Colliers International Christmas 2017 Trading Results January 2018 CHRISTMAS TRADING REFLECTED CONTINUED RETAIL EVOLUTION
While the problems of Debenhams, House of Fraser and Mothercare grabbed most of the headlines at the beginning of this year, the 2017 Christmas trading figures did feature many encouraging performances.
• In the Fashion category, Joules (+19.2%) and Ted Baker (+9%) again performed well, The 2017 Christmas period brought continued difficulty for those retailers who still don’t have while Primark rose by 9% (all total sales), year-on-year. Fat Face held its nerve by not a firm grip on the complexities of relationships such as sale vs full price; ease of purchase vs participating in Black Friday price cutting but went on to do 8% like-for-like growth level of returns; value vs premium ranges; every day needs vs gifting. across the festive season. These challenges of strategy and offer will continue this year, but the Christmas trading • In the General Merchandise category, Mountain Warehouse had an exceptional year- figures have shown some real success stories. The retailers who are getting it right are those end (+33.1% LFL), with AO World (+11.4% total sales) and Footasylum (+33.5% total who have real ambition to grow and can take advantage of the opportunities being created by sales) also performing very well. the continued evolution of consumer behaviour change.
• Department Stores results were varied, but premium products, shopper experience Understanding the shopper will remain key. and investment in digital paid dividends for Selfridges (+10% total sales) and Fortnums (+13% LFL).
• Aldi (+15% total sales) and Lidl (+16%) won the supermarket sweep but this was mostly as a consequence of store expansion during the year. Among the ‘Big Four’ operators, if a leaked memo is to be believed, then Asda (+5.3% LFL) benefited most from our annual rush for turkey, mince pies and booze.
• Overall, online was again the eye-catching success story. Physical brands which have further invested in their digital platforms and improved distribution and delivery have seen demonstrable uplifts in online sales.
• There were exceptional online figures for Fat Face (+27%), Jigsaw (+34%), Quiz Mark Phillipson (+119%), Seasalt (+72%), Ted Baker (+35%), Dunelm (+30.5%) and Matalan (+24.7%). Head of UK Retail Group However, these impressive figures were put in the shade by some of the digital +44 20 7344 6866 ‘pureplays’: boohoo.com rose by 107% and Gear4music showed a 42% uplift. [email protected]
• Given the traumatic year it had had generally, perhaps the most surprising online success was BHS.com which may have shed its stores but saw online sales jump +43%. Sources: Global Data, Mintel, various media
CHRISTMAS TRADING RESULTS 2017 02 FASHION
Next, always the first to report Christmas trading, set a positive tone with a modest LFL increase of 1.5% (vs -0.4% in 2016). Online sales growth of 13.6% was indicative of broader Christmas trade, but Next also participated in Black Friday for the first time. Few fashion retailers are reporting LFL sales; strong growth in total sales figures often reflects a combination of strong online growth and physical store expansion. While discounting remains a key feature of the Christmas trading period, a number of fashion retailers opted out of Black Friday this year, maintaining full prices in the crucial December period. This seems to have paid off for Fat Face (+8% LFL), Joules (+7% total sales, +34% online) and Seasalt (+52% total sales, +72% online). An appetite for premium brands and gifting helped the likes of Ted Baker (+9% total sales). However, the outstanding performance came from the pureplay fashionistas boohoo.com (+107% total sales), with its Pretty Little Thing brand generating sales growth of 191%.
RETAILER REPORTING PERIOD END OF PERIOD LFL SALES CHRISTMAS 2017 LFL SALES CHRISTMAS 2016 THEMES IN TRADING STATEMENT
One of the biggest success stories, with Group Retail Sales +30.5% despite its online maturity and tough comparatives. ASOS 4 months 25-Jan-18 23.3%* 18.3%* International sales dominate (61.9%). UK revenue grew 107% to £135.7m. Brands include boohoo, Pretty Little Thing and Nasty Gal. Pretty Little Thing Boohoo.com 4 months 31-Dec-17 107%* 31%* generated y/y sales growth of 191% to £73.8m. Group Retail Revenue -2% against tough comparatives (+22%) in 2016/17 when sterling devaluation resulted in Burberry 3 months 31-Dec-17 2.0% 3.0% international tourists flocking ot buy luxury goods. Group online sales estimated to be up by 7% (Global Data). Impressive considering no Black Friday, stores closed at 1400 on Christmas Eve and 40 shops closed on Boxing Day. Fat Face 5 weeks 06-Jan-18 8.0% n/a First half (to Dec 2nd) EBITDA +8%, e-commerce +27% and international sales +61%.
