Tough times hit High Street names

28 June 2011 Last updated at 16:25 GMT Carpetright has reported a 70% drop in profit Tough times are continuing for UK retailers with Thorntons set to shut up to 180 stores and Carpetright saying it may close as many as 50 outlets.

Chocolate maker Thorntons said it would shut "a minimum" of 120 shops over the next three years, with the possibility of an extra 60 closures.

Carpetright could close up to 50 shops when their leases run out if it cannot get the rents reduced, it said.

Meanwhile, store chain TJ Hughes is set to go into administration.

If it does, it will join three other retailers who announced over the past week that they had called in administrators in the face of tough trading conditions.

These are fashion retailer Jane Norman; the owner of Moben and Kitchens Direct, Homeform; and furniture firm Habitat.

Rent for the past three months was due last week, and insolvency experts said this had brought a number of High Street names "to their knees", with more set to follow.

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There is a serious risk that many thousands of jobs will be lost and many many hundreds of additional shops will become empty and shuttered”

End Quote Robert Peston Business editor, BBC News "It is likely that the next quarter rent day in September could see a further surge in the number of retailers facing administration as High Street stores struggle to pay the rent against a backdrop of decreasing discretionary spending and low consumer confidence," said Julie Palmer, a partner at insolvency practitioners Begbies Traynor.

Declining household incomes and uncertainty about the economy have hit consumer spending.

This was underlined by figures from the Office for National Statistics which showed that real household disposable incomes had fallen 2.7% in the first quarter of 2011 compared with a year earlier - the biggest fall since 1977.

Speaking to MPs, Bank of England governor Sir Mervyn King said inflation, which erodes the value of household incomes, was "uncomfortably high".

He added that he was "definitely concerned" by "the squeeze on real living standards".

Matthew Stych, research director at Planet Retail, said: "With no sign of a big improvement in job prospects and rising fuel costs putting pressure on transport and logistics, and a possible interest rate rise on the horizon, it is very difficult to see any light at the end of the tunnel."

'Continuing weakness'

Thorntons' store closure announcement followed a strategic review of the business.

It said the outlets to be closed were among the 364 stores directly owned and run by the company.

Thorntons is hoping to see more franchised stores

Thorntons added that it hoped to replace them with franchised stores "in the majority of locations".

It currently has 227 shops run by franchisees.

Chief executive Jonathan Hart said: "Our goal is to refocus the business across all channels, and seek to deliver industry competitive results over the next three to five years.

"Although we see the prospect of weakness in High Street footfall and consumer sentiment continuing, I am confident that this strategy is right."

The company added that it would continue to expand its commercial division, which sells Thornton-branded chocolate via supermarkets and other retailers.

In addition, it aims to continue to grow sales via its website.

Richard Perks, retail analyst at Mintel, said there was an opportunity for Thorntons to turnaround its fortunes, but that it currently "doesn't know where to pitch itself".

'Very challenging'

Analysts said that chains selling homewares and other more expensive items were being particularly hard hit as consumers were forced to cut back.

"Retailers are really struggling to pick up sales on big ticket items," said Matthew Stych from consultants Planet Retail.

Continue reading the main story "Both DIY and large-scale electronics are being affected by this with people putting off purchasing items such as fridges and waiting to revamp their kitchen or buy a new TV."

Carpetright chairman and chief executive Lord Harris said his group was facing "very challenging trading conditions".

He pointed to "fragile consumer confidence producing a weak floor coverings market, leading to a reduction in sales volumes and profitability".

There is uncertainty over the future of 50 of its 559 stores in the UK and the Irish Republic, whose leases run out over the next three years.

Pre-tax profit for the year to 30 April was ?6.6m at the carpet and home flooring group, down 70% from the ?22.3m a year earlier.

Its trading was hit not just by reduced consumer spending, but also the continuing weakness in the housing market.

Annual revenues were 6% lower at ?486.8m.

The company had already issued two profit warnings earlier this year, and it has closed 27 outlets over the past 12 months.

Shares in Carpetright were 3.6% lower in afternoon trading, while those in Thorntons were down 7.2%.

Trade downturn

Liverpool-based department store chain TJ Hughes said it was planning to appoint an administrator after reporting a downturn in trade.

The Liverpool-based firm employs more than 4,000 people at its 57 stores across England and Wales.

It said it would bring in the administrator over the next 10 days.

