Struggling Debenhams in talks with lenders as Christmas sales fall. Struggling department store Debenhams (DEB) has refused to rule out a company voluntary arrangement as the chain begins refinancing talks with lenders following a steep slide in sales. Debenhams suffered a 5.7% slide in like-for-like sales over the 18 weeks to Jan 5, worse than analysts had feared. Shares in the embattled chain tanked a further 8.5%, pushing its value down to just £63.4m ahead of its annual general meeting later on Thursday. However, the retailer escaped a much-feared profit warning after identifying a further £30m of cost savings by accelerating the closure of one of its distribution centres and implementing a hiring freeze at its head office.
Profit warning hammers Halfords shares. Investors knocked almost a fifth off the value of Halfords Group (HFD) shares after mild winter weather and weak consumer confidence sparked a profit warning on Thursday. The retailer now expects annual pre-tax profit to be between £58m and £62m, compared to last year’s £71.6m, with a similar result for 2020. The bike and car parts seller said like-for-like retail revenue fell 2.2% in the 14 weeks to Jan 4, with motoring and cycling sales down 3.4% and 0.3% respectively. Growth in cycle accessories and children’s cycles was offset by a decline in more expensive items such as adult bikes.
All Bar One owner scores record-breaking Christmas. The company behind Harvester, All Bar One and Toby Carvery beat its rivals over the festive season while taking a record £12m on Christmas Day alone. Mitchells & Butlers (MAB) like-for-like sales swelled by 12.3% in the final two weeks of December, pipping double-digit performances by the likes of Greene King and Stonegate. Like its rivals, M&B benefited from milder weather and the fact Christmas and New Year’s days fell in the middle of the week. Chief executive Phil Urban said records had fallen “on all key festive dates”. Comparable sales over the seven weeks to Jan 5 were 6.9% higher and up 4.7% up over the 14 weeks to the same date.
Stalling sales trip up Card Factory. Shares in Card Factory tumbled on Thursday after a “challenging trading period” meant it would endure “another difficult year”. The FTSE 250 retailer said sales rose 3.4% in the 11 months to December 31 compared to the same period in 2017. However, its sales at stores open for more than 12 months were broadly flat, falling 0.1pc, with “lower high street footfall” contributing to the drop. Shares in Card Factory (CARD) fell more than a fifth at the open before recovering some ground to be down 12% at 171p in afternoon trading, valuing the company at £583m. It also faced higher costs of between £5m to £6m following increases in the National Living Wage and higher electricity charges.
Tesco toasts victory in Christmas sales battle. Tesco (TSCO) has beaten City expectations and toasted a victory over its ‘big four’ rivals following its best Christmas performance since 2009. Britain’s biggest retailer recorded a 0.7% rise in UK like-for-like sales over the 13 weeks to Nov 24. The supermarket’s growth accelerated over the festive period with like-for-like sales up 2.2% over the six weeks to 5 January, marking its fourth consecutive year of growth. Dave Lewis, Tesco chief executive, said that the supermarket had a “successful Christmas” after it had “achieved a lot in the last 19 weeks”.
More pain for Luke Johnson as Brighton Pier profits slide. Brighton Pier Group (The) (PIER), the leisure company chaired by under-fire entrepreneur Luke Johnson, has blamed disruption on the railways for a sharp fall in profits. Engineering works and “recurrent line closures” have “significantly impacted the number of visitors into Brighton and onto the pier. As such, earnings from the Pier have also been lower than expected,” the company said. Annual pre-tax profits will be almost a fifth lower than previously expected, it added. Shares plummeted by 40% as markets opened, wiping about £8m off the company’s market value. They were trading at 48p but had been as high as 188p in November 2014.
Retailers suffer worst festive trading in a decade. Retailers have suffered their worst December since the recession after cautious shoppers delayed spending until the last moment and abandoned the high street to hunt for bargains online. Last month’s trading was as tough as in 2008 when the high street was battered by the credit crunch, according to new sales figures compiled by the British Retail Consortium and KPMG. The weak sales data comes as official figures have shown the savings ratio for UK households has reached minus 0.2%, suggesting that families are outspending their earnings, and despite record low unemployment and improving wage growth.
Greggs’ vegan sausage roll proves biggest hit in six years. Greggs (GRG) has sold “hundreds of thousands” of its new £1 vegan sausage rolls in the first week of January, making it the fastest selling new line in six years. The bakery chain said the new savoury snack, which launched earlier this month in 900 of its stores with the biggest vegetarian food sales, sold out instantly. “It has taken us by surprise,” said Roger Whiteside, chief executive. “We didn’t know if it would sell or not but it has been flying off the shelves.” Mr Whiteside added that sales of its normal sausage rolls were boosted by the new product, as customers who failed to lay their hands on the vegan roll settled for the original as an alternative.
Majestic Wine refuses to rule out store closures. The boss of Majestic Wine (WINE) has refused to rule out store closures as Christmas revenue growth doubled, driven by surging online sales. Comparable revenue for the 10 weeks to the end of December grew by 6.8% as chief executive Rowan Gormley insisted Majestic had “what it takes to be one of the winners” amid a “revolution in retail”. Like-for-like sales from online arm Naked Wines performed best, rising 15.9% on an underlying basis. “Most people’s perception of the Majestic Group is that it is a big offline retailer with a little start-up business attached to it,” said Mr Gormley. But online gross profit overtook that from its retail stores in the first half of 2018, he added.
Hedge funds call in veteran deal maker to chair former Johnston Press (JPR) newspapers. The finance firms in control of the newspaper publisher JPIMedia have called in a veteran deal maker and turnaround specialist as chairman, as the portfolio of titles formerly known as Johnston Press attempts a recovery from administration. Parm Sandhu, a former chief executive of the German cable operator Unitymedia, has been parachuted into the new company by its owners, the former lenders to Johnston Press, which went bust in November. It is understood his appointment will be announced on Wednesday.
DNO bows to Faroe shareholders with higher takeover offer. The North Sea predator circling Faroe Petroleum (FPM) has bowed to pressure from its shareholders by raising the price of its hostile takeover bid. Norwegian oil giant DNO said it would pay 160p a share after failing to convince shareholders to turn their back on the Aberdeen-based company for 152p last week. DNO said the modest increase is its final offer, and warned that it would pull the plug on its bid for Faroe if shareholders fail to take it up by 1pm on January 23. The ultimatum comes less than a week after DNO backed down on its threat to walk away from the bid if shareholders failed to take up the offer of 152p a share by January 2.
Taylor Wimpey shakes off caution with ‘robust’ trading. Taylor Wimpey (TW.) reassured investors concerned about a possible slowdown in the market for new homes, confirming it was on track to meet forecasts for 2018 and predicting a “stable” performance this year. The FTSE 100 housebuilder built about 15,000 homes last year, some 3% more than 2017, and said trading had remained “robust” despite caution among some buyers in London and the south east towards the end of the year. Its average selling price in 2018 rose 2pc to £301,000 and it ended the year with an order book worth £1.8bn, up from £1.6bn the previous year.
