Theo Paphitis issues stark warning over troubled retail sector

Lingerie entrepreneur Theo Paphitis has vocalised his concerns for the retail sector after witnessing his most “unforgiving” Christmas trading period to date.

The owner of Boux Avenue said in a statement this morning that with “very little interest” shown by the Government in this key economic pillar, it looks as though retail as we know it is “creeping closer and closer towards the precipice”.

“We continue to watch this space carefully but are not confident of improvements and see it as the biggest risk to our high street and physical shops,” he added.

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His warning comes after Boux Avenue witnessed a 2.8% fall in like-for-like sales in the six weeks to December 24.

For the year to April 1, 2017, total sales increased by 11.2% to £49.4m at the retailer, but losses increased due to heavy investment.

Overall, the Theo Paphitis Retail Group, which also includes Ryman and Robert Dyas, recorded a 1.7% growth in like-for-like sales over Christmas.

“As anticipated and reported, the Christmas trading period as has been the case for most of this year, was ‘hard work’ for many retailers,” said Paphitis.

“In all my years I have never seen it so hard and unforgiving where the shopper will punish you if you take your eye off the ball.”

The Retail Group found that footfall to its stores operating in key regional shopping centres was weaker than expected, impacting Boux Avenue more than the other brands. It also experienced some supply chain difficulties, which have now been rectified.

“The lack of footfall did lead to a very competitive market and I am pleased that our margins were only fractionally below last year,” continued Paphitis.

The entrepreneur believes that government thinking around changes to business legislation, policy and taxation revenues especially in the UK, is lagging behind the development of the retail sector globally, creating more uncertainty and risk for retailers.

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