online retail

Lockdown Pushes Gap Online As Clothing Retailer Announces Closure of All of Its British Stores

Following 15 months of draconian lockdown restrictions, Gap has announced the closure of all its 81 stores in the U.K. and Ireland, with an estimated loss of over 1,000 jobs. The U.S. clothing retailer is also considering reducing store numbers in both France and Italy and blames “market dynamics” for massive losses last year. MailOnline has the story.

Phased closures will start in August and continue through to September, the U.S. chain revealed.

It comes after a year of coronavirus lockdowns battering the U.K. high street, with other popular chains including TopShop going under. …

[Gap said in a statement]: “In the United Kingdom and Europe, we are going to maintain our Gap online business.

“The e-commerce business continues to grow and we want to meet our customers where they are shopping. We’re becoming a digital-first business and we’re looking for a partner to help drive our online business.

“However, due to market dynamics in the United Kingdom and the Republic of Ireland, we shared with our team today that we are proposing to close all company-operated Gap Specialty and Gap Outlet stores in the United Kingdom and Republic of Ireland in a phased manner from the end of August through the end of September 2021.

“We are thoughtfully moving through the consultation process with our European team, and we will provide support and transition assistance for our colleagues as we look to wind down stores.” …

For the year from February 1st, 2020, Gap’s U.K. retail sales fell by 9.5% to £195.1 million. Its operating losses were at £40.7 million. …

Founded in 1969 and headquartered in San Francisco, the firm has struggled in recent years and like most retailers saw store footfall slump during the pandemic. …

It comes just months after high street giant Debenhams confirmed the last of its stores would close for the final time.

The department store launched a post-lockdown fire sale before the chain shuttered its stores, marking the end of a 242-year presence in Britain’s towns and cities.

The outlook for Britain’s high street is dire. More than 11,000 outlets permanently closed in 2020 and the Local Data Company expects that this will be followed by 18,000 more closures in 2021.

The MailOnline report is worth reading in full.

Lockdowns Have Cost £22 Billion in Lost Sales, Say British Retailers

Lockdowns across 2020 alone cost British “non-essential” retail £22 billion in lost sales, according to a new analysis by the British Retail Consortium (BRC). All the while, online retail profits – such as for the fashion retailer ASOS – have soared. Here are the key findings:

2020 was the worst year on record for retail sales growth with in-store non-food declining by 24% compared with 2019. These results have also been reflected in footfall, which was down over 40% in 2020. After some retailers embraced rapid increases in demand, others found their doors closed for the third time at the end of last year.

The BRC calculates that the three lockdowns cost “non-food” stores – mainly “non-essential” retail – an estimated £22 billion in lost sales. Furthermore, tighter restrictions in the crucial run-up to Christmas hampered retailers’ ability to generate much-needed turnover, which would have helped power their recovery in 2021. Retailers contributed £17 billion in business taxes in 2019, collecting a further £46 billion in VAT. A strong retail sector is essential to ensuring these future revenue streams for Government and local councils, vital for supporting local communities.

A recent study by the Local Data Company found that 11,000 shops permanently closed in the UK in 2020. This is expected to be followed by a further 18,000 closures in 2021.

Helen Dickinson OBE, Chief Executive of the BRC, said that retail firms are in desperate need of support from the Government in order to continue trading.

After 2020 proved to be the worst year on record, it is essential that the Chancellor uses the Spring budget to support those businesses hardest hit by the pandemic. Vital support in the form of an extension to the business rates relief and moratorium on debt enforcement, as well as removing state aid caps on Covid business grants, would relieve struggling businesses of bills they cannot currently pay and allow them to trade their way to recovery.

Tackling the challenge of Rates, Rents and Grants should be the Government’s immediate priority to ensuring the survival and revival of non-essential retailers and protecting the jobs of hundreds of thousands of retail workers across the country. The investment we provide to retailers now, will be repaid many times over through more jobs and greater tax revenues in the future.

Worth reading in full.

Stop Press: The Guardian has detailed the ways in which various “non-essential” retailers are planning to make real-life shopping trips “a pastime once again” when lockdown is eased slightly on Monday.

Marks & Spencer will instigate “greeters” at the doors of its stores, and contact-free bra fittings. There will be edits designed for current lifestyles, from barbecues in the garden, to working from home. 

At John Lewis, Beautycycle will be in place from April 19th. For every five items of beauty packaging returned, customers will get £10 off their next beauty purchase until the end of April.

Gap will be offering free masks with a purchase to those with their Gap+ app, and Primark will be open two more hours every day next week.

Other retailers are taking a playful approach. River Island, which will launch stores in Coventry and Swindon next week, has a “shop like it’s 2019” campaign; one sign in store says: “In 2019 pyjamas were not acceptable work attire.” Anyone who makes a purchase in April will receive a voucher for 20.19% off their next purchase.

Worth reading in full.

Online Retail Profits Soar While High Street Suffers

The success of online retail over the past year of lockdowns is showcased by ASOS, the online fashion retailer, which has seen its active customer numbers rise from 1.5 million to 24.9 million in the six months to February. The impact of lockdowns on the high street has, on the other hand, been catastrophic. Eleven thousand shops in Britain closed last year alone and thousands more are expected to close in 2021. The Guardian has the story.

ASOS has more than tripled first-half profits to a record £106 million and raised full-year expectations as the online retailer continues to benefit from the pandemic.

Consumer trends accelerated by Covid had boosted trading, particularly in the UK and most of Europe, the company said, but it cautioned that the economic outlook was uncertain and shopping habits would change once clothing stores reopen next week.

While the reopening of “non-essential” shops next week will shift consumer attention from online to the high street, the continued imposition of rules on social distancing and mask-wearing will act as a brake on any recovery for the high street. ASOS said in a statement:

In the coming months we expect a portion of consumer demand will move back to stores as restrictions are eased throughout our markets, but we expect online penetration to remain structurally higher than pre-Covid levels.

The company’s recent performance is as follows:

Profits increased 253% year-on-year increase to £106.4 million in the six months to February 28th, as total group revenues climbed 24% to £1.97 billion.

Asos put a number on the amount of profit generated by the pandemic, identifying £48.5 million of “net Covid tailwind”. …

The company said the Topshop and Miss Selfridge brands as well as the activewear label HIIT, acquired from Sir Philip Green’s Arcadia empire for £330 million in February, had been “seamlessly” integrated into its online platform and had achieved “great early customer momentum”.

The number of active customers rose by 1.5 million to 24.9 million, which the company said was a good performance given the lockdown had led to fewer “event-led” reasons for people to shop for formal and occasionwear.

Last month, we reported on the damage done to the high street by the lockdowns and the tough restrictions in between. A study by the Local Data Company found that 11,000 shops permanently closed in the UK in 2020. This is expected to be followed by a further 18,000 closures in 2021.