Newspaper article The Journal (Newcastle, England)

Time to Check out the High Street's Health

Newspaper article The Journal (Newcastle, England)

Time to Check out the High Street's Health

Article excerpt

Byline: By Graeme Evans

One of the toughest years on record for the retail sector will be highlighted next week as a clutch of famous high street names come to the market with figures for 2005.

While most of the results are likely to be disappointing, analysts will be more concerned about prospects for the year ahead.

The precarious state of the DIY sector in the UK will be laid bare tomorrow when B&Q owner Kingfisher announces full-year results ( expected to show a sharp decline in profits from pounds 663.6m to pounds 440m, according to analysts at investment bank Credit Suisse.

Like-for-like sales fell 9% in the final quarter of the financial year, while promotional activity required to stimulate business is likely to have taken its toll on margins.

Initiatives to improve the performance have included more price promotions, improved ranges of ceramics and premium kitchens and the introduction of new service staff to 200 stores in 2006.

But B&Q is very much dependent on activity in the housing market so analysts expect any upturn in business to be delayed until the second half of the year at the earliest.

As well as B&Q, Kingfisher owns Castorama and Brico Depot in France and has operations around the world, including China.

Fashion chain Next thrilled the City in January with news that total sales were up almost 10% in the build-up to Christmas, thanks to a host of new stores.

It prompted the group to promise profits of between pounds 435m and pounds 450m for the year to January 31 ( better than both the pounds 420m previously forecast by analysts and ahead of last year's figure of pounds 423m.

But recent figures from the British Retail Consortium have shown that the high street as a whole suffered its worst January for a decade, so there will be much attention on Next's final results on Thursday.

Shore Capital Stockbrokers forecast pre-tax profits of pounds 447.5m, and there will also be interest in Next's current trading with Barclays expecting "a cautious outlook". …

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