Following the BRC's revelation that like-for-like sales edged up slightly in November, we report this week that a wide variety of store groups are enjoying the growing festive spirit. Whether it's upscale department store group Harvey Nichols, which has enjoyed comparable sales growth of 8 per cent in recent weeks, or fast-fashion chain Zara, where there has been 'a significant improvement' since the cold weather kicked in, retailers are feeling a little less sorry for themselves.
The City has bought into the sense of upswing. Yesterday, Marks & Spencer's shares reached 475p - their highest level in seven years. Only a few days before, increasingly bullish sentiment towards Next pushed the retailer's value up by more than 7 per cent week on week.
But Santa hasn't arrived yet. November like-for-likes may have been positive, but the climb was only 0.8 per cent - the first time in eight months that the figure hasn't been in negative territory.
All the excitement of the past few days is a reaction to just how tough it has been for retailers this year, rather than a sign that it's all over. The bright sunlit uplands may be glimpsed through the mist, but retailers still have some travelling to do before they get there. Just ask Stephen Marks, whose French Connection business this morning warned on profits once again.
It's ironic that, just as things appear to be on the turn, the management of value fashion group Peacocks was given the go-ahead on Wednesday to take the business private. Among the backers of the£400 million deal, led by chief executive Richard Kirk, is a clutch of hedge funds. Will this be another instance of traditional City investors failing to recognise value and handing over on a plate, profit growth to come? Part of the problem is the timescales that big investment firms work to. Under huge pressure to generate whopping returns as quickly as possible, they move money in and out of companies faster than the stock-turn at Primark. To quote one analyst, 'they regard 24 hours as a long-term investment.' No wonder that store chiefs such as Kirk get frustrated that the value of their businesses may not be understood or recognised, and head off down the private route. But if investors refuse to recognise value, they can't complain when someone else realises it under a different ownership structure.
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