A second English lockdown is due to start on Thursday 5 November, resulting in all non-essential store-based retailers having to close stores again for a month until 3 December. Stores are already closed in Wales, with its 17 day firebreak due to end on 9 November. In Scotland and Northern Ireland, most Retail is currently open. Hit to profits from closure could be higher for some the second time round, given shutdown coincides with the critical, much more profitable pre-Christmas trading period. However, the industry is better prepared operationally for a switch to online with social distancing already in place in distribution centres. We do not expect demand to collapse in the initial weeks as seen in the first lockdown; we expect consumers to adapt more seamlessly having been through the experience once already. We are looking for demand to fall off between 40% & 60% with higher basket size partially mitigating lower footfall. The extension of the furlough scheme for another month will be welcomed as it is more generous than the proposed Job Support Scheme. It should help reduce cash burn to below the levels seen last time. The cost of switching to online should be lower (having incurred some of these costs last time) and most retailers are likely to have a greater proportion of their portfolio open, with Scotland and many other countries still allowing stores to open. Investor should focus on liquidity, cash burn and financial headroom. Most retailers should be just passed their peak working capital, though another working capital unwind could prove unhelpful. Balance sheets are typically in better shape with most companies having extended debt facilities and/or already accessed the capital market the first time round. Christmas is in danger of being a write-off for those retailers more reliant on trade in the 6 week run-up to Christmas, with no certainty non-essential retailers will be able to reopen on December 4th. Given the more ‘last minute’ nature of their Christmas trading patterns, we believe Card Factory, TheWorks, and WH Smith could be more challenged in processing volumes, though we see this already more than reflected in the depressed valuations of the first two names. We expect clothing retailers to continue to have a tough time, with Superdry notably vulnerable, in our view, given its historic trading bias to Christmas. Beneficiaries of lockdown are likely to be essential retailers, such as B&M, and the online retailers, whose business models are unaffected. We would also expect retailers like Watches of Switzerland and JD Sports to be relative winners given the strong demand for their respective product categories.