The FTSE 100 is down 0.4 per cent in early trading. Among the companies with reports and trading updates today are Boohoo, Evoke and British American Tobacco. Read the Friday 18 October Business Live blog below.
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‘Boohoo is one retailer that’s not in growth territory’
Derren Nathan, head of equity research, Hargreaves Lansdown:
‘The FTSE 100 has opened down this morning, giving up some of the gains seen so far this week, with little in the way of corporate news to get excited about.
‘But stronger than expected retail sales should provide some support to some consumer stocks. Volumes grew by 0.3% in September, compared to expectations of a 0.3% decline.
‘But the good news was far from evenly spread. Mobile phones and computers performed best, perhaps reflecting the emergence of AI-enabled hardware from multiple manufacturers. Supermarket sales volumes were less encouraging, falling 2.4%, impacted by the miserable weather and a pull-back in demand for premium products.
‘Online clothing brand Boohoois one retailer that’s not in growth territory. The total value of goods sold fell by 7%, with the UK down 2% and much sharper declines in the US and elsewhere. Revenue fell even faster – at 15%.
‘The likes of Shein and Temu are making this a fiercely competitive market, and it’s taking a toll. . CEO John Little is to step down after a 5-year tenure. With the shares down nearly 90% in that period, few investors will be crying over his departure.
‘The Group’s exploring options to maximise shareholder value, but any successor will need to lean heavily on the tiller from day one to turn this ship around.’
Campaigners call for action on gender gap
Campaigners have blasted an ‘unacceptable’ drop in women in top corporate jobs.
A stark report showed the number of female executives at Britain’s biggest companies has fallen for the first time in eight years.
Password crackdown boosts Netflix as it pulls in 5m new customers
More than 5m people signed up to Netflix over the summer as a crackdown on password sharing and a raft of hit shows boosted business.
The US streaming giant said subscriber numbers rose by 5.1m to hit 283m in the three months to September 30.
Capital Gains Tax hike will cripple investment, Peel Hunt boss warns
Steven Fine does not mince his words on the Budget – especially when it comes to capital gains tax (CGT).
Rachel Reeves is reportedly planning to increase CGT on shares in the Budget by ‘several percentage points’ from the current rate of 20 per cent.
Coming months ‘critical’ for UK retailers
Silvia Rindone, EY UK and Ireland retail lead:
‘The next few months will be critical as retailers brace themselves for the ‘golden quarter,’ with key shopping events such as Halloween and Black Friday drawing near. Retailers will be using discounting strategies to stimulate consumer spending and manage stock levels more effectively.
‘Retail sales could still be volatile in the run up to Christmas, with retailers who can target particular customers seeing more success.
‘However, this year’s discounting efforts seem to be more spread, indicating less pressing need to offload stock as retailers have learned improved inventory management. However, the possibility of a ‘Black November’ remains, as retailers spread out the trading period to avoid the intense competition of the year-end rush.
‘As we progress through the final quarter, it will be imperative for retailers to closely monitor sales volumes, inventory, and the competitive landscape.
‘The balance between timely promotions and the risk of premature discounting is delicate; retailers must navigate this with care to avoid the pitfalls of either scenario—be it stock shortages or overstock. It’s a precarious path that demands strategic foresight and agility.’
Boohoo boss to exit as struggling retailer launches review of divisions
Boohoo boss John Lyttle is set to step down, the online fashion firm has revealed as it announced a review of strategic options for its various divisions to maximise shareholder value.
The group also said on Friday it has agreed a new £222million debt facility and reported a 7 per cent fall in first half sales by gross merchandise value.
Boohoo executive chair Mahmud Kamani said: ‘The Board is focused on ensuring it takes the right steps to drive boohoo Group in the interest of all its stakeholders.
‘We are delighted to have agreed a new lending facility which shows the support of our existing banks and their confidence in the Group.
‘The business has evolved over last few years and has an offer that is much wider than our original focus on young fashion. The time is now right to consider options with regard to corporate structure, with the aim of maximising shareholder value.
‘I would like to personally thank John for the contribution he has made to the Group. John has built a talented and inspiring leadership team who will ensure we are best positioned for sustainable growth.’
Retail sales rise unexpectedly in September
UK retail sales rose unexpectedly in September, adding 0.3 per cent for the month, fresh data from the Office for National Statistics shows.
The rise, which compares to forecasts of a 0.3 per cent contraction, was driven by the launch of the latest iPhone and other technology products.
The ONS said telecoms and computers were the main drivers of non-food sales, with the sectors jumping by almost 35 per cent in monthly terms in September.
Gold at record high above $2,700/oz
Gold has breached the $2,700-per-ounce level for the first time ever, as US election jitters and simmering Middle East tensions boost safe-haven demand.
Also aided by global interest rate cuts, spot gold is currently teading at $2,706.30, having added 0.6 per cent this morning and 2 per cent over the last week.
