Merger mania in High Street

THE High Street faces a huge shake-up with a series of acquisitions and mergers among fashion retailers, according to a new report.

Discount retailers - the fastest-growing sector of the clothing market for the past decade and now worth £6.3bn a year - will lead the march as they struggle to maintain their growth momentum.

Budget chain Matalan has already been mentioned repeatedly as a takeover target. US giant Wal-Mart, which last week raised £1bn by selling corporate bonds, has not ruled out its interest.

According to the report by retail research group Verdict, the 'value' sector, including TK Maxx, Peacocks, Primark and Asda's George, will grow by 12.8% in 2004.

'There is going to be a battle royal in clothing,' said Verdict chairman Richard Hyman. 'There is not enough growth in the value market to drive the profits they have been accustomed to - therefore there will be a lot of corporate activity in the next few years.'