The retailer was bought out by its management team in March following the withdrawal of credit insurance for its suppliers.

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Escaped cattle take over street

28 June 2011 Last updated at 15:11 GMT Udder chaos - the cows took over the front lawns in Peacehaven, Tredegar A quiet street in Tredegar, Blaenau Gwent, was invaded by a herd of cows which trampled on gardens and peered into windows, say residents.

The 20 cattle escaped from their nearby paddock and decided to feast on front lawns and flowers in Peacehaven.

Residents are used to straying sheep but say the rogue cattle have become a nuisance.

Blaenau Gwent council says it is monitoring the situation.

Resident Sonya Gould, 70, said: "We are used to having pints of milk delivered to our doorstep but not the whole cow.

"They were everywhere. We are all treading cow muck into our carpets because it's all over our garden paths.

"We held a fund-raising event to plant flowers around the communal gardens but the cows have eaten them all."

The cows also raised frowns by leaving cowpats on garden paths and trampling over lawns in the incident at the end of last week.

Ann Ingram, who was woken up by the cows mooing, said: "It used to be sheep, and that's bad enough, but cows are a whole different kettle of fish.

Residents have alerted the council to the issue and it says it is monitoring the situation

"It's frightening for many of the older people here to have cows walking down the street, peering in their windows, it's ridiculous.

"They're obviously big animals, and an elderly person can't just shoo them off - there's no telling what an animal might do."

People living in Peacehaven have brought in the council in a bid to get the herd to move back to their paddock.

A spokesperson for Blaenau Gwent Council said: "We've done our utmost to tackle this problem, and have responded to all call-outs.

"We continue to monitor the situation at least once a week and any roaming animals will be impounded."

The council added that they may take legal action against the farmer if he is unable to keep his cows under control.

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High street art

21 June 2011 Last updated at 11:12 GMT By Ian Youngs Arts reporter, BBC News Last weekend, shoppers popping into the Gregg's bakery or the Pret a Manger on one of the busiest streets in Leeds may have noticed something strange going on next door.

The "bring your own art" exhibition in Leeds attracted more than 80 artists

Instead of the shell left over from the clothes store at 31 Bond Street, which went bust in 2009, they would have found the shop filled with paintings, drawings, photographs and live art.

There was a sculpture of a toothbrush with human hair instead of bristles and the walls were crowded with canvases and prints.

Three children had been cajoled into becoming a mini-art movement and were drawing portraits on demand. A home-made ping-pong table constructed from an old cupboard was part installation, part entertainment.

This was a bring your own art show, open to all-comers - a DIY answer to the Royal Academy Summer Exhibition.

More than 80 eager art-makers turned up to put their work in this pop-up gallery. Organised by the Woolgather art collective, the quality was variable but the artists could show off their work in a location they would normally only dream of.

They are not the only artists to take advantage of the empty shops and offices that have spread like a plague on the country's high streets since the recession.

Almost one in 10 stores in the UK are vacant, according to a recent survey by property consultants Colliers International.

In Leeds, arts, theatre and film-making groups have turned this in their favour by occupying around 18 vacant commercial properties.

A solicitors' office in Newcastle has been transformed into artists' studios

Old office blocks are used for photo displays, students' exhibitions and life drawing classes, while there is a temporary film set in a disused 7,000 square foot warehouse.

That will not give much comfort to those who used to work there, but for the artists, it is an unexpected bonus of the credit crunch.

Ken Stratford, operations manager at Leeds-based East Street Arts, which runs the units, says the artists would not have otherwise had access to such large, well-located and cheap spaces.

"The premises are being used for public benefit, we're brightening up areas that are standing empty and helping to change the image, and we get the resource that we can give artists to use," he says.

And the artists' occupations are entirely legal.

Most landlords pay full business rates on properties that have been empty for more than three months. But if they let them to charities, they get 80% off.

So it pays to allow arts organisations like East Street Arts, which is a charity, to house-sit until new commercial tenants can be found.

In Newcastle, a condemned, non-descript five-storey former solicitors' office block in the city centre has been commandeered by artists for use as studios. There will be 65 when the building is full.

Inside, the managers' cubicles have been occupied by fine artists, while the open-plan areas are littered with sculptural debris and half-finished large-scale creations.

