MARKET REPORT: Warm weather puts the wind up fashion retailers

MARKET REPORT: Warm weather puts the wind up fashion retailers

Some of Britain’s best-known retailers fell out of fashion with the City amid concerns over waning demand and warmer weather affecting the upcoming autumn and winter clothing seasons.

Shares in Next slipped 4.4 per cent, or 314p, to 6900p and Primark owner AB Foods sank 1.7 per cent, or 34p, to 1950.5p after the pair were added to JP Morgan’s ‘negative catalyst watch’. 

The US investment bank said unseasonably warm weather – with the world’s September temperatures the hottest on record – has affected clothing retailers as they launch their autumn and winter product lines.

JP Morgan also flagged concerns that the benefits of pent-up demand in European retail ‘could start to wane, and that clothing price deflation could also weigh on top-line forecasts into 2024’.

The bleak outlook trickled through the industry as Marks & Spencer shed 4.1 per cent, or 9.4p, to 221p and JD Sports dropped 3.1 per cent, or 4.4p, to 138.75p.

Retail rocked: Shares in Next slipped 4.4%, Primark owner AB Foods sank 1.7% after the pair were added to JP Morgan’s ‘negative catalyst watch’

Retail rocked: Shares in Next slipped 4.4%, Primark owner AB Foods sank 1.7% after the pair were added to JP Morgan’s ‘negative catalyst watch’

The City also had little enthusiasm for luxury car maker Aston Martin as JP Morgan cut its target price to 379p from 425p. Shares reversed 3.3 per cent, or 8.2p, to 241.4p.

But there was good news for Compass Group, the world’s largest catering company, after Jefferies upgraded its rating to ‘buy’ from ‘hold’ and raised the target price to 2575p from 2000p. Shares added 1.4 per cent, or 28p, to 2044p.

The FTSE 100 fell 0.03pc, or 2.37 points, to 7492.21 and the FTSE 250 slipped 0.9 per cent, or 160.26 points, to 17572.06.

It was rollercoaster session for the London stock market as investors came to terms with the attack on Israel over the weekend.

Volex became the latest firm to report a cyber-attack. 

The company, which makes power cords and charging plugs for electric cars, said hackers gained ‘unauthorised access to certain IT systems and data’ at some of its international sites.

It added that the issue was unlikely to be too costly as there was minimal disruption to global production levels.

Stock Watch – Chill Brands

Chill Brands landed a major deal to sell its nicotine-free vapour products in 150 WH Smith stores – including at Heathrow, Gatwick and Kings Cross station.

Boss Callum Sommerton said the deal provides ‘exposure to hundreds of thousands of potential customers every day’. 

Chill Brands added it has secured more than £350,000 worth of orders from UK retailers since its vape launched in August.

Shares surged 8.9 per cent, or 0.45p, to 5.5p.

Volex, which is chaired by financier Nat Rothschild, joined the likes of engineer Vesuvius (down 1.5 per cent, or 6.2p, to 400.8p), manufacturer Morgan Advanced Materials (down 2.7 per cent, or 6.5p, to 235p) and outsourcer Capita (down 0.24 per cent, or 0.04p, to 16.84p) in suffering cyber attacks this year.

Volex shares fell 7.3 per cent, or 22.5p, to 288p.

The private equity firm bidding to buy DX Group has been given more time to carry out checks on the delivery company before deciding whether to make an offer.

HIG European Capital Partners sent a ‘non-binding and conditional proposal’ worth 48.5p a share, or just under £300million, last month. Under takeover rules, it had until yesterday to formally announce if it wanted to table a bid or walk away. 

The deadline has been extended to the close of play on November 6. Shares rose 0.6 per cent, or 0.25p, to 42.5p.

One deal that made it over the line was the sale of Citigroup’s consumer wealth portfolio in China to HSBC.

The agreement covers around £2.95billion in assets and deposits from wealth customers across 11 large cities.

Shares in HSBC slid 1.5 per cent, or 9.7p, to 645p. Citigroup rose 0.5 per cent, or 0.19p, to 40.14p.

Assura, a primary care property investor and developer, raked in £1.5million through 152 rent reviews in the six months to the end of September.

And the company refinanced its loan – or revolving credit facility – by increasing it from £125million to £200million.

But it also warned of ongoing delays on pipeline schemes as it negotiates rents to reflect higher construction costs. Shares dropped 0.2 per cent, or 0.1p, to 42p.

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