Woeful trading in the department store sector is likely to stall potential buyers of perennial bid target House of Fraser, according to City observers.
Analysts rounded on the renewed takeover speculation surrounding House of Fraser, as a profit warning from Beales revealed a double whammy of declining sales and margins.
Beales reported a like-for-likes sales slump of 8 per cent in the seven-week summer Sale period to the end of July.
Seymour Pierce analyst Rhys Williams predicted Beales will not be alone in failing to hit targets, as recent hot weather stifled the already tough classic womenswear market. He warned that Beatties, HoF and Merchant Retail could also be under 'intense pressure'.
Additionally, in accounts lodged at Companies House, upmarket peer Fenwick posted modest pre-tax profit growth, from£34.3 million to£34.9 million, on sales up 9 per cent to£382 million in the year to January 1.
Evolution analyst Nick Bubb heaped scorn on a HoF/Allders marriage, predicting 'people would run scared' given the disappointing track record of the former and unproven strategy of the latter. Industry sources also rebuffed reports that Tom Hunter was in talks to sell his 6.9 per cent HoF stake.
'Allders has not reported for some time and I would not be surprised if it was having a bad time,' said Bubb. 'Financiers being asked by Minerva/Allders to cough up money might be a bit concerned. I think HoF is going to be around for a while.'
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