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Market Commentary

​Weekly Retail & Leisure News - 01 September, 2014

​UK retailer optimism surges, as HMV and Signet unveil positive results

​​Business prospects for UK retailers are the strongest in 12 years, as sales grew healthly in August and expectations for next month strengthen. According to the CBI, retailers' optimism about the business situation for the next quarter hit its highest level since May 2002. In addition, 51% of businesses responding reported higher sales volumes in August than a year ago. Forecasts for September were even more optimistic, with 42% of retailers on balance expecting sales to be up on the same month last year.

This optimism in the UK Retail market is shared by HMV, which is poised to reclaim the title of Britain’s biggest entertainment retailer less than 18 months after it was saved from oblivion by the turnaround specialists Hilco. The high street stalwart will likely surpass Amazon as the biggest retailer of CDs and DVD in the near future, according to its chairman Paul McGowan. Hilco bought HMV out of administration in April last year, saving 2,500 jobs and 125 of the chain’s 400 stores. The company has released a statement saying that LFLs were up 13.8% in the past two months, including a 21% increase in CD and vinyl sales and a 6% rise in sales of DVDs.

Another company to announce positive retail sales this week was Signet, which comprises H Samuel and Ernest Jones. The company posted total sales up 17% to 98.3m in in the 13 weeks to August 2, with UK LFLs up 4.4%. H Samuel, which has 304 UK stores, posted LFLs up 2.6% to £49.3m and Ernest Jones, which trades from 189 UK stores, posted a 6.4% LFL increase to £48.9m. Click & collect helped Signet’s online sales to soar by 61% to £5.7m, demonstrating the ongoing  importance of a true multi-channel strategy for retailers. (see our Redefining Retail Places Project for further details).

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