Halfords, Next and Debenhams suffer share slides as Deutsche Bank warns on prospects

Retailers are facing the prospect of weakening consumer demand, higher costs and a further shift to online over the next 12 months. 

Figures showed the retail sector suffered at the weekend as footfall nationwide fell nearly 13%.

Halfords share price has slid 5.7% to 344.7p as Deutsche Bank downgraded its stock from hold to sell.

“The company has relatively high operating leverage and is unlikely to have significant scope for cost-savings as it continues to build its customer and service-centric capabilities,” a note from the bank said.

Next, which updates the market tomorrow on Christmas trading, saw its stock value slide 3.7% to 4,798p.

Deutsche Bank cuts its rating to hold from buy although said the fashion bellwether should remain “resilient” in the face of challenging market conditions.

Meanwhile, shares in Debenhams are down 2.7% to 55.85p.

Deutsche Bank downgraded the stock to sell as it argued the department store chain will find it “difficult to grow profits as cost inflation persists”.

However, the bank singled out Primark owner AB Foods, B&M and Dixons Carphone as its top picks for the year.

On B&M, Deutsche said inflation should make it more attractive as a value player.

Dixons Carphone looks “well positioned” for continued profit growth and Primark should benefit from growing its overseas business, the note said.