He might be better known for his experience as a policeman than as a City grandee, but Sports Direct’s appointment of former West Yorkshire chief constable Keith Hellawell as chairman led to it being the biggest riser among the retail stocks last week.
Hellawell has experience of guiding another company through an investigation by the Serious Fraud Office, which should help as Sports Direct deals with its own probe.
Generally it was a flat week for retail shares, as positive sales data from the CBI was outweighed by a slight fall-back in GfK’s Consumer Confidence Index.
Home shopping group Findel announced the appointment of a new chief executive on Tuesday. Chief operating officer Philip Maudsley will replace Patrick Jolly in the hotseat, but the news failed to impress the City. The shares fell over 5% on Tuesday, when the news was announced, and a further 6% in early trading on Wednesday.
Tesco, which gives a trading update next Tuesday, upped the ante in the supermarket Christmas price wars with an unscheduled mailing of vouchers to Clubcard members. Buy, said Oriel Securities, which argued the move will pile pressure on Sainsbury’s and Morrisons, where it warns “the momentum is ebbing away.”
French Connection was the week’s biggest faller, with shares down nearly 12% after its third-quarter update last week revealed trading was still challenging and margins had fallen across all its markets. Hold, said Investec, which thinks the company could have a decent Christmas against weak comparatives and believes further rationalisation of its structure could be on the agenda.
Dunelm found favour with broker Altium, which described the bargain homewares retailer as a “compelling growth story”. Initiating coverage, analyst Dave Stoddart said the format has potential for much greater roll-out and was also impressed by how cash-rich and cash-generative the company is.
Buy Asos, said Singer, adding that the IPO of Italian etailer Yoox at the upper end of the offer range had positive connotations for the UK-based company. “The IPO of another high-growth online fashion retailer may raise the profile of the space more generally,” said analyst Matthew McEachran.
HMV reports interim results next week and broker Numis likes the look of the shares. Despite being “wary of the longer term issues” it expects first-half losses to reduce to £26m and thinks UK like-for-likes could be better than expected.
Kingfisher was due to update on trading yesterday. Singer, which rates the shares fair value, said it expected news to be strong, but with a good like-for-like performance in the UK likely to be countered by a weaker, but improving, sales performance in France.
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