JJB Sports' winter sale gets a frosty reception

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The word in the City is that JJB Sports is struggling in the run-up to Christmas and as traders picked up the talk they were quick to exit the retailer, sending its stock down 6.75p to 188p.

The word in the City is that JJB Sports is struggling in the run-up to Christmas and as traders picked up the talk they were quick to exit the retailer, sending its stock down 6.75p to 188p. It was Investec Securities that prompted the worry yesterday after it noted that JJB is among the first retailers to launch its winter sale. According to the broker, this means that business is slow at that group.

The broker told its clients yesterday: "JJB is starting its sale today. The shops have been preparing for this for the last few days and this makes JJB one of the first retailers to go on full sale before Christmas and suggests that it is struggling to clear out old stock."

Investec believes that the price reductions and the heavy promotional activity by the group will certainly boost sales in the run-up to Christmas but it fears that the company may struggle to deal with this surge from an operational point of view.

On the replica football kit front, a very important part of JJB's business, the South African broker is convinced that the retailer is facing growing competition and that this will inevitably hurt its profit margins. JJB's main competitor on this front is Sport and Soccer and as a result of the pressure from its rival the retailer has started to vary its prices on replica kit from store to store.

As a result of the profit margin weakness facing JJB and coupled with the weak sales Investec downgraded its earnings profits for this year and next by £3m.

Elsewhere, Television Corp prompted much excitement as its shares roared 12p higher to 109.5p on news that the creator of Big Brother, John de Mol, had raised his stake in the group to 7.1 million shares, or 17.1 per cent. Television Corp is the company behind Robot Wars and Channel 4's cricket coverage and has seen Mr De Mol build up his holding over the past year.

What his plans are is far from clear. Some have suggested that he is keen to table a bid, possibly after acquiring the 15 per cent stake belonging to Terry Bate, Television Corp's former chairman. Mr De Mol certainly has the firepower for such a move but analysts who follow the group are sceptical. They believe the Dutch entrepreneur's involvement is merely as a long-term investor and note that he has recently done well from building stakes in the music group EMI and in Manchester United.

Trading at 18 times earnings, analysts believe that the group's shares are not expensive, especially given plans by networks such as the BBC to spend more money on programmes produced by independents such as Television Corp.

Meanwhile, the FTSE 100 jumped 42.8 points to 4,736.8 after strong gains across the Atlantic. Investors on Wall Street were excited by better-than-expected retail sales figures for November, sendingthe Dow Jones Industrial Average and the Nasdaq Composite higher. BAT missed out on the FTSE 100's gains, falling 8p to 884p, on talk that Citigroup had sold 10 million shares at 893p each on behalf of a client. Elsewhere in the sector, Gallaher rose 5p to 742p while Imperial Tobacco gave up 1p to 1,381p.

Trinity Mirror improved 34p to 639p on reports that CVC Capital, the private equity player, is planning a bid for the newspaper owner. Thus improved 0.5p to 14.75p on vague whispers that a predator is circling the telecoms carrier. Last week Columbia Ventures Corp, a US holding company with investments across a number of industries including telecoms, raised its holding in Thus to 7.1 per cent. Columbia Ventures is now by far the group's biggest shareholder.

Stanley Leisure fell 13p to 474p as the casino operator was downgraded to "hold" from "buy" at Panmure Gordon. The broker said that its move follows a strong performance by the stock over the past month. Avis Europe dropped 2.75p to a new all-time low of 58p amid concerns about trading at the car rental giant. Its shares slumped in October after the company complained of weak sales and the underperformance of its IT restructuring programme.

Shore Capital rose 1.25p to 38.5p on demand for its shares from tracker funds. The stock broker will enter the FTSE All Share on 17 December. BTG, off 0.5p to 88.5p, saw Louise Makin, its chief executive, and finance director Rusi Kathoke each buy 11,000 shares in the technology developer at 88p each.

Radstone Technology ticked 0.5p lower to 291p after Numis Securities downgraded its rating to "reduce" from "add" and slashed its earnings forecasts to take account of the weak US dollar. Radstone generates more than 65 per cent of its sales in the US and Numis estimates that a 1 cent movement in the exchange rate of the dollar is worth £100,000 to Radstone at the operating level.

Market Movers

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↓ HSBC 870p (down 2.5p, 0.3 per cent). Merrill Lynch downgrades to "neutral" from "buy" in wake of last week's trading statement.