JD Sports "Christmas" n/a 3.0% n/a LFL Christmas sales +3% with growth coming from online and overseas expansion.
Held nerve and did not particpate in Black Friday discounting. Online sales +34%. Good product, strategy and customer Jigsaw 5 weeks 31-Dec-17 7.0%* 10.0%* engagement. Sales boosted by physical expansion - 10 new stores, now totalling 117. Range expansion and diversification into gifting Joules 7 weeks 07-Jan-18 19.2%* 22.8%* categories helped at Christmas. Has limited promotions and discounting. Matalan's upturn across channels demonstrates the appeal of value retailers in the current economic climate. Online Matalan 5 weeks 30-Dec-17 7.3%* -2.9%* sales +24.7%
Moss Bros 23 weeks 06-Jan-18 -0.1% 6.1% Total sales +1.1%, but very poor December (LFL -8%) resulted in profit warning.
Growth primarily from online sales (+13.6%). Participated in Black Friday for the first time, which will have driven Next 54 days 24-Dec-17 1.5% -0.4% footfall and online traffic. Continued strength outside of fashion, particularly beauty. No online platform and continues to seek UK and overseas Primark 16 weeks 06-Jan-18 9.0%* 22.0%* expansion opportunities. Group online sales +119%. First results since IPO. Relatively small player, but results suggest potential against rivals Quiz 7 weeks 06-Jan-18 31.9%* n/a boohoo, ASOS and Primark. Concerns over 101 Debenhams concessions. Seasalt 5 weeks 06-Jan-18 52%* n/a Online sales +72% y/y; store sales +40% y/y. Maintaining full prices until Dec 22nd contributed to revenue uplift. Group revenue +12.6%. E-commerce revenues +30.5%. Growth in sales supported by 13 new stores in H2 and Supergroup 10 weeks 06-Jan-18 4.7% 13.7 e-commerce, now representing >25% of sales. Growth against strong comparatives , benefiting from the consumer appetitie for premium brands. E-commerce +35%, Ted Baker 8 weeks 06-Jan-18 9.0%* 17.9%* representing 30.1% of sales. Yours Clothing and menswear brand BadRhino now pose a threat to larger mid-market and UK plus size operators. Yours Clothing 7 weeks 07-Jan-18 16%* n/a Growing physical estate - now 131 units. Group e-commerce sales +42%.
*Total sales growth figures in the absence of LFL growth
CHRISTMAS TRADING RESULTS 2017 03 GENERAL MERCHANDISE
With the exception of Mothercare (-7.2% LFL) and Carpetright (-3.6%), those retailers reporting LFLs were all positive. Mountain Warehouse was the standout performer (+33.1% LFL), boosted by online (+76.6%), Black Friday (busiest day in its 20-year history) and 30 new openings. Commendable performances from Dunelm, Footasylum, The Fragrance Shop and The Works, the latter with a contribution from 65 new stores. Online provided strong support across most general merchandise categories, with pureplays BHS.com (+43% total sales) and Gear4Music (+42% total sales) showing compelling growth. At the value end, B&M produced a solid +3.9% LFL against tough comparatives, helped by a broader product range and strong grocery and FMCG sales. You get the feeling that there is more to come from online in this sector as digital investment and distribution issues are addressed.
RETAILER REPORTING PERIOD END OF PERIOD LFL SALES CHRISTMAS 2017 LFL SALES CHRISTMAS 2016 THEMES IN TRADING STATEMENT
Total group revenue +16.6%. Benefited from longer Black Friday trading period (2 weeks) and incremental sales from AO World 3 months 31-Dec-17 11.4%* 8.9%* new categories.
Group revenue +22.9% (B&M revenue +12.9%). 19 new stores over the period, total now 569. Benefiting from new B&M 13 weeks 23-Dec-17 3.9% 7.2% product ranges and strong grocery and FMCG performance.
