Two retail giants have highlighted the pressure the sector is under with one posting a huge fall in sales while the other is talks to save it from disappearing from the High Street.
The John Lewis Partnership said department store sales were down 13 per cent last week compared to a year ago, while Woolworths bosses were in talks with a potential buyer to save it from going under.
John Lewis, which has a store at Touchwood in Solihull, said it had seen signs that the Christmas shopping season had begun, with sales in the seven days to Saturday November 22, up 11.3 per cent on the previous week.
John Lewis director of selling operations Dan Knowles said: “Inevitably, because of the current economic climate, sales are still down on last year – by 13 per cent – however this week has shown that Christmas shopping has certainly begun.”
He said the company sold £68 million worth of products last week, about 7,000 items every minute.
Referring to the raft of sales on the high street during the week, he said: “The competitors doing these sort of stunts, it is quite good for us because we get more footfall on the high street.”
However, whether this increased footfall will be enough to save Woolworths is still up for debate after the company was last week valued at just £1 due to its high level of debt.
Hilco, the restructuring specialist said to be interested in buying the retailers’ 800-store business arm for a nominal £1, is thought to have sweetened its offer by saying it would assume a greater share of Woolworths’ debt.
It has been reported that Hilco tabled a last-ditch offer this weekend to take on up to £300 million of the group’s debts, leaving lenders with just £85 million.
Last week the syndicate of lenders, led by Bank of Ireland subsidiary Burdale Financial and GMAC Commercial, held out on the deal in which Hilco was reported to have offered to buy the shops for £1 and assume about £265 million of Woolworths’ debts.
If a deal was reached in the next few days, the group could fall into administration – putting 30,000 jobs at risk.