Mixed results in the high street as ASOS takes checkout crown
Marks and Spencer's results expected to fall, while HMV's are buoyant thanks to others' misfortunes
Sunday 28 June 2009
The extent of the recovery in Britain's retail arena is likely to become apparent this week when a raft of high street names including Marks & Spencer, HMV, Game Group and CarpetRight, as well as the online retailer Asos deliver numbers to the market.
Marks & Spencer's embattled executive chairman, Sir Stuart Rose, is expected to unveil disappointing first quarter sales figures ahead of next week's crucial annual meeting.
Corporate governance advisory firms Pirc and RiskMetrics and the UK's biggest FTSE 100 shareholder, Legal & General, have re-iterated their wish for Sir Stuart to relinquish his dual role at Marks & Spencer as soon as possible. The Local Authority Pension Fund Forum has tabled a resolution calling for him to split the top jobs at the firm.
In a busy week for retailers, the music-to-DVDs chain HMV is expected to deliver robust full-year earnings, buoyed by the collapse of its rivals, Woolworths and Zavvi, earlier in the year. HMV has bought 23 Zavvi stores left empty by the collapse of the Virgin-backed group.
Profits at the Simon Fox-led group are expected to arrive in-line with expectations. However, concerns remain about the long-term performance of the firm's Waterstones' book subsidiary. HMV said in April that sales at Waterstones had slumped by 4.5 per cent in the 16 weeks to the end of the month, compared to the same period last year. HMV is expected to maintain its dividend payout.
Computer and console games firm Game Group is expected to deliver an upbeat assessment of trading this week. But in contrast, CarpetRight is expected to reveal a large drop in full-year profits. The flooring group said earlier in the year that like-for-like sales had slumped by 15 per cent between February and April.
Allied Carpets, another flooring firm, said just last week that it was considering a company voluntary arrangement to secure its future.
This week's most spectacular figures are likely to come when Asos, the online retailer that sells catwalk copy clothes, reveals its profits jumped by as much as 70 per cent over last year. The firm is expected to overcome the wider problems in the retail sector, with profits coming in at around £14m for the year to the end of March. Sales are expected to hit the £163m figure for the year.
The Nick Robertson-led firm recently said that its sales had grown by 80 per cent this spring as young fashion-hungry shoppers lapped up its offerings. Asos's share price has increased by 30p to 380p over the past 12 months, in marked contrast to the rest of the struggling retail arena.
Mr Robertson, whose great grandfather founded the Austin Reed menswear chain, retains a stake of nearly 13 per cent in the company.
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