BHS.com 3 months 31-Dec-17 43%* n/a Online only - success driven by lighting (+57%), home accessories (+43%) and women's sleepwear (+104%).
Total sales growth +5.9%, online sales +5.5%. Issued second profit warning in four months as costs increased and Card Factory 11 months 31-Dec-17 3.0% 0.5% margins came under pressure.
Bleak December has forced profits warning as UK big ticket spending drops. Rest of Europe (+5.1%) and online (+6.4%) Carpetright 11 weeks 13-Jan-18 -3.6% 1.9% performed better.
Group results positive (LFL +6%), boosted by strong Nordics (LFL +11%) and Greek (+23%) markets. UK & Ireland disappointing Dixons Carphone 10 weeks 06-Jan-18 3.0% 6.0% (LFL +3%) vs strong 2016. Online sales +5%. Weak Boxing Day sales following extended 2 week Black Friday promotion.
Dunelm 13 weeks 16-Jan-18 3.4% 0.2% Group sales up 13.6%; online sales up 30.5%. Commendable results, outperforming the homewares market in Q4 2017.
Group online sales +38.1%. Continuing to build physical (6 new stores) and online presence. Benefited from Footasylum 18 weeks 30-Dec-17 33.4%* n/a Christmas gifting.
Game Digital 23 weeks 06-Jan-18 0.6%* -18.3%* Group GTV +3.8%. Positive growth for first time since 2015, aided by new consoles from Nintendo and Xbox.
Builds on 44% increase in H1. Customer numbers increased by 450,000 - +38%. Improved distribution, particularly in Gear4Music 4 months 31-Dec-17 42%* n/a Europe.
Group revenue +3.2% and strong online growth at +13%. Retail cyling sales +7.8% LFL, driven by higher prices. LFLs Halfords 15 weeks 12-Jan-18 2.9% 7.0% increased across the board bar small car accessories sections.
Hotel Chocolat 13 weeks 31-Dec-17 15%* 16.2%* Christmas gifting is key to business. 10 new stores in six months to December also a major growth component.
*Total sales growth figures in the absence of LFL growth
CHRISTMAS TRADING RESULTS 2017 04 GENERAL MERCHANDISE
RETAILER REPORTING PERIOD END OF PERIOD LFL SALES CHRISTMAS 2017 LFL SALES CHRISTMAS 2016 THEMES IN TRADING STATEMENT
Failed to hit the mark with consumers in key trading period. Reduced store portfolio also impacted sales. Mothercare 12 weeks 30-Dec-17 -7.2% 1.0% Online sales disappointing (-6.9%).
Online sales +76.6%. Total sales +38.2%. Black Friday the busiest day in its 20 year history. Growth assisted Mountain Warehouse 6 weeks 31-Dec-17 33.1% 13.6% by 30 new openings.
Group Revenue +9.6% vs +4.4% in 2016/17. Investment in digital, through in-store iPads and improved mobile Pets at Home 12 weeks 05-Jan-18 0.1% n/a payment system, has given huge boost to UK omnichannel sales (+77%).
Very.co.uk sales up 16.8%; Littlewoods.com sales down -12.6%. 102m site visits to Shop Direct's brands, with Shop Direct 7 weeks 22-Dec-17 6.3%* 9.0%* Black Friday sales up 10.9%y/y.
Continued to grow share over festive period. Online sales +30%. 12 new stores in December contributed to Superdrug 4 weeks 30-Dec-17 2.4% 7.2% outperformance. New product ranges, collaborations and social media has protected it from pureplays.
Total sales increased by 14.6%, with online sales up 30%. Benefits from perfume being a classic Christmas The Fragrance Shop 6 weeks 16-Jan-18 5.6% 6.8% gift and celebrity scent best sellers. Sold 100,000 bottles on Dec 23rd - its busiest day ever.
Ryman +4.8%, Robert Dyas +2.0% and Boux Avenue -2.8%, the fall attributed ot low footfall and supply issues. The Paphitas Retail Group 6 weeks 24-Dec-17 1.7% n/a "Hard and unforgiving".
