Already a retailer has issued a profits warning and has blamed the snow. Meanwhile, the Federation of Small Businesses has called for the government to give a helping hand to businesses that are reeling thanks to the bad weather.
Alexon, the women’s fashion group that includes the Ann Harvey, Eastex and Kaliko brands, has said like-for-like sales have fallen 20 per cent in the last three weeks, that profits would fall by £1.5m as a result, and that the company may then break one of its banking covenants.
Apparently the store’s clothes are aimed at mature women, which has meant the snow has a disproportionate effect on its sales.
Meanwhile, the FSB has claimed that the bad weather is costing the economy between £600 million and £1 billion every day, and wants to see the government and the banks provide more help to businesses that have been hit especially hard.
It wants to see HMRC extend its Time to Pay scheme to allow small businesses time to recoup lost takings in order to have the cash flow to be able to pay. It also wants landlords, especially where the landlord is the local council, to push back rent reviews due in the New Year.
The FSB also says local councils should use their powers to grant hardship relief and temporarily reduce business rate bills for those businesses in financial difficulty, and that banks, utilities and insurers should give small businesses some breathing space.
John Walker, National Chairman, Federation of Small Businesses, said: “Small businesses were banking on a good Christmas to make up for a bad year and the prospect of more bad news in 2011. Many shops and restaurants have taken on additional seasonal staff to cope with the anticipated demand of the Christmas season, but last weekend saw a drop in footfall of up to 30 per cent, leaving businesses with increased overheads and falling trade.
“The last thing this Government needs is a wave of bankruptcies and shop closures in 2011, but small firms will find it very difficult to bounce back in the New Year when VAT increases to 20 per cent and the spending cuts start to bite.
“We need to see a co-ordinated effort from Government, banks, local authorities and landlords to give small businesses some breathing space to recover in the New Year.”
© Investment & Business News 2013