Sir Philip Green warns of tough autumn

Top Shop and Arcadia Group owner Sir Philip Green has warned retailers face a tough final quarter as they navigate an increase in their costs and fragile consumer confidence. As was published in the Financial Times, Green was spoke on the fringes of an award ceremony at the Fashion Retail Academy, the industry-backed retail school, Sir Philip said the final three months of the year would be the “big unknown” for the industry. Sir Philip said retailers faced adverse currency movements, as well as the planned increase in VAT at the turn of the year. Many retailers import goods from Asia, paying in dollars. As the pound has slumped, so the cost of buying in goods has risen.

Marks and Spencer said last week it expected its prices to rise by about 3 per cent in the autumn. Next, the fashion retailer, and Home Retail Group, the owner of the Argos and Homebase chains, have also warned of price rises.

Yet the likely price increases come as consumer confidence remains brittle, with unemployment rising. “You can’t not be worried about unemployment generally,” said Sir Philip. He said consumer sentiment was still “unknown; I don’t think anybody really knows.”

Retailers would have benefited from the recent warm weather, he said, although weekend trade would have been “a bit softer because people are in the park and the garden”.

Source: Financial Times