Tuesday witnessed another myriad of quarterly and Christmas trading updates, with the likes of Asos and Debenhams leading the pack. Record sales in the week before Christmas helped Debenhams avoid another disastrous festive season, although the retailer’s shares tumbled as it warned of falling profit margins.
It is worth to remember that the company issued a profits warning in December 2013 and, since then, the department store has cut back on promotions and improved its online business. This helped it post a 4.9 percent rise in like-for-like sales in the four weeks ending 10 January and 2.4 percent for the seven weeks ending on the same day, highlighted ‘The Independent’.
“While it is encouraging that management stuck to its new trading stance with 10 fewer days on promotion, we continue to believe that Debenhams is strategically challenged and needs to reinvest further gross-margin opportunity back into the offer,” pointed out Kate Calvert, a retail analyst at Investec.
But strong figures have not been sufficient for investors, who saw the stock fall 8 percent to 70 pence apiece.
On another note, Asos shares rose 8.5 percent Tuesday after the online fashion retailer put last year’s warehouse fire and three profit warnings behind it, posting a 15 percent rise in retail sales.
Still in London, Ray Kelvin, founding chief executive of Ted Baker, has sold shares worth 4.65 million pounds that was awarded under the retailer’s performance pay plan, ‘The Times’ reported.
Kelvin appointed brokers at Liberum Capital to place his shares directly to investors to sell 202,382 shares. Shares were placed at 23 pounds apiece. Even after the disposal, Ray Kelvin remains by far the company’s biggest shareholder, holding 35.38 percent of the group, a stake worth close to 370 million pounds.
Across the Atlantic, Deb Shops, discount clothing stores for girls and women, will join other struggling retailers around the world and close a good number of its shops. After more than 80 years in business, the Philadelphia-based fashion retailer announced it is closing all 287 stores across 42 states after filing for Chapter 11 bankruptcy on December, 4.
The stores started going-out-of-business sales at all locations nationwide. Store locations will remain open until all merchandise is sold. Deb gift cards will be honoured through March 8, according to the company.
Elsewhere, shares of Pacific Sunwear of California (NASDAQ:PSUN) have earned a consensus rating of “Hold” from the eight brokerages that are presently covering the company, Analyst Ratings.Net reports. The average 1-year target price among brokers that have issued a report on the stock in the last year is 2.84 dollars.