Selfridges trading update brings some cheer to the high street

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The Independent Online
SELFRIDGES HAS not exactly over-burdened investors with good news since the department store retailer was demerged from Sears last summer but there were some more promising tidings from the group yesterday.

Its Christmas trading statement showed that in the six weeks over Christmas, sales at its flagship store on London's Oxford Street were 3.2 per cent up on the same period last year . And the new Manchester store at Trafford Park, which opened in September, has reached the required level with a contribution of pounds 13.4m so far.

At Oxford Street, the best performers have been the perfume department, where sales rose by 12 per cent, and the children's department, which saw an 8 per cent rise.

This helped offset a poor performance in clothing, where sales were flat. The winter sale has been "satisfactory" and there is no problem with over- stocks.

Selfridges' shares rose on relief that the group had not become another victim of the high street blues. But the figures do not quite represent the "turnaround" being claimed in some quarters yesterday.

A key factor in the sales growth was the re-opening in the autumn of the beauty hall, which is the reason perfume sales have been so fragrant. Selfridges' redevelopment programme will finish this year with the completion of the menswear department overhaul on the ground floor. After that, the figures will be truly like-for-like and comparisons may be a little more onerous.

John Richards at BT Alex.Brown described Selfridges figures as "relatively reassuring" but pointed out the boost from the new beauty hall. He also notes that underlying net asset value is 214p, compared with yesterday's close of 213p, up 6.5p on the day.

That might seem to offer support but a more significant factor is the near 7 per cent now held by the property group British Land. That has buoyed the share price as speculation persists that John Ritblat's group may mount a bid or push for a sale and leaseback of the Oxford Street site.

On BT Alex.Brown's full year forecast of pounds 18m the shares trade on a forward multiple of 20. Analysts say that on fundamentals the stock is overvalued and that bid prospects are based more on hope than expectation.

There will be far worse trading statements that yesterday's update from Selfridges but that is no reason to chase the shares.

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