The fall into administration of the likes of Peacocks, La Senza and Blacks’ may be part of an ongoing clear-out of retail stores that ultimately helps the remaining players on the high street to prosper.

This was the view of Garry Wilson, managing partner at turnaround specialist Endless, who recalls the collapse of Woolworths resulted in £2 billion of revenues being spread around the rest of the high street including Endless investment The Works.

Speaking at the Real Deals UK Mid-market 2012 Conference in London Wilson told delegates there would be other such failures as retailers fail to make the next quarter’s rental call, “This is hopefully the forest fire that was needed to let other retailers prosper.”

But despite this rationalisation he still questioned the appeal of retail to private equity investors. Going into administration means unprofitable stores can be dumped and leases re-negotiated, but Wilson cited the need for investors to give these troubled retailers big injections of working capital.
“Suppliers will be nervous of granting credit to a ‘newco’. We experienced this when we bought TJ Hughes [after it collapsed]. Asian suppliers now want paying up-front so some retailers will need huge investments in them and I can’t see who’ll invest?” he asked.

This is not the only problem, according to Paul Cartwright, managing partner at Rutland Partners, who suggests there are also structural issues facing the industry: “Do people actually want to go into stores. What’s the mix – out-of-town, online, high street? You need to be confident about some things [when investing], but with retail at the moment it is difficult putting pegs in the ground.”

For Andy Bond, chairman of Wiggle and former chief executive of Asda, this situation is exacerbated by the prospect of “four to five years of stagnant growth”, which when combined with the rise of the online channel will, he says force a fundamental re-think of how many stores retailers need.
He cites research from Javelin Group that suggests a clothing retailer previously needed 300 stores for a national presence whereas today 150 will suffice. “The property market has not yet caught up with the fact that there will be no stores growth in retail,” says Bond.

Peter Kemp-Welch, partner at Piper Private Equity, agrees the internet is having a “profound effect” on physical stores and that the recent announcement by Tesco that large stores were not going to be its key focus in the future was a “line in the sand that will wash through the whole of the property market”.

The need for fewer stores is a manifestation of the tough environment driving out the “marginal”, according to Roger Pedder, chairman of Bargain Booze and former chairman of Clarks, who believes the ultimate result could be wide-reaching.

“In a depressed economy it’s the marginal that fail – whether that is stores, retailers or sectors. The high street in many provincial towns is marginal compared with retail parks or the internet,” he argues.

Bond does not believe it is the internet that will necessarily be the death of high street stores and he refutes the argument that online-only merchants like Wiggle will benefit from high street bike retailers such as Evans effectively acting as show rooms for their online rivals.

“I’m not totally pro-internet because the statistics bear out that a huge percentage of in-store purchases have been researched online first. Eighty five per cent of purchases in-store will start online. It’s now a multi-media world. I’d say Evans is benefitting from Wiggle,” he suggests.

Where he thinks online does benefit is from the impressive range it can offer: “The killer for online bikes sites is that while independent stores have 3,000 SKUs Wiggle has 40,000 and 95% are in-stock and we offer next day delivery. Why get cold and wet going to the high street bike shops.”

Although Bobby Hashemi, partner at Risk Capital Partners – that has investments in Giraffe and Patisserie Valerie, says the leisure and hospitality sector has not been affected as much by the internet as the retail industry, he suggests 50% of people look online before visiting a restaurant – often for money-off vouchers. “It is having an effect on marketing as the voucher market is online and this is driving a lot of restaurant marketing,” he says.

But whatever the segment – leisure or retail – there is unanimous agreement that accessing debt is very tough at the moment for most businesses. But there are always exceptions for strong, differentiated operators.

Into this camp sits Wiggle, according to Bond, who says “we did not find it difficult to get debt”. However, he points out that it is an internet-only player that derives 50% of its sales and profits from overseas so it is a much more attractive proposition to banks and investors. “To a bank it fits into a very different bucket than a high street retailer,” he says.

