The Bullring shopping centre said record figures for last week’s sales showed the retail sector was back on track – despite signs the high street crisis is only set to get worse.
The city’s flagship retail area saw both sales figures and footfall grow by about 15 per cent on the same time the year before, which it attributed to good performance from fashion stores and other relatively high-end retailers.
But the area could soon be seeing a significant credit crunch victim after fashion chain USC – which has a sizeable branch in the Bullring – said it would be closing 15 stores after going into administration. The Birmingham branch of USC, along with those in Solihull and Stoke-on-Trent, is on a list of 29 stores from which 15 are expected to be wound up, according to administrators PKF.
And PKF partner Bryan Jackson said the economic storm hitting the high street was likely to worsen, with more casualties expected within weeks.
Half of USC’s 58 stores were bought back immediately by Dundonald Holdings, a subsidiary of its pre-administration owners WCC Holdings.
But the other half – which takes all three of the firm’s West Midlands branches – are now being run on a “week by week” basis by PKF while Dundonald decides which stores are to be kept and which are to be let go.
While doubt remained over the future of USC at the Bullring, many of the other shops reported promising results from the end-of-year sales running over the last month. A number of retailers at the centre reported an estimated sales increase of 15 per cent or more on the same week last year, including department store Debenhams.
Footfall at the Bullring was also up 16 per cent on the year before.
Bullring general manager Tim Walley said: “We have been extremely busy for the last week and it is showing no sign of letting up. We have welcomed over 335,000 visitors to the centre over the weekend and more are still flocking in. They are coming and as the sales growth shows, people are shopping which is great news.
“We have been bucking the trend at the Bullring for the majority of the year, although it’s certainly hit us later on. It’s only been since December we have seen a slowdown.
“We always suspected that the sales would be strong, even though there was a lot of speculation about retailers panicking during December.
Mr Walley said he would have expected the Bullring to have performed better than other shopping areas because of the more high-end mix of shops there, and the large number of people it serviced.
He added: “I think in many respects its down to the large catchment: we have got seven million customers within an hour’s drive here – sufficient numbers of people that have enough money to continue treating themselves.
“To some degree the Bullring is somewhat cushioned because of the strength of its line-up.”
He acknowledged there were likely to be difficult times ahead, with the first quarter of the year traditionally being the hardest for retailers. He said the Bullring would be looking for ways to “eliminate natural wastage” in its operations and staffing levels, to keep service charges for stores in check.
Mr Jackson painted a bleaker picture of the future of the retail sector, saying USC would not be the last chain to fall, and others could find themselves in trouble at the start of the new year.
Furniture retailer MFI; music and games chain Zavvi and Birmingham children’s clothes store Adams have already gone into administration, and others like Whittard of Chelsea and Officers club had to arrange rescue packages.
Mr Jackson added: “Unfortunately, I can’t really see it finishing in the short term. I would imagine that the casualties will increase at the turn of the year.
“To have casualties before you even make the turn of the year is unusual in the retail sector. So I can only guess it will actually get worse in the new year, and who knows when that will start to turn.
“I would certainly like to think and hope that by next Christmas things will be looking better rather than worse.”