Carpetright shares crash after huge profit warning

Carpetright shares have crashed by up to 50 % following the store issued a surprise profit warning and blamed a decrease in consumer confidence for sales cratering.

The flooring chain’s harsh update pulled its stock lower up to 45pc to 90p and knocked shares in other furniture and DIY groups lower as spooked investors fretted that customers might be delaying paying for big-ticket products.

Shares in B&Q owner Kingfisher fell 3.5pc to 331.3p, sofa store DFS lost 3.8pc to 198.2p, and smaller sized rival SCS dropped 4.9pc to 212p in mid-morning buying and selling.

Carpetright’s second profit warning in under two several weeks is especially painful for investors who’d recently been told in December to lessen their profit expectations.

Carpetright share cost

Analysts at Peel Search stated that although Carpetright had blamed the broader consumer outlook, the City has “seen solid sales elsewhere (Topps & Headlam) and you will find aspects of Carpetright-specific issues, most particularly the entire re-varying from the bed offer in front of peak [buying and selling]”.

The organization, that has 416 shops within the United kingdom and 136 in Europe, stated that there was a “sharp deterioration” in do business with sales in shops open at least a year slumping by 3.6pc within the 11 days to The month of january 13. Total sales dropped 4.5pc after it closed 10 stores.

The publish-Christmas period was “considerably behind expectations” with “lower customer footfall”, Carpetright stated. This had led to a “significant effect on profitability and our outlook for that indication of the season”.

Consequently Carpetright has slashed profit forecasts to between £2m and £6m, well below City expectations of £16.5m. The store includes a lengthy good reputation for profit warnings, issuing its first in 2003 and a minimum of nine more during the last fifteen years.

Wilf Walsh, leader, stated: “Despite an optimistic begin to our third quarter, we view a substantial degeneration in United kingdom buying and selling throughout the important publish-Christmas buying and selling period. While average transaction values were up every year, the amount of customer transactions since Christmas was dramatically lower, which we feel is suggestive of reduced consumer confidence.”

Like-for-like sales in the core flooring business, which in fact had formerly been performing well, sank 7.1pc within the publish Christmas period.

There is a rather better picture in the European business, where it’s shops within the Netherlands, Belgium and also the Republic of eire like-for-like sales for the reason that division rose 4.3pc throughout the third quarter.

Christmas buying and selling Retail winners & losers

In December Carpetright blamed “fragile” consumer confidence and “intensified competition” for any collapse in two-year profits, which fell 93pc to simply £300,000. At that time it blamed greater staff costs and discounting for that hit to the main point here. In October it cautioned that first-half buying and selling was “volatile”, with floor sales neglecting to offset declining interest in its beds.

“It’s the same kind of story just like other brands which have unsuccessful to adjust to altering consumer trends – lower footfall leaves transaction figures lower considerably from this past year,” stated Neil Wilson of ETX Capital. “We have to also consider less strong consumer sentiment for giant ticket products like a factor, in addition to tougher competition from the more diverse marketplace.”

Festive revellers spent less on food, going for a toll on restaurants

Britain’s pub and restaurant industry looks to possess endured a difficult Christmas as festive revellers curbed their paying for food.

Data in the Coffer Peach business tracker, which is viewed as a bellwether for that industry, has proven comparable sales were lower .1pc for that six-week Christmas period when compared to prior year.

Food made an appearance is the primary casualty, with like-for-like sales at restaurants lower 1pc over a small rise of .6pc at pubs. This trend will probably be behind chains for example hamburger restaurant Byron shutting down stores and seeking rent reduction from landlords.

The Coffer Peach tracker, which concentrates on branded restaurants and managed pubs (individuals operated by a pub company directly rather with a tenant) stated the information recommended everyone was “more prepared to visit drink than eat this festive season.

The tracker demonstrated drink sales were robust inside the managed pub sector, up 1.8pc, but food fell 1.4pc.

Coffer’s Mark Sheehan stated regardless of negative headlines concerning the sector, the eating and consuming out market “is not in freefall”.

“There isn’t any question the buying and selling atmosphere is competitive however these figures aren’t the vehicle crash that’s been broadly portrayed,” he stated.

Mr Sheehan stated that “2018 is a challenging year so we anticipate seeing bars and pubs buying and selling more robustly than restaurants”.

The tracker demonstrated stated the divergent fortunes between your restaurants and pubs was most stark working in london, where casual dining chains endured a couple.6pc stop by sales while pub turnover was up 1.5pc.

Total sales growth one of the 37 companies within the tracker, including Pizza Express, Frankie & Benny’s and Wagamama, was 3.4pc, when compared to festive period this past year, reflecting the ongoing, although more subdued, aftereffect of new openings.

Paul Newman of leisure consultancy RSM, which plays a role in the tracker, stated numerous high-profile brands had announced recent site closures which, considering that consumer confidence is waning, “we expect our restructuring teams to be stored busy within the several weeks ahead”.

