The Christmas trading period is over for another year, and retailers will now be turning their attention to totting up their totals in order to judge how well they performed during this peak season. However, before any results have even been released, economists from credit rating agency Moody’s have already made their predictions as to which retailers will be the winners for Christmas 2014.
According to senior analyst David Beadle, House of Fraser, New Look and Debenhams stand to become three of the biggest winners in Europe this Christmas thanks to their decision to place a high emphasis on selling items with a seasonal appeal. Furthermore, all three brands have worked hard this year to improve their online presence and web selling options – something which is predicted to be a game changer for retailers this festive season.
The inclusion of Debenhams on the list may raise a few eyebrows in the City, as it was only last year the department store chain was forced to issue a profits warning on New Year’s Eve following a dismal Christmas sales period. However, its fortunes have changed drastically over the past 12 months, with a turnaround programme focusing on online and store improvements enticing consumers to begin shopping at Debenhams once more.
Mr Beadle points out that the changing face of the retail industry has meant “top quality online offerings will bring an extra Christmas boost.”
He continues; “We expect year on year Christmas profit growth for apparel retailers with a relatively high reliance on Christmas sales, including New Look, House of Fraser and Debenhams.
“Revenues are typically strong in this period for clothing retailers, particularly those with products with seasonal appeal.
“House of Fraser and New Look have strong online offerings, with online sales growth of more than 30 per cent in recent years: by contrast, Debenhams has needed to invest in improving the offering in time for this Christmas.”
The news that clothing retailers are likely to do well this Christmas will be a great relief for many, given how many high street chains suffered a drop in sales from August to October due to unseasonably warm weather. However, Mr Beadle believes the impact of the warm autumn will not greatly impact upon retailers who “bought stock cautiously”.
In addition, because of the heavy discounting seen in the pre-Christmas period some retailers may be concerned about their bottom lines going into the New Year, but Mr Beadle does not think that this will be an overwhelming worry for the majority.
A sales boom in November and high demand during the Christmas trading period has meant that not many clothing retailers have been left with a huge excess of stock, meaning that there will be plenty of space on the shelves for new lines after the January sales have concluded.
2014 has by and large been a very positive year for the high street, and Moody’s forecast will ensure most clothing retailers will go into the New Year in high spirits.
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