The retail bulletin

Burger chain McDonald’s is using the UK as the base for a trial of four cutting-edge stores involving a raft of innovative technologies that it intends to roll out around the world.

Speaking at the Wincor Nixdorf Executive Briefing in New York – alongside the NRF Convention & Expo – Mark Fabes, IT director for McDonald’s Restaurants, stated that the UK was now leading on customer technology, which represents a radical departure from 2004 when he says the business was “on its knees”.

As part of its ‘Spirit of Family’ trial the company has four outlets around the UK that are the test-bed for initiatives in both the front-of-house and the kitchen. Each restaurant is fitted out with Wincor Nixdorf self-service kiosks that Fabes says enable customers to order at their own pace and which are particularly popular with families.

All orders are then transferred onto an order board at the front counter that shows if a customer’s food is ready or being prepared. Also at the front counter is a screen that shows images of what has been ordered thereby allowing any incorrect orders to be picked-up.

With free wi-fi and contactless payment platforms already in place in all McDonald’s UK stores Fabes says there is the potential for handheld ordering technologies to be implemented. By taking NFC technology he recognises the “massive opportunity for queue busting and taking additional orders from up-selling”.

Utilising this wi-fi are the 16 iPads that have been installed in the four trial stores. “They’ve been a big hit with children as lots of people do not have access to the internet [at home]. We had three stolen in the first week!” he says.

Also appealing to children are the interactive surfaces that enable games to be played on the surface of specific tables, and for more active games-playing there are the interactive floors. “We’re adding to the time people spend in-store so they’ll order extra coffee, a dessert and since the kids are running around like mad they’ll get thirsty,” says Fabes.

New technology is also being utilised in the back-office with a workforce management tool combined onto a single platform with the training programmes of each member of the crew. The crew rooms also have two PCs installed that provide the ability for work scheduling, online learning, and access to Facebook.

These various initiatives have resulted in sales rising by 18% and Fabes confirmed four or five more stores will be added to the trial. “The UK is the trial country but it’s being developed for global use. Consumers are connected and we’ve got to be prepared for this,” he suggests.

(Source: Glynn Davis www.theretailbulletin.com)

WH Smith has described its performance as resilient during the Christmas shopping season and said that profit was in line with expectations.

In a trading update covering the 21 weeks to 21 January 2012, the book, newspaper and stationery  retailer said total sales were down 3% with like-for-like sales down 5% in the period.

In the group’s High Street division total sales were down 5% with like-for-likes down 6%. Excluding Entertainment, like-for-likes sales were down 4%. However, gross margin improved in the period and costs were tightly managed.

In  the travel division total sales were up 2% with like-for-like sales down 3% in the period. The group said its  new store opening programme was “on track” as it  continues to identify further opportunities for growth both in the UK and internationally.

Commenting on the results, Kate Swann, group chief executive said: “During the period we saw a resilient performance in challenging trading conditions. Gross margin was in line with plan and costs were tightly controlled.

“Over the past six years both businesses have consistently increased profits and the Group is now well balanced between Travel and High Street. As a result of this, the months of November and December now represent less than half of annual Group profit compared to over 90% of Group profit six years ago.

“Looking ahead, we expect the trading environment to be challenging however we have planned accordingly and continue to be confident in making further progress in the year.”

(Source: www.theretailbulletin.com)

The very first South Yorkshire Business Conference is due to take place in Barnsley on 24th February 2012.  This ground breaking event is being organised jointly by all the Chambers of Commerce in the Sheffield City Region Local Enterprise Partnership.

The half-day conference will see the region’s businesses, politicians and partner organisations descend on Barnsley Metrodome to set the regional agenda of priorities for 2012.

The keynote speaker will be The Right Honourable John Bercow MP, Speaker of the House of Commons.

The interactive conference will also feature:

Informative case studies relating to the three headline themes – Skills for Growth, Infrastructure for Growth and Conditions for Growth.

Interactive panel discussions featuring regional MPs, SYPTE, Senior Local Authority Officers, Council Leaders and the British Chamber of Commerce.

