Companies: JJB    SPD   

Wiping away their tears with their surplus England replica shirts, sports retailers took a dark view of the England team’s failure. Sports Direct, the controversial vehicle of Newcastle United chairman Mike Ashley, warned on profits on the back of the shock Croatia result, while fellow shareholder in England kit-maker Umbro, JJB, was marked lower after saying it now saw ‘no incremental revenue’ arising from next summer’s tournament.

However, with Christmas only days away, most retailers are in overdrive during their key selling season, with sales of Christmas-related goods expected to reach almost £12 billion this year, according to research from the British Retail Consortium (BRC). This year, each person is predicted to spend an average of £435 on Christmas gifts, 12 per cent more than last year, with clothes, books, films and music likely to be the most popular gifts.

‘The retail sector has experienced challenging trading conditions this year and, with even tougher times ahead, these figures will be encouraging for many retailers,’ observes the BRC’s director general Kevin Hawkins. He balanced this with the reasoning that the recent slump in consumer confidence and falling spending power is likely to mean any growth will come from discounting and that the first quarter of next year should be hard. ‘If retailers do see a boom this Christmas, it will be followed by a slump in spending, as consumers really start to feel the pinch and tighten their belts.’

Analysts Ian McDougall and Greg Lawless at broker Blue Oar agree: ‘We don’t think Christmas will be a disaster, although there will be casualties… However, [the first half of] 2008 looks very dubious indeed and downgrades for 2008/09 are being priced in.’ The online space provides the only genuine cause for seasonal cheer, with some companies enjoying 50 per cent growth on last year. Blue Oar notes that ‘some commentators, not hysterical people, think it will account for almost ten per cent of retail spending in three to four years’ time’.