Broker Panmure Gordon has reinitiated coverage of a large number of retail stocks at a time of “irreversible structural change” for the industry.

The broker highlighted the impact of social media and growth of multichannel retail as among the factors shaping retail and said there are “huge implications for valuations”.

Panmure analyst Philip Dorgan observed: “In the brave new world, losers lose everything. Winners can win on a much larger scale than had previously been expected.

“Therefore, some valuations look uncomfortably high and others far too low, with the truth potentially being that the former remain good value while the latter are still too expensive.”

The broker’s strongest buy recommendations are Kingfisher and Tesco among the big-cap retailers and Dixons, Mulberry and WHSmith among small and mid-cap stocks.

Although some analysts are sceptical about Dixons, Dorgan said: “Dixons has substantial risk from its debt repayment requirements, leasehold store structure and the ongoing threat online. However, we think that the tide is turning in favour of the multichannel specialist operators.”