The downward pressure on retail share prices lightened a little following last week’s swingeing interest rate cut but, the scale of the industry’s difficulties were reflected in appalling British Retail Consortium sales figures.
Retailers’ total sales fell 0.1 per cent in October – the first such fall since 2005, when sales were down purely because of Easter. Broker Citi observed: “Anecdotal evidence suggests weakening October exit trends implying a further slowdown as we head into the peak trading period.”
Tycoon Sir Philip Green scooped up a 28 per cent stake in menswear group Moss Bros from troubled investor Baugur. The purchase was via Green’s family investment vehicle Warbeck, at 24.95p a share. Green is considering whether to bid for the whole of Moss Bros.
Broker Bernstein was relaxed about Tesco’s laggardly showing in the latest TNS data. The broker said Tesco’s underperformance relative to rivals reflected the launch of the Discounter range but should have little impact on earnings growth.
Better-than-expected results from Sainsbury’s did little to change Panmure Gordon’s cautious view of the grocer. The broker retained its hold advice and said: “We don’t think that Sainsbury’s is as well placed as these numbers imply. Meanwhile, Sainsbury’s valuation is high, it is in a capital intensive industry and has no long-term growth strategy.”
Singer Capital Markets was encouraged by homewares group Dunelm’s AGM update, which revealed sales up 4.3 per cent in the 18 weeks to November 1 but down 3.9 per cent like-for-like. The broker said the performance partly reflected “a focus on value for money including more special buys”.
Signet’s disappointing third- quarter sales update was an indication of the shape of things to come, Citi believed. The broker said: “Jewellery is well established as a lead indicator for the broader discretionary spending arena. The like-for-like slowdown in October on both sides of the Atlantic adds further weight to trends slowing across non-food retail in the final quarter of 2008 and in 2009.”
Analyst John Stevenson, who has just moved from Shore Capital to KBC Peel Hunt, initiated coverage of Next with a hold. He said: “Against its peer group, we believe Next will prove to be a relative winner, not just a function of store standards and ranging but reflecting a lower level of operational gearing, strong cash generation and excellent return on capital employed.”
An array of results and updates next week will give perspective on a range of markets. E-tailer Asos, luxury group Burberry and motor accessories specialist Halfords are among those reporting.
Tycoon Sir Philip Green scooped up a 28 per cent stake in menswear group Moss Bros from troubled investor Baugur. The purchase was via Green’s family investment vehicle Warbeck, at 24.95p a share. Green is considering whether to bid for the whole of Moss Bros.
Broker Bernstein was relaxed about Tesco’s laggardly showing in the latest TNS data. The broker said Tesco’s underperformance relative to rivals reflected the launch of the Discounter range but should have little impact on earnings growth.
Better-than-expected results from Sainsbury’s did little to change Panmure Gordon’s cautious view of the grocer. The broker retained its hold advice and said: “We don’t think that Sainsbury’s is as well placed as these numbers imply. Meanwhile, Sainsbury’s valuation is high, it is in a capital intensive industry and has no long-term growth strategy.”
Singer Capital Markets was encouraged by homewares group Dunelm’s AGM update, which revealed sales up 4.3 per cent in the 18 weeks to November 1 but down 3.9 per cent like-for-like. The broker said the performance partly reflected “a focus on value for money including more special buys”.
Signet’s disappointing third- quarter sales update was an indication of the shape of things to come, Citi believed. The broker said: “Jewellery is well established as a lead indicator for the broader discretionary spending arena. The like-for-like slowdown in October on both sides of the Atlantic adds further weight to trends slowing across non-food retail in the final quarter of 2008 and in 2009.”
Analyst John Stevenson, who has just moved from Shore Capital to KBC Peel Hunt, initiated coverage of Next with a hold. He said: “Against its peer group, we believe Next will prove to be a relative winner, not just a function of store standards and ranging but reflecting a lower level of operational gearing, strong cash generation and excellent return on capital employed.”
An array of results and updates next week will give perspective on a range of markets. E-tailer Asos, luxury group Burberry and motor accessories specialist Halfords are among those reporting.
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