Survival of the fittest

Faced with more predictions of a protracted slowdown by retail’s top brass, the outlook is glum. Yesterday, Jose Luis Duran, boss of French supermarket Carrefour, told delegates that retailers are facing challenges “the scale of which we’ve not seen in decades or even in our lifetimes”.

“We are seeing downright pessimism, even fear, in America,” said Liz Claiborne chairman emeritus Paul Charron of the state of mind of the US consumer.

However, fashion aficionado Sir Philip Green provided a glimpse of sunshine in the drizzly Spanish city. The Arcadia and Bhs chief offered a Darwinian view of the present state of play. He said successful trading through the downturn would not be achieved by cutting costs or making job losses, but by the evolution of the business model. He blamed the previous ease with which funding for deals could be got for resulting in a case of the “blind leading the blind” and said the subsequent corporate culture had “taken away visionary people”.

So, we only have our greedy selves to blame for making hay while the sun shone. The separation of the wheat from the chaff should be no bad thing in a market where jittery customers need to feel they have a clear reason to shop at one retailer over another.

And the evolution of the private equity deal is also necessary to buoy the sector again. Speaking in Barcelona, Baugur executive chairman Jón sgeir Jóhannesson forecast the resurgence of the private equity deal, but with considerably more equity than before. The Icelandic investor’s divestment this week of its media and technology portfolio to concentrate£430 million worth of investment solely on retail should be viewed with optimism.

And other opportunities remain, even in the most unsuspected places. A former Green colleague at MKOne, Elaine Gray, is understood to be finalising details to acquire the£25 million debt for value player Ethel Austin – at a knock-down price. The news has raised more than a few eyebrows.

Since the Austin family sold its controlling stake in 2002, the retailer has been dogged by strategic reviews, breached banking covenants and whispers of administration, the latter being vehemently denied by management. And yet Gray is believed to be keen to take on the challenge. There seems to be an emerging theme among a key few who are prepared to put their necks out where others are winding them in. It is these people whom Green might include in his “visionary” camp.