Home news Theo Paphitis says retail nearing 'precipice'

Theo Paphitis says retail nearing 'precipice'

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Theo Paphitis has blamed the Government for allowing the UK’s beleaguered retail sector to slide “closer and closer towards the precipice”.

The former Dragons’ Den star, and entrepreneur behind high street chains Ryman, Robert Dyas and Boux Avenue, blamed changes to business law as well as the disparity in taxes facing online platforms and bricks-and-mortar retailers.

Mr Paphitis made the comments as a slew of trading updates have started to reveal just how challenging Christmas has been for UK stores amid a squeeze on household spending.
He revealed that two of his own brands had seen like-for-like sales growth in the six weeks to 24 December, with stationer Ryman up 4.8% and household good chain Robert Dyas up 2%.
But there was a 2.8% decline for lingerie brand Boux Avenue, blamed on weaker than expected footfall at regional shopping centres as well as temporary supply chain difficulties.
Mr Paphitis said: “As anticipated and reported, the Christmas trading period as has been the case for most of this year, was ‘hard work’ for many retailers.
“In all my years I have never seen it so hard and unforgiving where the shopper will punish you if you take your eye off the ball.

“It has now become clear that governmental thinking around changes to business legislation, policy and taxation of revenues especially in the UK, is lagging well behind the development of the retail sector globally, which is creating more uncertainty and risk for retailers and thus the economy.
“With very little interest shown by Government in this key economic pillar, it really does feel like retail as we know it is creeping closer and closer towards the precipice.
“We continue to watch this space carefully but are not confident of improvements and see it as the biggest risk to our high street and physical shops.”
Mr Paphitis’s comments on taxation echo the growing chorus of unrest from traditional retailers who believe the business rates burden they face puts them at a disadvantage to online rivals.

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The remarks follow profit warnings from Debenhams and Mothercare after disappointing Christmas trading – though there was a better than expected performance from fashion chain Next.
Meanwhile, the end of 2017 saw some high street names collapse or come close to the brink, with furniture retailer Multiyork going into administration and Toys R Us winning a reprieve from creditors though left having to close 26 stores.

Source: SKY