Northern Ireland’s beleaguered retail sector is set for a fresh battering as major retailers brace themselves for gloomy updates this week.
Fashion chain Next and department store Debenhams will today report their figures, followed by high street giant Marks & Spencer tomorrow.
Retail experts warn that Next’s profits could plunge 30% in the final six months of its current financial year, while Debenhams is said to be planning a fund-raising move in a bid to reduce its £1bn debt.
Analysts are predicting that M&S could see slumps of up to 9.6%, which would represent the firm’s worst performance since 1999.
Economics consultant John Simpson today warns that the next two months will claim a large number of casualties in the retail sector.
His comments come after insolvency experts Begbies Traynor predicted that up to 15 UK chains could go bust by mid-January.
Mr Simpson said: “We have not really begun to see the doom and gloom. I think the next two months will be a sharp awakening for all of us.”
“The big stores in the run up to Christmas put on a very persuasive show of major discounting to try and drive up business.
“This was their attempt to move stock. However, in January and going into February they will have difficulty moving stock. Discretionary spending is likely to be hit quite hard in the next few weeks.”
He added: “I think we should be ready in the next two months for a much larger number of casualties than anyone is prepared for.
“In the last five or six years, we have gone through the biggest single expansion in the Northern Ireland economy with the arrival of new retail stores and the opening of shopping centres, which are now vulnerable because they were relying on growth.”
It comes against a backdrop of high street collapses including Woolworths, which will today close the doors on its final 200 stores with a loss of 27,000 jobs.
Adams Childrenswear, owned by Antrim businessman John Shannon, announced 850 redundancies yesterday as a result of the closure of 111 stores, including five in Northern Ireland. The remaining stores in the province, which employ 60 people, will stay open as the administrators seek a purchaser for the business.
Iconic Irish crystal and china maker Waterford Wedgwood also collapsed yesterday, putting 2,700 jobs at risk in the UK and Ireland.
But it’s not all bad news. The Bank of England’s Monetary Policy Committee meets on Thursday and may cut the current interest rate of 2% to 1.5% — good news for homeowners and businesses.
Border towns are also profiting due to the strength of the euro against the pound.
And last night there was good news for holiday-makers as the pound made its biggest gain in 10 years against the single currency and climbed against the dollar.