Online Retailers Outcompete Traditional Stores, Investors Cautioned

  • Department stores in England have declined by 25% in less than a decade
  • Online shopping has impacted department stores more severely than other high street retailers
  • High debt burdens from M&A activity hinder investment in e-commerce and store refurbishment
  • Debenhams and BHS as examples of struggling department stores with large debts
  • Marks & Spencer plans to close 100 stores by 2022
  • Retail property can still be a good investment with careful consideration

A new study by Lendy reveals that the number of large department stores in England has dropped by 25% within a decade. The decline is attributed to the impact of online shopping and heavy debt burdens carried by these groups due to increased M&A activity. Department stores have struggled more than other high street retailers, as they’ve used debt for dividend payments instead of investing in e-commerce channels. Debenhams and BHS serve as examples with debts of £1bn and £1.3bn respectively. Marks & Spencer plans to close 100 stores by 2022. Lendy advises investors to carefully consider retail property investments, taking into account the financial strength of retailers and risks in the sector.

Factuality Level: 8
Factuality Justification: The article provides accurate and objective information about the decline of large department stores in England due to online shopping and high debt burdens, citing specific examples like Debenhams and BHS. It also offers advice for investors on how to approach retail property investments.
Noise Level: 3
Noise Justification: The article provides relevant information about the decline of department stores in England due to online shopping and high debt burdens, but it lacks a more in-depth analysis of long-term trends or possibilities, accountability for decision-makers, scientific rigor, and actionable insights. It also stays mostly on topic without diving into unrelated territories.
Financial Relevance: Yes
Financial Markets Impacted: Department store companies and retail property market
Financial Rating Justification: The article discusses the decline of department stores due to their high debt burdens, impacting their ability to compete with online competitors and affecting their financial performance. This has implications for investors in these companies and the retail property market.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: Minor
Extreme Rating Justification: There is no extreme event mentioned in the article, and the situation described is related to financial challenges faced by department stores due to online shopping competition and high debt burdens.

Reported publicly: www.retailsector.co.uk