Does size matter in the UK retail sector?
With news that JD Sports may potentially look to merge with JJB Sports, many are starting to ask whether size matters on the UK high street in an attempt to secure safety in the medium to longer term. There seems to be a general misconception that it is only the smaller companies which are suffering when we have seen the likes of MFI, Woolworths and other major players in the UK high-street inform the market of their troubles.
The main issue for the retail sector is balance sheet strength and a company's ability to remain competitive, retain sales and ensure good cash flow in the short to medium term. Even many of the larger UK operations are struggling to maintain their cash flow and when DSG International (the owner of Dixons, Currys and PC World) is struggling then we really know something is wrong.
It will be interesting to see what happens over the next few weeks and months and whether a number of these small to medium-size companies begin merger talks in order to try and strengthen both their balance sheets and their spread of retail products. Those who make it through the Christmas period unscathed may well look at their options in the New Year.
Share this..
Related stories
UK rental market has shrunk
While conditions are still difficult in the UK property sector, rental sector and general economy, the massive boom in residential buy to let property in the UK appears to be coming to an end. Information from the Royal institution of Chartered Surveyors has confirmed that the number of rental properties on the market has now shrunk to levels not seen since 1998, signalling the end of a massive bo...
Read MoreUK manufacturing slides again but pace of decline is slowing
The UK manufacturing industry declined again in January although the rate of decline has slowed from recent months. However, there are serious concerns that the industry is in a severe downward spiral amid claims that domestic demand has evaporated and vital overseas markets have yet to kick in despite the massive reduction in the sterling exchange rate.
In truth the sector has been...
JJB Sports looking to raise £100 million
Embattled UK retailer JJB Sports has today confirmed plans to raise up to £100 million via a deeply discounted rights issue. Initially the company had been thought to be looking for around £50 million although this has been increased with news that the company's main shareholders are backing the fund raising proposals. So what next?
The company was forced to issue a statement this...
Gordon Brown's leadership called into question
Labour MPs Patricia Hewitt and Geoff Hoon have today issued an "unsent letter" to Labour colleagues suggesting the time has come to have a secret ballot regarding Gordon Brown's future as leader of the Labour Party. This could not have come at a worse time for the UK government with the economy struggling to turn the corner, a general election just weeks away and a Conservative party which is well...
Read MoreCar Parking Appeal Wins Hit 94%
At this moment in time it seems as though the cost of running a car in the UK is going higher and higher with little likelihood of a reduction in costs in the short term. However, there is a little bit of good news with confirmation that overall, councils across the UK are losing 94% of car park fine appeals. This has seen thousands of drivers winning the fight to over turn unfair car parking ti...
Read More