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Market Commentary

​​Weekly Retail & Leisure News - 16 March, 2015

February retail sales up, as BHS sold for £1

UK retail sales increased 0.2% in February on a LFL basis according to the latest figures from the BRC. On a total basis, sales were up 1.7%, against a 0.7% rise in February 2014. After many retailers reported positive Christmas trading and healthy growth was registered in January, February is traditionally a quiet month for retailers. It is therefore positive to see that retail sales continued to rise this month, despite continuing decline in LFL food sales.

However, in the longer term, trading performance announced this week by some of the UK’s largest retailers has been mixed. Sales at John Lewis’s department store business grew 2.2% on a LFL basis in the 52 weeks to January 31. In the same period, LFL sales at Waitrose grew 1.4% and online sales were up 21.6% to £1.4bn. However, in the 8 weeks to February 28, Home Retail Group announced LFL sales at Argos fell 5% and were also down 0.9% at Homebase. Morrisons also announced this week that LFL sales had fallen by 2.6% in their fourth quarter.

It has also been announced this week that Sir Philip Green has sold the department store chain BHS to an investment vehicle called Retail Acquisitions Ltd. Founded in 1928 in Brixton, BHS has 180 stores and employs almost 12,000 staff; however the asking price for the retailer has been quoted as low as £1. BHS was part of the Arcadia Group, controlled by Sir Philip, which still includes TopShop, Burton and Evans. The company was sold debt free, but has announced losses in recent years, including a £69.6m loss in 2013 on £675.7m of sales.

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