John Lewis has bucked the trend for gloomy retail trading updates, reporting a sales rebound last week after discounted clothing lured shoppers back into stores.
The department store group, which is owned by staff, said fashion and beauty sales rose 9.3% in the week to 15 December compared with the same period last year.
The improvement at John Lewis, which has reported several weeks of declining sales, will steady nerves after days of dire trading updates from retailers in the crucial pre-Christmas period.
Monday was a particularly tough day for retail stocks as investors were panicked by an unexpected profit warning from Asos. That came after similar warnings from Bonmarché and Superdry last week, when the Sports Direct boss, Mike Ashley, said the high street risked being “smashed to pieces” by dismal trading in the run-up to Christmas.
John Lewis’s beauty, wellbeing and leisure sales jumped nearly 16%; womenswear and menswear also increased, up 8.5% and 7.2% respectively. Sales of electrical goods were down by 4.3% as the department store group did not repeat promotions that were in place a year ago. John Lewis said it had nevertheless recorded strong sales of mobile phones, Dyson Airwrap hair stylers and smart watches. Homeware sales were down 1.7%.
The overall return to form came alongside good news from Angling Direct, which said sales soared nearly 56% during the week of Black Friday. The minnow’s shares shares rose nearly 2% to 83.5p, valuing the fishing specialist at about £54m, just £3m less than Debenhams.
Analysts at Cantor Fitzgerald and Jefferies downgraded full-year profit expectations for Asos by 55% on Tuesday, noting tough trading conditions in France, Germany, Australia and the UK.
Caroline Gulliver, an equity research analyst at Jefferies, said the online fashion retailer had underestimated the scale of discounting that would be required to be competitive on Black Friday. “We are disappointed that Asos, with all its rich customer data, was not able to plan and execute a better Black Friday,” she said.
Gloom from Asos dragged down the sector, with the general retailers’ share index falling 3.6% on Monday and Asos’s rival Boohoo as well as JD Sports, Quiz and the Figleaves owner N Brown hit hard.
Concerns have also been raised by the relatively low number of shoppers visiting high streets and shopping centres, putting footfall level with this time last year when trading was heavily affected by ice and snow.
Fashion and homeware appear to have been particularly affected by unseasonably warm weather and low consumer confidence amid Brexit uncertainty. Sales of fashion at established stores fell by 0.6% in the week to 14 December, according to data from the advisory firm BDO.
