The Makeover Craze Plumbs New Depths; CITY FOCUS

Article excerpt


AFTER years of exponential growth - buoyed by TV programmes such as Changing Rooms - the Do-It-Yourself sector is falling to new lows.

Tax increases and fears about the housing market have caused consumers to rein in spending and put home improvement projects on hold.

Sales have slumped at almost all of the major DIY retailers and conditions are the toughest since records began.

Big-ticket items such as kitchens and conservatories have been particularly hard hit, but even pots of paint and screws have seen a drop in demand as consumers focus on essential items such as food.

Travis Perkins, owner of the Wickes DIY chain, warned yesterday that the market continues to deteriorate.

The gloomy update came as the British Retail Consortium revealed that underlying retail sales fell 1pc in August, the fifth consecutive month of declining sales.

It was an improvement on the 1.9pc drop seen in July, but that was mainly because stores slashed prices to lure shoppers.

Clothing and footwear sales worsened while furniture, homeware and electricals continue to be hardest hit, the BRC said.

Travis said sales at its Wickes superstores fell 4.2pc on an underlying basis for the first six months of the year. In July and August, the decline worsened to 7.4pc.

Finance director Paul Hampden Smith said: 'We need another interest rate cut sooner rather than later.' He sees no respite in 2005 and reckons the market will remain 'fragile' for another year.

Retail consultancy Verdict says the DIY and gardening sector will see its first-ever decline in 2005. It forecasts that spending will fall by 1.6pc to [pounds sterling]16.4bn, following a decade of strong growth.

Verdict's Gavin Rothwell blames 'the slump in mortgage- equity withdrawals and concern about the housing market'. In previous years, homeowners have been happy to increase their mortgages to fund big DIY projects.

This year Rothwell reckons equity withdrawals will drop to [pounds sterling]29.1bn compared with [pounds sterling]50.5bn in 2004. …