Retail shares dive on Christmas trading reports

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The Independent Online
SHARES IN the retail sector took a pounding yesterday after a series of gloomy Christmas trading statements underscored the tough conditions on the high street.

Boots Company was among the major fallers, with shares tumbling 60.5p to 938p after the company said sales in high street stores had been cannibalised by new out-of-town outlets. Like-for-like sales at Boots were just 1.5 per cent higher in the three months to December. Sales of gifts were particularly disappointing.

Shares in Storehouse, which owns the retail chains BhS and Mothercare, also slipped, closing down 9.5p at 112.5p. Group sales for the 12 weeks to 2 January were down 2.4 per cent, although the company recorded a slight improvement in gross margins.

BhS's share of womens and menswear grew, but at Mothercare the picture was bleaker, with clothing sales hit by competition in the childrenswear market. Game, the fast expanding computer games retailer, saw its shares slump 63p to 102.5p yesterday after it reported a surprise 3.9 per cent drop in sales in the Christmas and New Year period. It also warned that delays in its store opening programme would hit profits for the full year.

Shares in Rosebys, the furniture retailer, closed marginally lower after it said like-for-like sales dropped 4.1 per cent over the Christmas period.

There was better news for GUS, owner of Argos, which saw shares rise from 581p to 607p following a stronger-than-expected Christmas trading statement.

According to GUS, trade picked up in December, with customers rushing to buy last-minute Christmas presents.

Analysts said consumer confidence may have been buoyed by a series of UK interest rate cuts, a view echoed in the latest survey by Business Strategies, the consultancy. The survey found that most households believed they would be better off in 1999.

House of Fraser, the department stores group, saw its shares rise 4p to 57.5p after it reported underlying Christmas sales growth of 0.2 per cent. Tight stock control helped the group improve profit margins.

Meanwhile, shares in Booker, the struggling cash-and-carry group, edged 2.5 p higher to 54 pence.

Booker announced a 3 per cent rise in underlying Christmas sales, the sale of its catering unit Foodservice and the appointment of a new finance director.