Total sales +15%. Good multi-channel offer has helped The Works to stand out. E-Commerce sales +37% and The Works 12 weeks 17-Jan-18 6.3% n/a 65 new stores supported growth. Targeting 50 new stores in 2018.
Online sales +13.1%. Figures reported include an extra trading day. Investment in service and range paid off, Topps Tiles 13 weeks 30-Dec-17 3.4%* 0.3%* supported by growing trade custom.
WH Smith 20 weeks 24-Jan-18 0%* 2.0%* Weak performance overall, with its Travel business (+7%) now the main revenue and profit driver.
*Total sales growth figures in the absence of LFL growth
CHRISTMAS TRADING RESULTS 2017 05 DEPARTMENT STORES
A mixed bag of results from the Department Store sector. Weak trading at Debenhams and M&S, together with negative trading and comments from House of Fraser, once again, calls into question the role of department stores in the new retail world. However, John Lewis continues to deliver, benefiting from its investment in digital, a strong brand and exceptional customer service. Perhaps, surprisingly, Black Friday was the Partnership’s best trading day ever. Fortnum’s also performed exceptionally well, profiting from premium gifting, domestic and tourist spend and a much improved online presence (online sales +23%). Selfridges also posted strong results (+10%) with sales + 13% in the pre- Christmas week.
RETAILER REPORTING PERIOD END OF PERIOD LFL SALES CHRISTMAS 2017 LFL SALES CHRISTMAS 2016 THEMES IN TRADING STATEMENT
Online the only bright spot (+15.1%) following investment in its mobile site. Overall sales and profits seem Debenhams 6 weeks 30-Dec-17 1.7% 4.9% to have been damaged by heavy discounting from Black Friday onwards.
Online sales +23%. While benefiting from tourist spend, F&M underlines that 77% of December sales Fortnum & Mason 5 weeks 31-Dec-17 13.0% 16.0% were from UK customers. Improved digital strategy.
Poor set of figures - instore sales -2.9% and e-commerce -7.5%. Downgrade in its credit rating and House of Fraser 6 weeks 23-Dec-17 -4.0%* n/a landlord negotiations to reduce rents have spooked the market. Serious challenges ahead.
Strong performance - gross sales +3.6%. Fashion (+4.9%) and electricals & home tech (+5%) performed John Lewis 6 weeks 30-Dec-17 3.1% 2.7% well. More experiences drew customers into stores. Black Friday was the company's best trading day ever.
Disappointing results - food sales (-0.4% LFL) and clothing & home (-2.8% LFL). Online sales also Marks & Spencer 13 weeks 30-Dec-17 1.1%* 4.5%* relatively weak at +3.0%.
Strong annual sales uplift of 10% and Oxford St footfall up 6% in December. Performance reflects Selfridges 24 days "Christmas" 10.0%* n/a exclusive products and in-store "theatre". E-commerce +17.8%. Figures do not include Black Friday.
*Total sales growth figures in the absence of LFL growth
CHRISTMAS TRADING RESULTS 2017 06 SUPERMARKETS
Aldi (+15% total sales) and Lidl (+16% total sales) appear to be the star performers, but neither reports LFL sales. Much of this growth is from new openings – and their aggressive expansion and market share growth will continue in 2018. A leaked memo suggests that Asda won the battle of the Big 4, with LFLs of +5.3%, but this is unconfirmed. Morrisons performed very well (+2.8% LFL), helped by growth in online (+10%), party platters and a successful premium product range. Sainsbury’s exceeded expectations (+1.1% LFL) as a result of outperformance in the convenience sector. Majestic held up well in the face of fierce competition from the discounters and Greggs released good figures (+3.7% LFL) in a transformational year that encompassed healthier ranges and 90 new stores.
RETAILER REPORTING PERIOD END OF PERIOD LFL SALES CHRISTMAS 2017 LFL SALES CHRISTMAS 2016 THEMES IN TRADING STATEMENT
Growth reported across all categories, but particularly strong (+30%) in its premium Specially Aldi 31 days 31-Dec-17 15%* 15%* Selected range.
Asda "Christmas" Not known 5.3% -2.9% Leaked internal memo suggests that Asda had the best Christmas trading of the Big 4.
Booker 16 weeks 29-Dec-17 3.8% 3.2% Group sales +3.4%. Benefiting from sustained turnaround, reducing costs and increasing margins.
