-quality clothing, and the end of the era of ‘throwaway’ fashion.

source:-scotland on sunday

Contributed by:- Vipin Rawat

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