Thursday, 23rd May 2019 13:14 - by Rajan Dhall
Things are going from bad to worse for UK retail firms as Topshop owner Phillip Green confirms more store closures in the UK and the closure of all the stores in the US.
Looking at other news this week, another key name in UK retail struggled too. Marks and Spencer's shares have fallen from 600p in 2015 to just 238p today, over 50%!. People who have been following my commentary in the equities space will know that I have been talking about this for a number of years now especially since Brexit. The fall in the pound hit the likes of Dixons Carphone hard and made importing costs unsustainable for some. The rise of commercial property rents made no sense in a time where these companies needed support. The government announced an online tax to provide subsidies to the high st but nothing concrete was laid out. Dave Lewis from Tesco has also called on a so called "Amazon Tax" to help control the situation. The fact of the matter is that high street stores have not kept up with technology and the cost of running the stores is crippling the industry.
Below is a chart comparing some of the UK's retails biggest names. It's clear to see the companies that have focused on a push to online are performing well. But Next has started to bounce back it does have a growing online presence but is traditionally a high street store. The difference between the online names is clear since 2017 Boohoo has outperformed Dixons and Marks and Spencer and Next dramatically.