Warm winter brings extra chill for German retailers

Fri Jan 6, 2012 11:51am EST

* German temperatures warmer than normal in January

* Winter coat prices slashed by 18 to 30 percent

* De-icer stockpiles hardly touched

By Maria Sheahan

FRANKFURT, Jan 6 (Reuters) - European retailers, already battling weak consumer demand, look set to find their shelves laden with scarves, coats, toboggans and de-icers due to an unseasonably mild winter.

Toboggans, a hot commodity during last year's snowy winter, are shelf warmers this year, Germany's retailers' association HDE said on Friday. It also said sales of winter clothes and ski equipment were so far falling short of year-earlier levels.

"Retailers responded by offering discounts unusually early," a spokesman for HDE said. He said many retailers cut prices before Christmas, which they usually do after the holidays.

Lots of stores on Frankfurt's busiest shopping street offered discounts on winter coats and boots in the run-up to the Christmas holidays to try to loosen shoppers' purse strings.

Multi-brand retailers such as Peek & Cloppenburg and AppelrathCuepper had rows of winter coats on sale, including Hugo Boss woollen coats and classic Burberry trenches with prices cut by anywhere from 18 to 30 percent.

BLAME IT ON THE WEATHERMAN

Average temperatures in Germany in December were 3.8 degrees centigrade, and the first few days of January were even warmer at 6 degrees.

"That is 6 degrees more than is normal for January," a spokesman for the German national weather service said.

And while there is still a lot of winter ahead, no cold spell is expected in the next couple of weeks, he said.

Road salts maker K+S said its stockpiles had hardly been touched so far this winter, compared with the past two years, which saw unusually harsh weather.

In a normal winter, K+S sells about 2.6-2.7 million tonnes of de-icing salt, but last year that figure jumped to more than 4 million tonnes and the company was forced to ship salt from Chile to meet demand in snowy Europe.

Some retailers said the upside to the warm weather was that consumers were more inclined to go out shopping when the air was not frigid and the ground was ice-free.

"We have not suffered from the mild winter," said a spokesman for fashion retailer C&A, which generates annual sales of about 3 billion euros ($3.8 billion) in Germany.

German DIY stores operator Praktiker, which published its trading statement on Thursday, said most Germans had already stocked up on road salts before winter started, having learned from last year when stores across the country sold out of salts and snow shovels.

Frankfurt airport operator Fraport, which in September invested 20 million euros in snow-clearing equipment and training for staff, said it was still hopeful its new kit would be put to the test this winter.

"The winter's not over yet," a spokesman said on Friday. "There's sure to be some cold days to come."

ECONOMIC CHILL

Retailers traditionally rely heavily on Christmas and January sales to boost profits, but the bleak economic climate in Europe has made trading tough and many stores have had to cut prices aggressively to attract shoppers.

In Britain, Simon Wolfson, head of Britain's No.2 fashion chain Next, told Reuters on Wednesday the discounting at rivals was greater than he had seen before.

Profit margins and the outlook for 2012 will be in focus when a raft of other British retailers report Christmas sales figures next week, including Tesco and Marks & Spencer .

Metro, the world's No. 4 retailer, rattled the sector by saying the euro zone crisis was affecting Christmas trade, but statements from others so far have shown that German shoppers were out in force over the holidays.

Metro said on Friday it was more diffcult to sell winter wear at its Kaufhof department stores, but said discounts could offset the impact. Its 2011 sales figures are due on Jan. 17.

Snow-free city centres in Germany may have put people off buying skiwear for everyday use, but those with ski trips booked can still make use of jackets and snow shoes.

After a slow start to the snowfall in the mountains, with German media carrying photos of green grassy ski slopes, Europe's ski resorts have since had some big dumps of snow.

"Winter bookings are good. There's snow on the mountains and in any case, there's snow cannons too," a spokesman for tour operator Thomas Cook Germany said.

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