LONDON — T.S. Eliot wrote that April was the cruelest month, but for his fellow Brits, it’s most certainly going to be January.
Next month will be the moment of truth for British high street retailers — when the winners and losers emerge, retail experts here said.
Nick Hood, a partner at the insolvency firm Begbies Traynor, made headlines here when he predicted 10 to 15 national and regional chains would go bust by mid-January.
In an interview, Hood stood by that forecast and said fashion chains “would not be exempt” from collapse. However, he declined to name names.
“Fashion retailers are inherently fragile businesses,” he said. “I wonder if the clothing ranges that retailers committed to six to nine months ago are right for a changed, more austere mood.”
With consumers cutting back in general, he said an oft-overlooked demographic — middle-class men and women who were living off savings, such as retired people — are putting the brakes on spending because they don’t want to appear extravagant or because they don’t have the cash.
“What we are living through is the financial equivalent of 9/11,” Hood said. “It is something that no one alive today has ever been through, and it will change consumers’ mood and behavior for years to come.”
According to preliminary figures from Experian FootFall, shopper numbers were down on average 8.7 percent for the weekend of Dec. 20 to 21 in the U.K., despite deep discounting across the board from luxury outlets to high street chains.
Hood said the most vulnerable retailers in the New Year will be those with high levels of borrowing — and chains that have expanded too quickly.
Already Britain has seen its share of retail casualties: Woolworths; The Officers Club, the discount men’s wear chain, and MFI, the mass market furniture company, all went bust in the last month. Whittard of Chelsea, the Baugur Group-owned retail chain selling tea, coffee and crockery, was on the brink of administration (the U.K. equivalent of bankruptcy), according to British press reports.
Earlier this year, brands including Biba, Hardy Amies, Ghost and Marchpole, the clothing manufacturer and owner of the Jean-Charles de Castelbajac label, all went into administration.
Ghost was rescued by the U.K. retail entrepreneur Touker Suleyman, and Hardy Amies was purchased by the private investment fund Fung Capital.
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