Transformational year - 142 refurbishments and 90 openings. New healthier menu options have Greggs 52 weeks 30-Dec-17 3.7% 4.2% supported a 17th consecutive quarter of LFL growth.
Benefiting from consumers seeking best value essentials in high inflation environment. Aggressive Lidl 31 days 31-Dec-17 16%* 10%* store expansion - 34 openings in 2017 take portfolio to 693. Global Data estimates LFL at 6.6%.
Group sales +3.2%, boosted by the expanding international division of Naked Wines, which Majestic Wine 10 weeks 01-Jan-18 1.3% 7.5% accounted for 31.2% of sales in H1 2107/18. Stiff competition from the discount supermarkets.
Online sales increased by an estimated 10%. Ninth quarter of LFL growth (excl. fuel). Sales growth Morrisons 10 weeks 07-Jan-17 2.8% 3.3% driven by premium products (+25%) and food to order party platters (+50%).
Nisa 10 weeks 31-Dec-17 1.7% 2.2% Total sales +17.7%, benefiting from improved supply chain and enhanced fresh foods offer.
LFL growth (excl. fuel) exceeded expectations. Online sales (excl. Argos) +8.2%. Convenience Sainsbury's 15 weeks 06-Jan-17 1.1% 1.0% growth (+7.3%) well ahead of market. Argos reportedly grew market share in the quarter.
Strong Christmas trading driven by food (+3.7% LFL). Online sales growth disappointed (+5%) and Tesco 6 weeks 06-Jan-17 1.9% 0.7% convenience also underperformed (+2.3% LFL).
LFL (+1.5%) excl. fuel. Revenue grew 1.4% vs 4.8% in 2016/17. Improved customer experience has Waitrose 6 weeks 30-Dec-17 1.5% 2.8% provided competitive edge. 65.5% of John Lewis Click and Collect sales are collected from Waitrose - boosting implulse purchases. *Total sales growth figures in the absence of LFL growth
CHRISTMAS TRADING RESULTS 2017 07 CONTACTS
Central London Agency, Lease Advisory & Restaurants Agency – South
Paul Souber Bobby Blake Sasha Riddle Dan Simms Rupert Long Head of Central London Associate Director | Agency Senior Surveyor | Agency Head of Retail Agency – South Consultant - Shopping Centre Leasing and EMEA Retail Agency +44 20 7487 1764 +44 20 7487 1607 +44 20 7344 6869 +44 20 7344 6853 +44 20 7344 6870 [email protected] [email protected] [email protected] [email protected] [email protected]
Peter Flint Rosie Higgins Steve Burnaby Jessica Short Josh Leon Associate Director | Agency Senior Surveyor | Lease Advisory Director Surveyor Head of Central London | Restaurants +44 20 7344 6596 +44 20 7344 6842 +44 20 7487 1712 +44 20 7344 6564 +44 20 7487 1967 [email protected] [email protected] [email protected] [email protected] [email protected]
Greg Stalcup Cecily Offord Lloyd Entwistle David Carlsson Associate Director | Agency Surveyor | Agency Director Retail Strategy Director | Agency +44 20 7344 6548 +44 20 7487 1637 +44 20 7344 6812 +44 20 7344 6824 [email protected] [email protected] [email protected] Matthew Thompson [email protected] Associate Director Dan Taylor Mark Brennan Robin Raban-Williams +44 20 7344 6817 Will Hume Head of Central London Graduate Surveyor Consultant [email protected] Director| Lease Advisory Lease Advisory Lease Advisory +44 20 7344 6505 +44 20 7344 6845 +44 20 7344 6871 +44 20 7344 6672 [email protected] [email protected] [email protected] [email protected]
James Salvesen Research & Forecasting Sara Law Giles Smallwood Libby Hamilton Surveyor Mark Charlton Director | Agency Associate Director Graduate Surveyor | Agency +44 20 7344 6757 Head of Research & Forecasting +44 20 7344 6849 Lease Advisory +44 20 7344 6738 [email protected] +44 20 7487 1720 [email protected] +44 20 7344 6782 [email protected] [email protected] [email protected] Hal Clarke Peter Wood Surveyor Associate Director | Lease Advisory +44 20 7344 6920 +44 20 7344 6879 [email protected] [email protected]
CHRISTMAS TRADING RESULTS 2017 08 CONTACTS
UK Retail Capital Markets UK Retail Lease Advisory Out of Town Agency & Development
