General retailers were down over the week as Marks & Spencer posted a profits fall and investors took profits. Marks & Spencer’s lower profits were expected but some analysts were disappointed with what Pali International analyst Nick Bubb called an “underwhelming” accompanying statement.

Despite Marks & Spencer’s share price fall Bubb said they “still look expensive” and recommended switching into Sainsbury’s.

Investec, also advising sell, kept its forecast for the present year unchanged at £450m. Citi, which rates Marks & Spencer a medium-risk hold, said: “While the dividend cut was largely expected, the modestly reduced space, gross margin and cost guidance, and the absence of any earnings upgrade, could weigh on the shares in the wake of recent outperformance.”

Sports group JJB’s shares fell as speculation faded that rival JD Sports Fashion would bid. JJB bolstered its senior management with the appointment of former MFI man  Lawrence Coppock as finance director and Colin Tranter as director of retail and product. Tranter has worked for store groups such as River Island. Peter Williams – who, along with JJB executive chairman Sir David Jones, joined to rescue JJB by means of a CVA – will stand down at the end of this month.

JD was the week’s biggest riser on the back of its strong trading performance and news that it might pursue foreign expansion (Retail Week, last week). On Tuesday, JD confirmed this with the acquisition of 78-store French retailer Chausport. JD paid E10m (£8.8m) for the business, including inherited debt of E2m (£1.8m). JD said the deal brings “the opportunity for future growth by entering a new and sizeable European market”.

Broker Seymour Pierce welcomed the takeover and said: “The acquisition should prove earnings enhancing and highly complementary to JD Sports’ existing business.”

Singer initiated coverage of entertainment group Game with a sell note. The broker said Game’s investment case hinges on its ability to grab market share but observed: “With the peak of the current console cycle now past, the next generation of consoles not scheduled for another couple of years and intensifying competition in pre-owned, the earnings trajectory in the short term is unappealing.”

Mothercare reported a strong year. Underlying pre-tax profit climbed 12.4 per cent to £37.1m in the 52 weeks to March 28 on sales up 6.9 per cent to £723.6m.

Broker Singer advised buying the shares on weakness and noted: “They have flagged that 50 per cent of UK leases are up for renewal over the next three years, which will have a huge bearing on the group’s ability to make cost savings.”n

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