News this week that independent retailer Flannels is to close 3 stores is yet another example of the distortion of this recession. While London has been buoyed along by a week pound and international money, outside of London those designer clothes just haven’t been flying off the shelves. Flannels is unfortunate not to have any branches in London to capitalise on this factor. Flannels in Manchester, the city in which it was founded, and Flannels in Liverpool and Birmingham are to close. All these have seen massive competition from the likes of Harvey Nichols and Selfridges opening branches and competing for a smaller and smaller pool of shoppers.
A further example of the two contrasting sides of this recession is Hermes and Max Mara. Hermes, home of the £5000 handbag, saw a 10% rise in profits in the third quarter on last year, while Max Mara, home to the £500 coat, saw profits plunge by a massive 54.8%. It’s the mid market that is suffering, the aspirational person in the street who can no longer to justify a frivolous purchase. Brands are reporting strong sales in London but a complete drop off elsewhere. London is a bubble of the super wealthy who are cushioned and continue to spend like before.