Fashion results in the shop window

Published on Saturday 20 March 2010 12:43

THE economic downturn's impact on fashion will come into focus on the retail industry's "super Thursday" this week when retailers Next, Moss Bros and Ted Baker all unveil annual results for 2009.

The same day, the Office for National Statistics is expected to say retail sales in February rebounded by 1.3 per cent in February, after slumping 1.8 per cent the previous month when footfall was hit by harsh weather conditions.

Resilient fashion and homewares chain Next has so far resisted high street doom and gloom. The group saw a marked turnaround in 2009, with better-than-expected trading after it refocused the business to "aggressively back new products and trends".

It made a series of profit upgrades throughout the year. Next posted a 6.9 per cent hike in interim pre-tax profits to 185.5 million and said trading in the all-important Christmas period had gone well.

This led to yet another full-year profits upgrade in January, with Next saying that it expected annual pre-tax profits of between 490m to 500m – a marked improvement on the 428.8m reported a year earlier.

The company has been overhauling its ranges, while also keeping price-tags down by driving tough negotiations on stock prices and freight costs. But they have still been cautious on trading in 2010.

Men's clothing retailer and formal hire shop Moss Bros may not have such a good story to tell. Although the company recently insisted it was continuing to improve on last year's performance, analysts expect it to record a 5.7m loss on Thursday. The firm is searching for a new chairman after the surprise resignation of David Adams last week.

In December, Moss Bros reported a 5.5 per cent improvement in like-for-like sales for the 18 weeks to 5 December, but it has not updated on its Christmas performance. Last year it lost 5m.

Ted Baker is thought to have been attracting glances since the news of SuperGroup's 5 a share IPO.

It is thought a successful flotation of SuperGroup might prompt investors to look again at Ted Baker.

According to analysts, Ted Baker shares many characteristics with SuperGroup. Each sells fashionable product, neither is particularly dependent on seasonal collections, and each is run by a founder with a personal stake in continued success – in Ted Baker's case Ray Kelvin. And each has similar opportunities, notably to expand internationally.

Ted Baker's retail sales over Christmas soared 19.1 per cent. Although internationally the performance was mixed, the UK beat expectations where promotions were down and margins up.