The cost of the highly informative event is only £20, which includes lunch and ample networking opportunities with the region’s leading businesses, politicians and partner organisations.

Contact lee.wilkinson@brchamber.co.uk or telephone 0844 2253 213 to book your place.

Whilst most of the major contracts for the Olympic and Paralympic Games have been awarded there are still many others for ‘peripheral’ services which can be obtained.

There are already 13 International Teams and 6 GB teams who are basing themsleves in Yorkshire during the games period.  These  teams will want many products and services while they are here.  This is NOT “darn sarth” but right here in Yorkshire so, with an estimated spend of £3M, it’s time to get into action and see just how much of it you can get.

In addition there is the torch relay and whilst it is passing through the area at many points it is also spending several nights in regional locations.  Obviously these people will also need many different types of goods and services, can you supply any?

To obtain details of what is available and how you can tender for work you need to log on to the various web sites and see what you can do.  The main site for all major contracts is www.comepetefor.com.  However, locally this work is being managed by Yorkshire Gold Business Club and their contact is www.ygbc.co.uk.  Finally London Organising Committee for the Olympic Games (LOCOG) also have a web site at www.london2012.com/business-network

Now is the time for you to get on to those web sites and get yourself a slice of the action.  “If we do nowt we’ll get nowt” so don’t lose an opportunity to get some contracts for yourselves.  Who knows, a little work now and getting a good reputation from the right people could lead to lots more work in the future!

James Hudson Taylor was a Christian who left Barnsley in the 19th Century and sailed to China.  Whilst there he opened 125 schools and converted 18,000 people to Christianity.  Since then it has been estimated that 70 million Chinese are now Christians as a result of his work.  Over recent years we have had a few Chinese Christians visit Barnsley to see the town where he came from but it is becoming clear that this interest is growing as more and more Chinese are visiting this country.  With the Chinese Olympic Team based in Leeds it is also possible that some of those will also want to visit Barnsley.

Clearly, this missionary is someone the town can be justly proud of and in order to show visitors something of him and his life it is the intention to create a ‘Hudson Taylor Trail’ around the town with plaques showing key points of interest.

So often we forget the work of our ancestors but on this occasion a group of committed Christians have come together to make sure that on this occasion this man is never forgotten.

If we are having many Chinese visitors then there is also the opportunity for Barnsley based businesses invloved in any customer facing activities, to develop a strategy so that theses visitors can get a warm Barnsley welcome and also be encouraged to spend their money in the town.  Can you do something that links you to Hudson Taylor?

New figures show that six in 10 small firms believe the London 2012 Games will not have a positive impact on their business in the long term despite David Cameron saying that the UK is “on track” for a lasting legacy. As the UK marks 200 days until the start of the Olympic and Paralympic Games, the FSB’s „Voice of Small Business‟ Survey Panel shows that 62 per cent of small firms believe that the Games will have no long term positive impact on their business, despite promises that the legacy of the London 2012 Games will have impact in all corners of the UK and will continue for years. Only seven per cent of small businesses believe the Games will benefit their business overall, and a quarter (25%) expect a negative impact on their business.

The FSB is concerned that when the bid for the London 2012 Games went through, it was sold on the basis that these would not merely be London’s games‟, but would create a long legacy for all regions of the country. Yet clearly small businesses do not believe that they will benefit from this. With 200 days to go, the FSB is calling on the Government and Olympics Authorities to ensure that small firms are aware of how they can reap the benefits of the Games and the tourism benefits that can come from them.

The phenomenal cost being borne by the taxpayer demands that everything must be done to secure benefits for businesses nationally. Gordon Millward, the FSB’s Regional Chairman, said: “It is worrying that 200 days before the Olympic and Paralympic Games are set to begin, small businesses think it will not benefit their business. This is even more worrying considering the London 2012 Games was sold on the basis of its legacy, and so far we‟ve seen precious little benefit coming to firms in the north. We all know times are tough, but 2012 is a year of big events that small firms should be able to benefit from. The Government and Olympic Authorities must help show small businesses how they can reap the rewards from one of the biggest sporting and tourism events the country has seen for years.”

