Dec 22, 2017

UK department stores hunker down for tough Christmas

It is only an advert, but it could be the true story of a department store executive's life this Christmas: a hairy monster hides under the bed, its heavy breathing making for a sleepless night. "Department stores are in for a poor Christmas because of the structural pressure they're under," says Tony Shiret, an analyst at Whitman Howard. John Lewis is not the only traditional department store putting on a brave face at Christmas while facing tough conditions. Privately held House of Fraser, owned by China's Sanpower, has seen its bonds trade at less than 90p in the pound; the debt must be repaid in July 2019, just four months after the UK is due to leave the EU. Britain's departments stores are at the frontline of pressures in the retail market as they continue to rely on outdated shopping formats, maintaining expensive physical space even as they try to find their way online. Property experts say cavernous department store buildings, with their narrow entranceways and sparse windows, are less adaptable than smaller high street stores, meaning it can be harder to offload stores to new tenants.

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