Stores of all types were down over the week but a little less than the market as a whole, which took fright at the emergency bailout of Ireland.
Broker Singer fears that the economic outlook in the UK remains troubled for retailers. Singer noted: “The pressures being exerted on retail expenditure are not being manifested evenly. At this stage, and in the run-up to peak, pressures appear stronger at the lower end of the middle market and mass market and in regions with high state employment. With little capacity withdrawal versus 2008 and 2009, competition is intensifying.”
The big company story was Tesco’s analyst trip to Asia (see p11) but even the top grocer’s shares edged down.
Signet was the week’s best performer. The Anglo-American jeweller’s third-quarter showing pleased UBS, which said it had beaten expectations and consensus estimates are likely to rise as a result. The broker said Signet shares trade at a 10% premium to UK peers, “reflecting above average growth potential from the US”.
Fashion group Next bought £36.5m of its 5.25% bond due in September 2013 for cancellation. The retailer has so far purchased 27.4% of the initial issue and £217.8m remains in issue. Broker Seymour Pierce rates Next a buy and said: “We believe the success of its brand revitalisation, the strength of the Next Directory and continued investment in the business will deliver ongoing growth and improving returns despite the lacklustre consumer demand environment.”
Greetings specialist Clinton Cards reported a like-for-like sales fall of 3.3% at its eponymous chain and an increase of 0.7% at its UK Birthdays stores in the 16 weeks to November 21. However, turnover at Birthdays in the crisis-hit Republic of Ireland plummeted 14%, causing group like-for-likes to slip 3% in the period. A new store design is “progressing well” and the business is “well prepared” for Christmas.
Sports retailer JJB Sports’ shares took a hit on continued worries about its debt position and after arch-rival Sports Direct launched a Sale. JJB is in the midst of a turnaround programme led by Keith Jones, who joined in March from electricals group Dixons Retail.
Dixons was scheduled to publish interim results after Retail Week went to press. The retailer, owner of Currys and PC World, was expected to launch service brand Knowhow, which will replace the existing TechGuys operation. The service is designed to enable customers to get the best out of their technology.