As posted by: Wall Street JournalFor Britain's retailers, it looks like Christmas is a bust.
There were 8.7% fewer shoppers on the final weekend before Christmas than last year, according to Experian, a credit-tracking company. While the figure doesn't include people who shopped online, it suggests the last-minute shopping surge retailers wished for didn't happen.
Shoppers crowd a Woolworths in Scotland earlier this month, but it isn't enough: Jan. 5 will see the closing of the chain's last outlet.
Analysts are concerned retailers are backed up with unsold goods, which has prompted them to slash prices. That will likely lead to disappointing financial results in January and February, a fear that sent retailers' share prices falling Monday. Most U.K. retailers are offering discounts of 20% to 50%.
Shares in Marks & Spencer, one of Britain's most prominent department-store chains, fell 2.2% Monday to 220.75 pence ($3.29) Debenhams, which sells clothes and electrical appliances, fell 7.6% to 24.50 pence. Home Retail Group, which owns Argos stores, fell 13% to 204 pence. Home Retail was the biggest decliner in the benchmark FTSE 100 index, which fell 0.9% Monday.
Two big U.K. retailers already have declared bankruptcy this year. MFI, a furniture chain, stopped trading Friday. The last of Woolworths's 807 stores will close for good Jan. 5, accountants Deloitte said Monday.
An additional 10 to 15 retail chains likely will collapse in the U.K. in January, said Nick Hood, a partner at restructuring firm Begbies Traynor. The most at-risk businesses include those that sell nonessential items such as televisions and office equipment, Mr. Hood said.
One company looking vulnerable is DSG International, one of Britain's largest sellers of electrical goods and computers. Struggling with competition from the Internet, DSG recently stopped paying dividends to preserve cash. Its shares have fallen 91% over the past year to 16.75 pence. Some analysts say DSG might have to sell part of its operations in Western Europe to raise cash. A spokeswoman for the company declined to comment.
But one department-store chain is using the economic gloom to make shoppers smile. "No more 'same dress' disasters," says a newspaper ad for Harvey Nichols, a chain of seven stores selling expensive clothing, cosmetics and home wares. "The recession has never looked so good."
