DIY group Kingfisher was one of the biggest losers, as fears about the UK housing market sent its share price to a five-year low.
Electricals group DSGi was punished after the City took fright at its pre-close update. A£20 million profit hit at PC World and poor trading in Italy outweighed a strengthened performance at DSGi. Pali International downgraded the retailer to neutral, while Charles Stanley rated it a weak hold.
However, department store group Debenhams’ full-year results were encouraging after a disappointing year. Panmure Gordon welcomed improved trading and maintained its buy stance. The broker said: “There is a good turnaround story here, although it is not without risk, given the debt position.”
Sports retailers were the centre of attention again, as JJB Sports snapped up a 10 per cent stake in Umbro as Nike made an offer for the football kit supplier. Sports Direct, which already has a 15 per cent stake in Umbro, and JJB appeared determined to ensure their interests are taken into account before allowing any takeover to proceed.
Deutsche Bank and Kaupthing issued buy notes on Marks & Spencer ahead of interim results at the start of next month. Deutsche expects pre-tax profits of£442 million – slightly below consensus – but was confident of strong profit growth in the second half, when there should be less disruption from store modernisation. Kaupthing thought M&S’s Simply Food chain “could make a step-change by taking surplus trading space from Woolworths” and that “M&S has both self-help and emerging expansion to fuel future growth”.
AIM-listed e-tailer Asos rocketed to a record high on the back of speculation that a bid is on the cards – possibly from H&M or Tesco. Seymour Pierce said that an offer from either should not be ruled out entirely, but that the excitement could simply be based on gossip, rather than fact.
Entertainment group Game will have to wait a little longer than expected to find out whether there are any problems with its acquisition of rival retailer Gamestation. The Competition Commission expects to release provisional findings in the week beginning November 12.
Variety retailer Instore cut first-half losses from£11.6 million to£5.3 million. Instore chief executive Peter Burdon was confident any changes would improve long-term performance, although margin will be flat in the second half because lower margin products, such as food and toiletries, are being introduced. Seymour Pierce rated Instore “an unexcited hold”.
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