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Stock Market Trend Forecast March to September 2019

UK Retail Sector Catastrophe - Toys R Us Woolworth's Moment - ALL Stores Closed Down!

Companies / Retail Sector Sep 07, 2018 - 05:41 AM GMT

By: Nadeem_Walayat

Companies

I have been warning for several years now that the UK retail sector was facing a crisis that would result in several Woolworth moments of giant retailers going bust, closing down ALL of their stores. This year has seen the retail sector crisis turn into a catastrophe with several popular chains such as Maplins and Toys closing down ALL of their stores, with many more chains such as New Look, Debenhams and Marks and Spencer teetering on the brink, and not even the pound stores are immune to the unfolding high street catastrophe as illustrated by the fate of Poundstretcher.


ToysRUs - The Trend Towards Bankruptcy

In December the British arm of Toys R Us came to within hours of going bust the followed it's american parent company's filing for bankruptcy protection in September 2017 which that triggered a downsizing programme through rapid store closures that are likely to see at least 200 of it's 866 US stores close in an attempt at reducing its $5 billion debt mountain which dates back to its leveraged buy out of 2005 that costs Toys R Us $400 billion a year in interest payments.

So it should not come as that much of a surprise that the British arm of Toys R Us with its 106 stores was heading towards a similar fate if not a 'Woolworth's' moment, as December saw the retailer teetering on the brink of collapse with the potential loss of 3200 jobs. The triggering factor for which is a £30 million black hole in its employees pension fund that had the Government Pension Protection Fund was demanding a near immediate payment of £9 million into to cover 3 years worth of past pension contributions, against which the distressed retailer was offering just £1.6 million as I covered in my following video at that time:

However, whilst Toys R US managed too get through December's crisis still remained in deep distress, whilst The Entertainer Toy Shop chain has continued to thrive with its much smaller stores more convientely located within popular shopping malls, rather than Toys R Us's huge stores in distant retail parks as the following video illustrates of one little girls birthday shopping trip to The Entertainer Toy Shop.

The Entertainer Toy Shop Review

Unfortunately ToysRUs never stood an a chance with the crunch point being March 2018 when it appears the management threw in the towel when the bulk of ToysRUs stores were closed with Sheffield's mega store closing down in April 2018.

So watch the video for a reminder of what it was like to shop in ToysRUs Sheffield store before it closed down where we basically had the whole store to ourselves. And yes I most definitely would wonder how is this store going to survive without customers! Watching the patterns of behaviour amongst worried staff, who whilst trying to act normal were eagerly trying to find ways of intervening in attempts at pushing stock onto customers, something I am seeing repeating across the UK retailer sector from across the price range top to bottom. Retail workers are very, very worried about their jobs in virtually every high street store!

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2018 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Housing Markets Forecast 2014-2018The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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