Consumer

Andrea Felsted is a Bloomberg Gadfly columnist covering the consumer and retail industries. She previously worked at the Financial Times.

The Cyber Monday purchases are coming thick and fast, and it's not just consumers who are reaching for their credit cards.

JD Sports Fashion Plc said on Monday it had acquired Go Outdoors for 128.3 million pounds ($159 million), including debt. Dunelm Group Plc said it picked up the assets of online retailer WorldStores Ltd. for 8.5 million pounds. Meanwhile, fashion chains Oasis, Coast and Warehouse are being put up for sale by the administrators of Icelandic bank Kaupthing, according to Reuters.

The spate of activity underlines the polarization that is going on in the retail business, and is set to continue. The strong, such as JD -- which has overtaken Sports Direct International Plc as Britain's most valuable sporting goods retailer -- and Dunelm, Britain's biggest home furnishings chain, are getting stronger.

Home Front Foot
Dunelm is consolidating its position as Britain's biggest home furnishings retailer
Source: Verdict

In contrast, weaker players are suffering. Sports Direct and its founder and chief executive, Mike Ashley, have endured a torrid year that included a string of profit warnings, management departures and a probe into the company’s working practices. On Monday, the Financial Reporting Council said it would investigate reporting practices at Sports Direct after the company didn't disclose an arrangement with Barlin Delivery Ltd, owned by Ashley's brother, as a related party in its financial statements.

Even so, JD has once again outmaneuvered Sports Direct. Ashley has made no secret of his wish to do deals and could have easily afforded to pay up for Go Outdoors, as Sports Direct has little debt -- less than 100 million pounds. The high price means he would probably have given it a miss, even though that should strengthen his rival's position in outdoor activities gear.

Go Figure
JD Sports looks like it's paying a full price for Go Outdoors
Source: Company Reports, Bloomberg Intelligence

As for Dunelm, it isn’t paying much for the WorldStores business, and should be able to easily plug its offerings into its existing supply chain. 

As some weaker players find a new home, others haven’t just had a tough time of it -- they haven't made it at all. High street casualties this year have included BHS Ltd. and the U.K. arm of American Apparel LLC.

Expect the gulf between the weak and the strong in retail to become even more extreme this year. True, Christmas should be solid -- even in the most difficult times, consumers treat themselves over the holidays. But higher food and clothing prices could squeeze shoppers' incomes next year, creating a tougher environment for retailers.

Still Shopping
Britons' spending has survived Brexit, but that could change if earnings are squeezed in 2017
Source: Confederation of British Industry

Stores also face a sourcing crunch as the weaker pound raises the cost of dollar-denominated Asian imports. The reported sale of the Oasis, Coast and Warehouse chains underlines just how difficult fashion is right now, even as a helpful blast of cold weather's poised to lift sales of winter gear.

The purchases are on track to continue, even when Cyber Monday is a distant memory.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Andrea Felsted in London at afelsted@bloomberg.net

To contact the editor responsible for this story:
Jennifer Ryan at jryan13@bloomberg.net