Jim Armitage: Share sale by Sports Direct bosses doesn't mean a bleak winter for retailers
Jim Armitage is the City editor of The Independent and London Evening Standard group of newspapers. He has been a reporter and editor for more than 20 years and was recently shortlisted for the Press Gazette financial journalist of the year and The Society of Editors financial journalist of the year awards. He contributes news, investigative reports and comment to the Independent titles plus a daily column in the Evening Standard.
Friday 25 October 2013
Outlook Forget the run up to Christmas. For the founder-bosses at Sports Direct and Asos, 'tis the season to be selling. Between them, they've offloaded more than £150m of personal shares in their businesses in the past two days. That leads to the inevitable question – do they know something we don't? Are we heading for another bleak winter on the high street?
It's easy for us mere mortals to get directors' sales out of proportion. While this latest flurry is huge by any ordinary human measure, it's relatively small for these two ragtrade regents. Mike Ashley will still have a 61.7 per cent stake in his pile 'em high sell 'em cheap sports chain, worth a good £2.4bn. Meanwhile, Nick Robertson's £43m sale this week was mainly a function of his bonus scheme. OK, he could have chosen to turn the awards into shares rather than cash, but, with £400m of his wealth still in Asos shares he's hardly looking to cut and run.
So these directors' dealings, to use the jargon, are not necessarily "sell" signals for other shareholders in UK retailers. In fact, although the shopkeepers themselves will remain dour as ever as part of their hills-old campaign to reduce business rates, there are some reasons to be cheerful about the coming winter season. Surprisingly positive news on the economy keeps making the TV news, and that should conjure up among shoppers the fabled feelgood factor. It will be muted, admittedly: it's hard to feel too good when your bills are rising and you haven't had a pay rise in years. But in many parts of the country, people are in less fear for their jobs than in previous years.
The flood of compensation from PPI misselling should be a small but good-to-have windfall for the shopkeepers too, as will the underpricing of the Royal Mail float (every cloud…).
Finally, some pundits say the baby boom in the recession could give the shops a mini-boost. That one's open to debate. But one thing's sure: with £106m of cash to spend, the Christmas lights for which Mr Ashley's mansion is so famous in his neck of north London will glow brighter than ever.
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