John Lewis and H&M defy the ongoing high street gloom

Published on Friday 15 August 2008 21:51

THERE was some brighter news from the high street yesterday as department store chain John Lewis and fashion retailer H&M defied the spending downturn to post stronger summer sales figures.

Statistics released earlier this week by the British Retail Consortium showed UK retail sales had fallen by almost 1 per cent during July – the fourth decline in the past five months.

However, John Lewis brought some cheer to the sector after it reported a 9.3 per cent gain in weekly sales while H&M, the Swedish fashion giant with a growing presence in the UK, said its July takings had leapt by 15 per cent.

It marks the second week in a row that John Lewis has reported a positive outcome for its 26-strong department store chain, although ten of the past 14 weeks have seen sales decline.

The employee-owned business is seen as a barometer of middle-class spending.

Last week's strong performance was driven by double-digit increases in sales of electrical goods and clothing, John Lewis noted.

The chain's three Scottish stores experienced mixed fortunes. While Aberdeen racked up an 8.1 per cent rise in overall sales, the outlets in Edinburgh and Glasgow fell by 1.9 and 7.7 per cent, respectively.

Total sales across the 26 stores topped 48 million during the week to 9 August.

Barry Matheson, head of selling development, said: "Many branches commented on the effect of unsettled weather last week, which clearly drove footfall into our shops compared to a year ago."

H&M's sales gain was better than expected, as cost-conscious shoppers snapped up its moderately priced clothes.

Although the group has benefited from new store openings, underlying turnover was also up, rising 3 per cent in July, against forecasts for a 2.1 per cent gain.

Kaupthing analyst Peter Wallin said: "Sales are a little bit better than the market expectations. It shows the trend we have seen – that in a weak market H&M will perform better than the underlying clothing market."