The city’s retail sector has been hit by national issues, but is trying to be upbeat. Alex Turner reports

CHRISTMAS may have eventually brought some relief to the high street, but the chill winds of January reality have resulted in several retailers reorganising their offer or pulling out of Liverpool completely.

HMV’s store, in Bold Street, closed on Sunday with staff given just four days’ notice. It was among the first of 40 that the music retailer is planning to shut this year as it looks to cut stores in places where it has more than one outlet.

It came just days after fashion store GIVe closed its Liverpool One store, while give.co.uk was also “closed for maintenance”.

Liverpool-born retailer George Davies – the man behind Next, George and Per Una – launched GIVe in October, 2009, aimed at the upper end of the high street market.

Eight stores were opened, but its flagship Regent Street store closed almost exactly a year later.

Now only three GIVe stores remain open, with reports suggesting they will be rebranded and repositioned as childrenswear stores.

GIVe’s departure from Liverpool One follows that of Paradise Street stores Oakley, Suits You and Hedkandi, while Bench will shortly be relocating to Bold Street. Clothes store Esprit is also looking to leave the Liverpool One development.

Ged Gibbons, chief executive of City Central BID, the business improvement district which covers the key retail areas outside of Liverpool One, believes that while the retail sector is “turbulent”, there is not yet cause for alarm.

“When it becomes a Liverpool-specific issue, then we will need to worry,” he said. “There’s always movement and churn in retail.

“Liverpool is fifth in Experian’s retail rankings – the view of the retailers is we want to stay here and we want to chase Manchester.

“There’s now an air of confidence amid this air of turmoil.”

Mr Gibbons points to the progress made in 2010 by Land Securities’ Liverpool centres in reviving flagging fortunes.

He said: “This time last year, there were 40% voids in Clayton Square. That’s now almost fully let and St John’s is 90%-plus let.”

Land Securities leased more than 93,000 sq ft of retail space to new tenants, including Aldi, PoundMart, Clas Ohlson and Mothercare.

Liverpool One also has “several new store openings planned for the very near future”.

However, studies by retail analysts Verdict Research showed the boost from the opening of Liverpool One created a short-lived blip in the “success” of the city centre.

Its annual report examines more than 700 cities and towns for criteria such as affluence, vacancy rates and the strength of its retail offer to produce a top 100 ranking.

Although Liverpool shot up from 18th in 2007 to 6th a year later – when the £1bn shopping scheme opened – it fell back down to 15th in 2009.

Verdict’s latest analysis, published last week, ranks the city in 13th place, behind Norwich and Milton Keynes.

Matt Piner, senior retail analyst at Verdict said: “One of the key reasons for the success of a town centre is the diversity of its shops.

“This is why cities like Edinburgh and Norwich are in the top ten – taking seventh and ninth place – at the expense of bigger places like Liverpool.

“It’s not just about size, success has been about working hard to keep vacancy rates low and keeping the retail space highly concentrated.

“This has encouraged footfall and brought in the big brands and multiples which in turn has increased footfall further.”

In terms of Christmas trading, Mr Piner believes shoppers reined in their spending, wary of how their personal finances would be affected in the coming months.

“With the prospect of job losses now very real for many public sector workers, taxes to rise and uncertainty around interest rates and inflation, the snow was the excuse many shoppers needed to be more restrained with their spending,” he added.

“Christmas has not been a disaster, but neither has it been the last hurrah many retailers had hoped for.”

The Office for National Statistics reported that December’s sales volumes fell 0.8%, but David Grundy, managing partner of Grant Thornton North West, expects an improvement in January’s figures.

He said: “The figures are not especially encouraging, but it’s important not to be too gloomy.

“We heard reports that consumers were out in force in the post-Christmas sales, meaning that spending should rebound in January.

“Overall, it looks like the retail sector will have contributed to the likely slowdown in overall GDP growth in the final quarter of last year. People will be concerned about the increasing tax burden and higher living costs, in particular with food and petrol, but this is a retail nation and Liverpool and Manchester’s retail centres are not about to turn into ghost towns any time soon.”

Mark Hudson, the leader of PricewaterhouseCoopers UK Retail and Consumer team, is also cautiously optimistic about the year ahead.

“Everybody that we are talking to says it’s going to be horrible, but I think that some of that is actually managing expectations,” he said.

“It’s pretty clear that 2011 will be a challenging year. However, we think that actually there’s probably been a lot of getting the bad news out first, so we are hoping for some surprises on the upside.”