James Watson Mark Phillipson Matthew Hobbs Tony Briant Laurence Edwards Head of Retail Capital Markets Head of UK Retail Group Head of Retail Lease Advisory Consultant Director – Agency +44 20 7344 6877 +44 20 7344 6866 +44 20 7344 6843 +44 20 7344 6816 +44 20 7487 1870 [email protected] [email protected] [email protected] [email protected] [email protected]
Peter Hooper James Findlater Giles Roberts Andrew Kingston Nick Turk Consultant Head of Shopping Centre Investment Director Director Director – Lease Advisory +44 20 7344 6844 +44 20 7344 6833 +44 20 7487 1834 +44 20 7344 6848 +44 20 7344 6555 [email protected] [email protected] [email protected] [email protected] [email protected]
Nigel Panton Tom Edson Becky Hance Colin Moran Director Consultant Director | Head of Out Director +44 20 7344 6841 +44 20 7344 6865 of Town Investment +44 20 7344 6862 [email protected] [email protected] +44 20 7344 6554 colin.moran@collier s.com [email protected] Tim McIntosh Callum Jeffreys Katie Bapty Senior Surveyor Surveyor Andrew Marshall Director +44 20 7487 1852 +44 20 7487 1919 Director +44 117 917 2037 [email protected] [email protected] +44 20 7344 6854 [email protected] [email protected] Georgie Griffiths David Beck Surveyor Consultant +44 20 7344 6611 +44 20 7344 6807 [email protected] [email protected]
CHRISTMAS TRADING RESULTS 2017 09 CONTACTS
Agency – Midlands/North Retail Development Retail Scotland Retail Ireland Retail Belfast
David Fox Greg Styles Bob Fisher Declan Stone Jonathan Millar Head of Retail Agency – North Head of Retail Development Head of Scotland Managing Director Director – Investment, +44 20 7344 6834 +44 113 200 1818 +44 131 240 7522 Retail Capital Markets Development & Agency +44 28 9051 1008 [email protected] [email protected] [email protected] +353 1 633 3732 [email protected] [email protected] Tom Cullen Richard Watson John Duffy Declan Leonard Director Director – Development Director Michele McGarry Surveyor +44 113 200 1853 +44 113 200 1858 +44 141 226 1050 Director - Capital Markets +44 28 908 21125 [email protected] [email protected] [email protected] +353 1 633 3738 [email protected] [email protected] Emel Ahmet Tom Glynn Ross Wilkie Associate Director Associate Director Director Aiden McDonnell +44 121 265 7555 +44 113 200 1854 +44 141 226 1075 Associate Director [email protected] [email protected] [email protected] +353 1 633 3722 [email protected] Olivia Hughes Callum Robinson Tom Johnston Associate Director Surveyor Consultant Stephen Conway +44 20 7344 6874 +44 113 200 1802 +44 141 226 1003 Surveyor - Capital Markets [email protected] [email protected] [email protected] +353 1 633 3726 [email protected]
Paul Cummins Surveyor +353 1 633 3720 [email protected]
Max Duffy Graduate Surveyor +353 1 633 3765 [email protected]
CHRISTMAS TRADING RESULTS 2017 10 This report gives information based primarily on Colliers International data, which may be helpful in anticipating trends in the property sector. However, no warranty is given as to the accuracy of, and no liability for negligence is accepted in relation to, the forecasts, figures or conclusions contained in this report and they must not be relied on for investment or any other purposes. This report does not constitute and must not be treated as investment or valuation advice or an offer to buy or sell property. (2018) ©
Colliers International is the licensed trading name of Colliers International Property Advisers UK LLP (a limited liability partnership registered in England and Wales with registered number OC385143) and its subsidiary companies, the full list of which can be found on www.colliers.com/ukdisclaimer. Our registered office is at 50 George Street, London W1U 7GA.
Colliers London, 50 George Street, London, W1U 7GA CHRISTMAS TRADING RESULTS 2017 colliers.com