(source www.fsb.org.uk)

Local businesses have been given an insight on the impact that the London 2012 Olympic and Paralympic Games on businesses in the region and across the UK.

Business people joined MPs John Healey, Dan Jarvis and Angela Smith at the Holiday Inn Barnsley for the event, hosted by Barnsley & Rotherham Chamber of Commerce and the Newham-Barnsley Partnership, a unique link established by Barnsley Council with London Borough of Newham – the principal host borough for the Games.

Delegates heard from Clive Dutton, Executive Director for Regeneration, Planning and Property at the London Borough of Newham, on the impact that London 2012 has had on the business community and the prosperity and regeneration of Newham and East London.

Lauren Pigg, of Yorkshire Gold Business Club, explained the opportunities presented by the UK’s ‘decade of sport’ through ‘Compete For’ – the London 2012 procurement portal. Businesses from Barnsley, including Constructional Timber, have already benefitted from London 2012, through ‘Compete For.’

Councillor Stephen Houghton said: “Through the Newham Barnsley Partnership, we are putting ourselves at the forefront of the legacy from London 2012 and as part of that we are doing our best to exploit the opportunities for Barnsley’s businesses. Working with the Chamber of Commerce, we will continue to make the most of our partnership with Newham, and our unique link to the London Games, to keep driving the economic development of our town.”

2011 was the year of the entrepreneur. Lets take a look at the success stories of some of Barnsley businesses overturning the downturn.

Industrialists, coal and steel magnates, car makers and ship builders were once the business people who mattered.

That is changing. Entreprenurs are on the rise and rule books are being re-written. Entrepreneurism was once regarded as risky, voguish and not to be taken seriously. Now it’s in danger of providing the only action in town.

A Firm picked up its biggest volume of orders at the start of 2011 in more than 10 years.

Merlin software at Barnsley Business and innovation centre acquired 11 customers mainly in tourism. The boom was caused by the re-launch of a system covering admissions and ticketing.

Wombwell based Fernco Environmental, a subsidiary of of the coupling company Flexseal, cemented its position in german and australian markets. It became a supplier to Sydney water and launched a spray stop erosion to pipes from acidity or sewage.

Osborne Technologies at Dodworth changed the way schools nationwide kept track of people coming in and out of their properties with a touch-screen signing in system. The firm developed the system to log visitors to its reception and it has been fitted in 50 schools and colleges.

Evolution scooters at platts common became the fastest growing UK dealership of Chinese made Lexmoto and Pulse Scooters.

Go for Gardens at Claycliffe was on track to be the top online garden centre in the UK. Boss Eddie Riby is Regularly hailed as a model entrepreneur. But he did not always have it easy. He recalls lots of late nights looking at and adjusting overheads.

Eddie says you must learn from your mistakes, roll up your sleeves and be prepared to get your hands dirty.

He sums up success as hard work, having the right team, good customer service and having the right products at the right price.

(source Barnsley Chronicle, Friday, December 30, 2011)

Television retail analyst Mary Portas has completed her government-backed review into the future of the local High Street and is warning that the sector is reaching “crisis point”.

She outlines he proposals for a National Market Day and relaxation of rules to make it easier to set up street stalls in order to reinvigorate the High Street. Barnsley Market received specific recognition in the report for how easy it is for people to get started in business.

Speaking on The Today programme on Radio 4 this morning, retail expert Mary Portas told interviewer Sarah Montague that the best market she had been to was Barnsley because you can put a table out for £10 and get started.

Mary was speaking about the publication of her government-commissioned report which calls for red tape to be cut to help town centres flourish. The report outlines 28 steps that need to be taken to improve the retail sector. 12 of these steps can be carried out locally and out of the 12, Barnsley are doing all them.

The full interview can be found at http://news.bbc.co.uk/today/hi/today/newsid_9661000/9661144.stm