Artists recently occupied an empty shop in Kilburn, north London. Photo: Dan Thompson

Swathes of the generic blue carpet squares have been ripped up, the bog-standard white ceiling tiles displaced, and the building's past is further obscured by the jumbles of tools, electrical equipment, books and materials scattered around the floor.

Artists in the NewBridge Project pay ?15 a week for a studio. The project has also set up a ground floor gallery in an old housing association office.

The initiative is run by Will Marshall and Will Strong, two Newcastle University fine art graduates, who say it has helped the local creative culture by allowing more graduates to stay in the city.

"One of the unique things about Newcastle is that there is this wealth of empty space," Will Strong says.

"There is a wealth of huge business premises slap-bang in the city centre that you can do very interesting projects from, rather than just being these scars on the city."

Arts Council England allocated ?500,000 to 24 empty shops projects in 2009, and says it continues to fund others, including the NewBridge Project. The number of empty shops and offices used by artists is clearly a tiny proportion of the total, though.

Artist Dan Thompson, who heads the Empty Shops Network, has been colonising unused units for a decade and advises like-minded creators on how to do the same thing.

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Because it's low cost and it's often temporary, it gives you a chance to be bold and try things that you might not try otherwise”

End Quote Dan Thompson Artist "People are fed up of empty shops, they are fed up of units that sit there doing nothing," he says. "They'd rather see them doing something creative and fun rather than just being empty."

The number of artists moving into the high street is "going up and up all the time", he believes. "When we started 10 years ago there were a few people who did it here and there. Now it feels like every town has got something going on."

Thompson has transformed languishing shops in Shoreham-by-Sea, West Sussex, and Kilburn, north London.

His next project, The Ministry of Littlehampton, will see children from 11 local schools compiling an alternative guide to the West Sussex town.

Calling himself a "social artist", he quotes the Turner Prize-winner Jeremy Deller when defining an artist's role: "It's about making things happen, rather than making things."

Shops are better than traditional galleries, he says, because they are less intimidating for visitors and easier to exhibit in for artists.

"Because it's low cost and it's often temporary, it gives you a chance to be bold and try things that you might not try otherwise," he adds. "It gives you a chance to experiment."

And local communities and businesses benefit because artists spruce up their shops and bring in a new crowd, he explains.

"We've done up the shop front, we've re-planted all the planters in the precinct," he says of the Kilburn project. "It looks better now than it did before we came. So everybody wins."

The Woolgather exhibition at 31 Bond Street, Leeds, will re-open from Thursday to Saturday from 1200 to 1800 BST.

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Downing Street flat's £30k refit

27 May 2011 Last updated at 16:54 GMT By Ross Hawkins Political correspondent, BBC News The inside of the newly revamped flat was revealed in a photograph this week The prime minister spent the full ?30,000 of taxpayers' money available to him to refurbish his official flat in the last financial year, Downing Street has confirmed.

Officials say no public money was spent on furniture, fittings or accessories.

It went instead on electrical works and plumbing, structural alterations, and painting and decorating.

Labour MP Tom Watson said the ?30,000 grant was a "hidden bonus for the PM" for a flat he lives in rent-free.

Downing Street said any cost of renovations above the ?30,000 budget was paid for by the Camerons themselves.

Earlier this week the White House released a picture of Samantha Cameron and Michelle Obama in the recently renovated flat above Number 11 Downing Street, where the PM and his family live.

The picture showed, for the first time, the newly installed kitchen.

Labour MP Mr Watson told the BBC: "Good Prime Ministers lead by example. David Cameron says the public sector should tighten belts and come clean where taxpayers' money is spent. Yet when it comes to the Downing Street flat, we see a refusal to answer even basic questions on costs. He has now been forced to admit it cost at least ?30,000 to refurbish his grace and favour home - more than a policeman's salary. Are we really all in this together?"

Downing Street sources said former Labour Prime Minister Gordon Brown spent between ?28,150 and ?29,389 of the annual budget for refurbishing the PM's residence during his time in office.

Figures from the Cabinet Office show a total of ?683,102 has been spent refurbishing and renovating Number 10 since the general election.

A spokeswoman said a modernisation programme was launched in 2006 under the last government to address structural repairs in Downing Street.

Figures for previous years show almost ?1.5m was spent in 1996/1997, ?1.3m in 2007/08 and ?802,658 in 2001/02 maintaining the Downing Street estate, although these figures may include work on Numbers 10, 11 and 12.

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