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Multiples column
successful store and accounted for
about 13% of sales. Online sales
continue to grow at a fast rate – up by
35% at the end of November.
Pre-tax profit declined by 8% in the
year to May at Richer Sounds, despite
turnover from its 48 stores rocketing by
38%. Like-for-likes remain ‘significantly
above’ last year, though margins have
been under pressure. It purchased the
Empire Direct brand and website in
February.
Rental moves
Market leader Boxclever maintains a low
profile, generating cash by restricting
new products to long-standing
customers and keeping operating costs
low. Forbes continues to acquire
accounts from independents, though in
the past year, in a sign of the times, it
has purchased more from liquidators
and finance companies than from
dealers. An earlier decision to sell could
have seen dealers get up to 50% more.
Many had not been investing sufficiently
in new digital product, preferring to milk
rental to support a failing retail
operation.
The digital switchover has been good
for rental, though many customers leave
upgrades until the last minute. Set top continues to improve, it is still a long Of greater and more immediate
boxes tend to be seen as a quick fix and way from the levels seen prior to the concern to many independents will be
Forbes finds that most change to economic meltdown and, despite the John Lewis seeing the potential for
integrated products within three months. strength of seasonal spending, remains around 50 ‘at home’ stores. After the
Its white goods rental base continues to fragile and will doubtless become even success at Poole, it looks likely that the
grow. Since Dial-a-TV’s collapse early in more fickle with an election around the concept will be rolled out ‘at some pace’,
2009, the finance companies have been corner and the prospect of a penal especially whilst cheap out-of-town
running out the book. The debt ratios Budget looming whatever the result. property deals are available. That would
from its sub-prime activity have been The VAT increase, continuing high put a John Lewis outlet within a forty-
much higher than with a traditional rental levels of unemployment, and in many minute drive of all UK shoppers. A new
base. private sectors frozen or reduced wages department store normally takes more
Rent-to-own BrightHouse’s like-for- will significantly hit spending in the early than five years from the detailed planning
likes climbed 10% in the six months to months of 2010. However, that will not stage to welcoming shoppers; Poole
30 September, while earnings grew by put off those determined to take an opened within five months of the plan
24%. Domestic appliance and furniture increased slice of the electrical cake. being made public.
were particularly strong. It opened Supermarkets sense a real opportunity, The new president or retra, Shaun
eleven new stores taking the total to and according to grocery trade body Barrett, in his inaugural message to
188, and expects twenty more during IGD their non-food sales are expected to members sees the ongoing digital
the current financial year. rise by 40% over the next five years. switchover programme, the launch of
That will pile further pressure on Freeview HD and the World Cup in South
Looking forward traditional high street chains. Africa offering traders real reasons to be
Remarkably, in such a difficult economic So too will the arrival of US electricals upbeat: “If you have made it this far and
climate, most households have actually giant Best Buy when it makes a high- beaten the recession we can all look
had more disposable income of late, up profile UK debut in Hedge End in forward together to better trading and
6.5% on a year ago, according to the Southampton and Thurrock. As a exciting opportunities in 2010.” Many
Asda income tracker, due to reduced measure of intent, it hopes to create retailers, struggling with post-seasonal
mortgage payments and a low inflation eight thousand jobs in the UK over the blues and crossed fingers, will be hoping
rate. But whilst consumer confidence next five years. that such optimism is justified. ■
42 TheIndependentElectricalRetailer January 2010
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