http://business.timesonline.co.uk/to...cle6538555.ece
Embattled electricals retailers received a boost yesterday when John Lewis, Britain’s biggest department store group, reported a “stunning” rise in sales of white goods.
Electricals and home-technology sales surged by 8.2 per cent year-on-year at John Lewis, which analysts said augured well for Kesa, the owner of Comet, and DSG International, which owns Currys and PC World. Both groups have been struggling amid the decline in discretionary spending and will update the market on recent trading next week alongside their annual results.
Nevertheless, any recent rise in electricals sales will come too late to save DSG and Kesa from painful profit cuts. Analysts expect DSG, Britain’s biggest electricals retailer, to report a profit of £43 million on Thursday, down nearly 80 per cent. Kesa, the No 3 in Europe and the owner of Darty in France, is expected to report £69 million, 46 per cent below last year.
Both updates will provide stern tests for the companies’ new bosses. John Browett, chief executive of DSG, took the helm last year and recently raised £310 million to provide more financial flexibility, as he pushes through a store reformatting that he hopes will revive the retailer’s fortunes. Thierry Falque-Pierrotin, who succeeded Jean-Noël Labroue as chief executive of Kesa in January, is expected to outline his strategy for the group.
Matthew McEachran, retail analyst at Singer Capital Markets, said that Mr Falque-Pierrotin’s announcement that Kesa was selling its small, loss-making Swiss business was a statement of intent: “He’s not going to hang around. There’s a clean broom. And the improvement in electricals sales is good news for Comet.”
Analysts expect Mr Falque-Pierrotin to address Kesa’s poorly performing stores outside Britain and France. DSG sold its Central European unit last month for a nominal sum after a review of its international divisions.
It is also thought that price competition has eased in the electricals sub-sector, which may mean that profitability will improve along with sales volumes. John Lewis follows Home Retail Group, the owner of Argos, in reporting an upturn. This month Argos said that consumer electricals and televisions were selling well.
The positive update from John Lewis, a high street bellwether, will bring some cheer to retailers after bleak figures from the Office for National Statistics revealed a 1.6 per cent year-on-year fall in sales in May.
John Lewis said that sales for the week to June 13 had risen 2.8 per cent ahead of the same period in 2008. However, the company reported an increase of only 0.3 per cent in fashion sales, while the home department was down 4.6 per cent.
David Barford, regional selling operations director at John Lewis, described the performance in electricals as “stunning”, adding that fashion had shown resilience against a tough comparison with the same week last year, which included Father’s Day.
Sales at the John Lewis-owned Waitrose rose 6.1 per cent, boosted by a 20 per cent surge in the supermarket’s entertainment range, after a series of newspaper promotions.
Overall, sales for the John Lewis Partnership, which include the department store and the supermarket chain, rose by 4 per cent.
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Looks like the "live for today" british consumer will come to the rescue of the economy.
Why cany we be more like Germany/Japan and save more?
Embattled electricals retailers received a boost yesterday when John Lewis, Britain’s biggest department store group, reported a “stunning” rise in sales of white goods.
Electricals and home-technology sales surged by 8.2 per cent year-on-year at John Lewis, which analysts said augured well for Kesa, the owner of Comet, and DSG International, which owns Currys and PC World. Both groups have been struggling amid the decline in discretionary spending and will update the market on recent trading next week alongside their annual results.
Nevertheless, any recent rise in electricals sales will come too late to save DSG and Kesa from painful profit cuts. Analysts expect DSG, Britain’s biggest electricals retailer, to report a profit of £43 million on Thursday, down nearly 80 per cent. Kesa, the No 3 in Europe and the owner of Darty in France, is expected to report £69 million, 46 per cent below last year.
Both updates will provide stern tests for the companies’ new bosses. John Browett, chief executive of DSG, took the helm last year and recently raised £310 million to provide more financial flexibility, as he pushes through a store reformatting that he hopes will revive the retailer’s fortunes. Thierry Falque-Pierrotin, who succeeded Jean-Noël Labroue as chief executive of Kesa in January, is expected to outline his strategy for the group.
Matthew McEachran, retail analyst at Singer Capital Markets, said that Mr Falque-Pierrotin’s announcement that Kesa was selling its small, loss-making Swiss business was a statement of intent: “He’s not going to hang around. There’s a clean broom. And the improvement in electricals sales is good news for Comet.”
Analysts expect Mr Falque-Pierrotin to address Kesa’s poorly performing stores outside Britain and France. DSG sold its Central European unit last month for a nominal sum after a review of its international divisions.
It is also thought that price competition has eased in the electricals sub-sector, which may mean that profitability will improve along with sales volumes. John Lewis follows Home Retail Group, the owner of Argos, in reporting an upturn. This month Argos said that consumer electricals and televisions were selling well.
The positive update from John Lewis, a high street bellwether, will bring some cheer to retailers after bleak figures from the Office for National Statistics revealed a 1.6 per cent year-on-year fall in sales in May.
John Lewis said that sales for the week to June 13 had risen 2.8 per cent ahead of the same period in 2008. However, the company reported an increase of only 0.3 per cent in fashion sales, while the home department was down 4.6 per cent.
David Barford, regional selling operations director at John Lewis, described the performance in electricals as “stunning”, adding that fashion had shown resilience against a tough comparison with the same week last year, which included Father’s Day.
Sales at the John Lewis-owned Waitrose rose 6.1 per cent, boosted by a 20 per cent surge in the supermarket’s entertainment range, after a series of newspaper promotions.
Overall, sales for the John Lewis Partnership, which include the department store and the supermarket chain, rose by 4 per cent.
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Looks like the "live for today" british consumer will come to the rescue of the economy.
Why cany we be more like Germany/Japan and save more?
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