Weekly Winners in Retail

Weekly Winners in Retail – 27.07.20

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If retailers didn’t have enough on their plate with limited customers allowed in a store and extra costs to protect the safety of their staff and customers, the next government restriction has meant that customers will have to be turned away if they are not wearing a mask. So how will this impact on sales numbers and will footfall actually increase, with a nation divided on how comfortable they are in wearing face masks?

In amongst these challenging times we continue to read about good news stories which we want to shout about. Here’s our winners of the week:

  1. Kingfisher reaps the rewards from many consumers staying at home

When: 22nd July

What’s the news?

As many expected the home improvement sector to suffer as lockdown restrictions were lifted, Kingfisher, owners of B&Q and Screwfix defy expectations as they post strong Q2 trading figures (based on figures up to the 18th July). The brand has managed to benefit from the prolonged demand for home improvement, by recognising that not all consumers would be willing to come back to store, therefore investing in online sales and fulfilment capabilities.

B&Q contributes to Kingfisher Group’s H2 sales performance

Source: Retail Times

What do we expect to see?

We expect that consumer confidence to head back to store will not improve significantly now, until there is a proven vaccine. The first day of mandatory face mask wearing saw a slight drop in footfall by 0.2%, meaning consumers will be spending more time at home. For home improvement brands to compete with Kingfisher, they will need to provide seamless online experiences across the full customer journey. We are excited to see which home improvement brand will bring Augmented Reality into online store experience.

  1. French Connection secures £15m funding

When: 24th July

What’s the news?

French Connection have received a £15 million cash injection from turnaround specialist firm Hilco Capital to help it mitigate the financial impact of the coronavirus pandemic. The fashion retailer said the working capital facility with Hilco Capital is for the next two years. This is a much-needed boost for the retailer who has been struggling to deliver financially, with significant losses posted in previous years.

A digital-first approach is an essential next move for French Connection

Source: Retail Gazette

What do we expect to see?

Whilst some of this investment will need to be invested in costs including landlord payments, French Connection need to be using some of this investment to move their operation to a digital first approach to ensure they can deliver a true retail recovery and return to profit. At RetailRecovery we used our RetailEvaluator approach to appraise their product payment and fulfilment options. Two areas that they need to move quickly on to at least be competitive with other fashion and home retailers includes the introduction of click and collect options and the use of buy now, pay later credit options such as Klarna or Clearpay.

  1. New jobs announced by Hotel Chocolat and PrettyLittleThing

When: 24th July

What’s the news?

In a period where many retailers are having to let staff go, both brands are expected to recruit an additional 200 new people each. Hotel Chocolat’s significant growth in online sales is the driver behind their announcement, with the fast tracking of digital innovation and their planned subscription model. Whilst for PrettyLittleThing, they have submitted plans to Manchester City Council for increasing the size of their HQ, after exceptional growth, which has been seen both pre and during the Pandemic. Although not guaranteed, if the planning permission is accepted, new jobs will be available in the future.

Whilst stores where closed, Hotel Chocolat still delighted their customers

Source: Essential Retail (Hotel Chocolat)

Source: Business Live (PrettyLittleThing)

What do we expect to see?

Whilst un-employment rate is higher due to Covid, it is clear that there are areas of growth in the job market. Those who have been on furlough or have felt un-certainty surrounding their job will hopefully have spent time up-skilling themselves in new areas, putting themselves in pole position for these new opportunities.

Want to be a retail winner?

Are you looking for a digital-first approach?Our RetailEvaluator framework enables you to understand where you can improve your retail plan both today and in the future.

Alternatively, you can download our FREE Covid-19 retail strategy whitepaper, containing more than 110 practical recommendations, to help you navigate today’s current climate and plan for business growth.

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