Companies are bracing themselves for a slump

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The Independent Online

Stylish jumpers, vacuum cleaners, steel pipes and Swiss Army knives. Around the world, it seems, companies are bracing themselves for a slump that will hit everyone with equal force. Since the attacks, the flow of profit warnings from corporate UK, America and continental Europe has been thick and fast. Starting with those industries obviously affected such as aviation, hotels and insurance, the trend has widened to include many others.

Fears of global recession were real enough before 11 September, but as far as the profit warners are concerned, that sealed the deal. At French Connection's interim presentation, the company which owns five stores in Manhattan ended by saying the tragedy had "of course affected trading". London's Oxford Street also felt the pain. The Selfridges department store suffered a sharp downturn in sales, although the outlet in Manchester seemed to hold up well.

Media companies have been having a tough time of late, but the US attacks have added to the disappointment. Avesco, the UK owner of half the merchandising rights to Who Wants to be a Millionaire?, said profit would be down. "It is impossible to predict the overall effect in the full year on our core services from the recent tragic events in the US," the company predicted bravely.

In Sweden, the appliance maker Electrolux warned that third-quarter profit would drop "significantly" following the attacks, and could lead to further job cuts. The day before, oddly enough, Electrolux's great rival Maytag, a US appliance maker, had said third-quarter sales would rise 15 per cent and that it was planning to hire more workers to meet the demand.

Other companies believe their businesses will be harmed. Victorinox, the maker of Swiss Army knives, warned the market to expect lower sales. Swissair has said it will no longer be selling the knives on flights, and Zurich airport will not stock them in its shops. Quiagen, the big Dutch biotechnology group, said it would miss third-quarter analysts' estimates because of transport delays caused by the attacks. The company does lots of US business and relies heavily on transatlantic travel. Analysts say the drop is going to be more than just a blip, adding: "As with so many companies, things were on their way down anyway."

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