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The sun shines on retail again

April 15, 2010 10:31

By

Alex Brummer,

Alex Brummer

3 min read

The speed with which retail has bounced back from the "Great Recession" is impressive. The high street was hard hit by the aftermath of the global credit crisis, consumer spending fell off a cliff and a number of retailers, including Woolworth, Zavvi, childrenswear chain Adams and footwear group Stylo went into administration.

The sector was not helped by the collapse of the Icelandic banks, the main lenders to such vehicles as Baugur with interests across Britain's high streets and malls including enterprises such as toy specialist Hamleys, the frozen food retailer Iceland and up-market department store group House of Fraser.

A year later, however, and the retail sector is looking a great deal healthier, despite the decision of the government to raise VAT back to 17.5 per cent in January after 12 months of holding the rate at 15 per cent. The temporary cut pumped an estimated £11bn back into the economy.

Evidence of the repair work and increasing confidence among retail groups has been seen across the market. It ranges from luxury goods brand Net-a-Porter, to the mid-market as represented by Marks & Spencer, as well as the bottom end where discount clothing retailer Matalan has been resurrected.