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The proposed CVA of Austin Reed has been a long time coming. The pressures of the post-Lehmans retail market have been tough on the company. The plan is to shut 30 stores in 6 months – 9 trade as Austin Reed and 22 as Country Casuals, the womenswear brand it acquired along with Viyella in 2009. Meanwhile, the plan is to renegotiate rents on a further 35.

There have been a great many “rescues” and “restructures” since 2008 and there was a sharp fall more recently as the retail recovery pushed the wolf from the door. As I have discussed many times here, the recovery is over. I think 2015 will at very best be a significant step backwards but much more likely, will be the most challenging we have seen for generations. We have been seeing seismic shifts in the structure of UK retailing but for a variety of reasons, the full impact of these shifts is only now beginning to emerge. Overcapacity and soft demand will be the key drivers of a strongly deflationary retail landscape this year and going forwards.

My point here is less about Austin Reed per se, but a more broad general one. Restructuring based on the here and now might help in the very short term but will quickly prove inadequate. It must be done on the basis of a very clear view of what “fit for purpose” will look like in say 3-5 years time. I am expecting a material increase in the number of  restructures and quite a number will be repeat visitors to the retail operating theatre.. They don’t need cosmetic surgery but radical change to their models, defined by the future landscape and not the present version.

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The deal announced today to sell Phase Eight will have attracted lots of attention from a number of quarters. The valuation of £300m for a business posting EBITDA of £24m in the year to February 2013 looks generous. This is not to say Phase Eight is not a good retail brand – it certainly is, and has a solid management team.  The main focus of interest in my view is a) what it says about the acquirer’s view of short to medium term trading prospects and b) that there maybe other deals to be done by PE owners of retail assets at maybe better prices than previously thought.

The purchasers of Phase Eight are Foschini, the South African fashion business, who are acquiring 85% while the management team will retain the remaining 15%. They clearly have great faith in Phase Eight’s international potential, given its relatively mature UK business (107 stores and 203 concessions) they will presumably buying overseas growth and particularly the potential to expand in Africa. Younger fashion brands from Europe like Zara, H&M, Top Shop and Mango are gaining traction there but they are all young brands. An older more mature brand like Phase Eight might be more challenging.

The deal is great news for TowerBrook Capital, the PE house which bought Phase Eight for £80m in 2008. There is a raft of PE that owns fashion brands and must be getting anxious about the unfolding economy and prospects for transactions. Timing is everything and given the short term economic outlook, there may not be a bandwagon to jump on.

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Having already discussed this topic at length, I was planning to not comment any more but my hand has been forced. Hearing Marc Bolland, CEO of M&S, today talk about it as a new shopping trend consumers want seems rather absurd. If you ask people whether they would like to pay less for what they are going to buy, you’ll get the blindingly obvious answer “yes”. How many UK consumers have in the past been in America to shop that way?  Very very few.

Black Friday and discounting in the run up to Christmas is a proxy for the winners and also rans. Those retailers who managed to stick to their guns and maintain full prices have predominantly posted much stronger numbers than those that have not. This will become even more clear in several month’s time when the audited results begin to seep through and we get to see the margin implications.

Pandora’s box is now open and I’m sure there will be a repeat next year: the less strong, more pressured players will feel forced to join the discounters but those still strong enough will be 100% right to resist. The polarised performance numbers underline that this is not a trend driven by consumers: core customers of the strongest are still buying at full price. This is a lemming-like, if you can’t beat them join them mentality which doesn’t merely dilute performance but brand equity and trust.

This first week of the New Year will set the tone for the following 51. Earlier in the week we saw Asda announce a £300m investment in price cuts. Sainsbury’s responded with a £150m raft of price cuts. Meanwhile on the same day, we saw the announcement of excellent trading numbers from Waitrose. Later in the week saw a further example of an increasingly polarised market. Awful numbers from M&S show that its low margin food business was just about positive, while GM (dominated by clothing) was down a huge 5.8% LFL. Alongside, there was Ted Baker reporting a 22.8% increase. The market is becoming increasingly less democratic and the gap between the winners and also rans is widening progressively.

Then there was Tesco. It announced a raft of initiatives and in contrast to the previous regime, this looks like a plan held together with cohesive, complementary thinking. The business has not yet pushed the price button: the key step I think it must inevitably take on order to fully regain control over its own competitive agenda. The phoney price war is intensifying but this is still the beginning.

The key headline warnings I discussed pre-Christmas are now being born out. Christmas 2014 was generally a disappointing trading period, partly because the consumer recovery ran out of steam earlier and partly because much of the industry blindly jumped on the Black Friday and discounting bandwagon without understanding the consequences. The real impact will be seen in due course when results (and margins) are announced several months down the line. Meanwhile, poor strategic judgement of this kind will be increasingly life threatening.

What is going in retail? The industry is looking increasingly stressed. In the run-in to Christmas I described retail as being in panic mode, and the weeks since have reinforced that view. The body language and behaviour of so many in the industry betrays anxiety and uncertainty.

Black Friday has merely been the most eye-catching discount day during a year that has become progressively price-driven. Online retailers tell me they struggle to meet their revenue targets without running a promotion of some kind – what can they say to their customers if it is not tied to a price offer? Physical stores are not too different. Windows are increasingly plastered with sale offers and 2014 was by the most price-driven year in food and non-food I can ever recall.

An increasing number of retailers are feeling pressured and are less confident about their ability to reach out to customers with a compelling offer without adding the drug of price. And this is a vicious circle because the more you promote the more reluctant are your customers to buy at full price. A growing minority have tangible added value they can communicate through windows, on the sales floor and on websites. Social media and Big Data are positioned as hugely significant. Maybe they are but I mostly see retailers not really knowing what to say to their customers unless it’s about price. It is the message, not the medium, that is key.