Poor festive trade is the final straw for high street retailers

London: Poor sales in the run-up to Christmas have been the final nail in the coffin for struggling chains such as lingerie retailer La Senza, Millets-owner Blacks Leisure and the nostalgia gift retailer Past Times.

KPMG, which is working on an emergency rescue for La Senza, announced that more than 80 of its stores would close, which is likely to result in many hundreds of layoffs.

A wave of store closures and job losses at Blacks and Past Times is expected to follow. Between them, the three chains employ more than 7,000 people. Jonathan De Mello, head of retail consultancy CBRE, said 30,000 to 40,000 retail jobs could disappear over the next 18 months as a "retail recession" chews up the high street.

"It might not be an official recession, but we are in a retail recession," he said. "Retailers are experiencing falling sales and profits."

A taste of the carnage to come was seen last week when more than 1,800 store staff were made redundant at Bradford-based shoe group Barratts Priceless and Scottish fashion chain D2. Another 400 jobs also hang in the balance at toy chain Hawkin's Bazaar, which went into administration on Friday.

There will be an anxious wait to see how HMV fares over the crucial Christmas trading period, which is when it makes all its profits. In November, the troubled entertainment chain warned the tough trading conditions "cast significant doubt on the group's ability to continue as a going concern in the future".

Jamie Constable, chief executive of restructuring firm RCapital, said retail casualties this year could top those of 2008. A total of 349 retail companies in England and Wales went bust that year, including Woolworths, with the loss of more than 20,000 jobs.

Constable said: "High-street retailers are facing rent rises and wage inflation which is coupled with a drop in sales...for many retailers, the numbers simply don't add up." He added that the extra burden of VAT bills in the first quarter of 2012 could be the "final straw" that tipped some firms into failure.

The internet challenge

The traditional high-street store model has been undermined by the growth of the internet and huge out-of-town supermarkets selling everything from groceries to sofas, clothing, shoes and CDs.

Huge sales volumes enable the supermarkets to offer the low prices that specialists such as Mothercare, La Senza, HMV and Game struggle to match.

Robin Knight, partner at restructuring firm Zolfo Cooper, predicted tomorrow's high streets would follow a "Tesco and Chanel" model, and only "power" brands that excite consumers like Apple and Superdry cut it on the high street.