London failed to take much of a lead from New York – the market here made only a modest gain over the week, despite a 180-point surge on the Dow on Monday as investors in the US warmed to President Obama’s latest recovery initiative.
In the retail world, it was the allegedly presidential style of Marks & Spencer boss Sir Stuart Rose that was worrying some investors. The National Association of Pension Funds was the latest reported to have voiced concern over Rose’s executive chairmanship. M&S’s shares shrugged off the controversy and rose over the week.
Fresh from being named Retail Leader of the Year at the Oracle Retail Week Awards, Sainsbury’s boss Justin King impressed with a like-for-like uplift of 6.2 per cent in the fourth quarter. Panmure Gordon hailed an “excellent” performance and increased its target price, but stuck to its sell stance. The broker explained: “Despite inflation being stronger for longer, we still expect food retailers to continue to underperform general retailers.”
Hold French Connection advised Numis after the retailer posted a full-year loss and passed on a final dividend. The broker observed: “Seeking to conserve cash through the downturn while engineering a design-led recovery represents a sensible strategy that leaves French Connection well placed in the medium term.”
JJB Sports was on a knife-edge as Retail Week went to press. A standstill agreement with lenders had expired but talks were still going on about a sale of JJB’s fitness clubs, which would be a crucial step in any turnaround.
Topps Tiles said its sales performance in the first half remained similar to that reported for the first 13 weeks, when like-for-likes were down 18.1 per cent. Buy, advised Singer. The broker said there had been no surprises in the update and left its forecasts unchanged.
Quirky fashion group Ted Baker reported a full-year profits fall but still beat Investec’s forecast. The broker said Ted Baker’s longer-term prospects merited a place on its buy list but noted: “We shall await evidence of trading, and the balance of sales progress and gross margin performance within this, before reassessing our forecasts.”
Jessops, which is being turned around by chairman David Adams, was the week’s biggest riser after issuing a reassuring trading update. It said that talks with bank HSBC are “ongoing” and it would be able to pay rent due this week.
Department store group Beales updated that its first-quarter sales were “better than the industry average” and progress was being made on own-bought margins.