Christmas sales misery for UK retailers

Thursday, 06 January 2011 12:00

The first week of trading in January has seen a number of major UK retailers issue profit forecast warnings, announce the closure of stores and blame low seasonal sales on the winter weather.

HMV, which also owns Waterstone's bookshops, will close 60 stores in 2011 as a result of declining sales as it warned profits will be lower than anticipated after sales dropped by ten per cent over Christmas. The company's shares fell by twenty per cent after the announcement.

Forty HMV stores and twenty Waterstone's outlets will shut. This represents about ten per cent of the stores.

Clothing chain Next said it lost £22 million in sales because shoppers stayed away from the store in the run-up to Christmas. However, this was mitigated by an increase in online sales as shoppers did their buying from home.

The company said that they are still on target to reach their profit target for the year and its shares rose by four per cent after the trading update announcement.

Mothercare is another retailer that has issued a profit warning after severe sales disruption from the weather in the weeks before Christmas. Sales fell by 5.8 per cent in the last three months of 2010.

Clinton Cards said that sales were down by 2.1 per cent in the crucial final five weeks of the year. Full year profits are likely to be lower than anticipated.

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