Good news from store groups as diverse as Tesco and Game was counterbalanced by horror stories from JJB Sports and Hardy Amies. Sentiment was also overshadowed by fears that Marks & Spencer, which was scheduled to report second-quarter numbers as Retail Week went to press, would send out new shockwaves.
Pali International analyst Nick Bubb warned: “The problems of securing debt and credit and the collapse in the housing market, together with rising unemployment, is going to hurt consumer confidence and financial security.
“This is a very bad time for anybody to have a lot of debt and, with an ugly autumn trading period coming up on the high street, we are bearish about general retailers.”
Tesco’s shares climbed after first-half profits rose and chief executive Sir Terry Leahy made bullish comments about its inherent strengths during tough times. Blue Oar said: “They highlight that they are well placed to cope with the challenges ahead, but also to grasp the growth opportunities.” ING was also encouraged, noting: “Tesco reassured in terms of margin resilience – clear evidence that it has benefited from ongoing productivity and cost-control initiatives.”
Despite its difficulties, camera specialist Jessops extended its banking facilities until December 2011 and its deferred financing fee was extended and cut from£7 million to£5 million. In return, Jessops is granting banker HSBC warrants over another 5 per cent of its shares. Its like-for-likes fell 6.4 per cent in the 51 weeks to September 21.
Fashion e-tailer Asos bucked the downturn to notch up a 104 per cent sales advance for the six months to September 30. Investec, advising buy, said: “The company remains confident in the e-tail dynamics and continues to view its customer base as more resilient to the economic slowdown.” Numis also advised buy, “recognising the vast growth potential as the business becomes the one-stop shop for online apparel”.
AIM-listed Hardy Amies decided on Wednesday to file a notice of intention to appoint an administrator after failing to secure extra funding. The retailer’s shares were suspended last week after existing shareholder Arev Brands said it was unable to provide the cash the retailer needed.
More insights on high street conditions will come next week, when home shopping group N Brown, grocer Sainsbury’s and general merchandiser WHSmith all post updates.
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