Whitbread boss: Now isn’t the proper time to spin off Costa Coffee

The boss of Costa Coffee and Premier Inn owner Whitbread has hit back at calls from activist investor Sachem Mind to separate the organization up.

Alison Brittain said the organization was just in the middle of its transformation plan and splitting it up now, that could be achieved through the purchase of Costa, could be like selling real estate half-way via a renovation project.

“Should you consider our transformation plan like being in the center of renovating your home and in the middle of adding extra time, at that time over time a home is most likely less valuable as once the jobs are complete,” she stated.

The main executive didn’t confirm if she’d spoken directly with Sachem Mind, which purchased a 3.4pc stake in Whitbread recently, about its reported requires a rest-up. She stated the organization spoken regularly to any or all its shareholders and “that will not exclude [Sachem Mind]”.

Leader Alison Brittain has batted away suggestions a rest-up is sensible in the middle of its transformation programme

Whitbread is going to be talking with its major investors the following month included in a scheduled roadshow which is understood it’ll talk with the American activist then.

Ms Brittain stated the organization continually stress-tested its business to think about be it current structure continued to be fit for purpose. She stated the job it had been doing at Costa, including switching towards getting more sites at travel hubs and drive thrus, along with its efforts to develop in China, would “add great shareholder value”.

The comments be the leisure giant was knocked by falling high-street footfall, reporting single.5pc decline in like-for-like sales at Costa for that 13 days to November 30. The coffee chain’s Express division, whose machines feature in supermarkets, perked the figures as much as leave Costa’s total sales up greater than 7pc for that period.

whitbread shares

Ms Brittain acknowledged the “well-publicised weak retail footfall”, adding it had become likely to continue this season. UK high-street footfall fell 3.5pc in December, based on figures released through the British Retail Consortium and Springboard the 2009 week.

Elsewhere, the business’s restaurant business, including chains for example Beefeater, performed strongly with like-for-like sales within the quarter up 1.8pc.

Its Premier Inn hotel chain saw comparable sales rise just .5pc nevertheless its flurry of latest openings meant total sales for that quarter rose 5pc.

Shares in the organization rose greater than 3pc to £39.75.

Mister Philip Green’s Arcadia imposes discount on suppliers in bid ‘to remain competitive’

Topshop owner Arcadia has told suppliers it’s imposing a 2pc discount on future orders and orders it has placed, blaming the altering retail atmosphere.

Arcadia’s leader Ian Grabiner stated, inside a letter to suppliers, the group had “absorbed significant costs in technology, distribution and individuals”. 

Due to this, “to be able to remain competitive within the global market”, Arcadia had made the decision to impose a discount across all current and future orders from February 1. The move will probably save Arcadia, of Mister Philip Eco-friendly, millions in costs.

A spokesman for Arcadia stated: “We lately requested our suppliers for any small rise in our discount terms.  The price of servicing and delivering to the customers through new channels is significantly greater than with the traditional retail marketplace.

“It has led to major purchase of our infrastructure when it comes to systems and distribution in addition to a large headcount increase. These substantial developments to the business will mutually benefit our suppliers.”

Christmas buying and selling Retail winners & losers

News from the letter to suppliers, first as reported by ITV, follows a difficult festive period for retailers, having a flurry of profit warnings among high-street names including Debenhams and Moss Bros.

The torrid Christmas uses inflation pressed prices up within the period, with shoppers reining in spending and personal debt in a record a lot of £205.8bn. The amount of retailers who collapsed into administration ticked greater in 2017, the very first time in 5 years. 

However, online stores have, largely, were able to prevent the decline. Boohoo, the internet store which lately signed an offer with TV star Kourtney Kardashian, lifted sales guidance a week ago as revenues bending within the increase to Christmas. 

Falling footfall and squeezed margins knocked retailers in run-as much as Christmas 

Retailers endured within the run-as much as Christmas as shoppers steered obvious of high street shops and margins were squeezed by greater costs, Black Friday discounts an internet-based shopping.

Total footfall dropped 3.5pc in ­December in contrast to this past year, the greatest fall since March 2013, based on figures in the British Retail Consortium and retail analysts Springboard, rich in roads and shopping centres the toughest hit.

Separate research through the Retail Think Tank, which is a member of ­accounting giant KPMG and research firm Ipsos Retail Performance, stated the sector’s ­financial health within the so-known as “Golden Quarter” fell the very first time since 2012 because of the “worsening” economic system, fragile consumer confidence and tighter margins affecting non-food retailers particularly.

BRC leader Helen Dickinson stated falling footfall reflected squeezed incomes along with a move towards e-commerce. She stated: “Households needed to use their cash more carefully, researching products online, instead of venturing out to stores to browse.

“Retail parks fared slightly much better than high roads by supplying Christmas shoppers using the draw and ease of parking, easy click-and-collect, and leisure facilities.”

The RTT stated heavy discounting and much more internet sales, resulting in greater ­logistics costs, injured retailers’ profitability within the three-month period which are the sector’s most powerful.

RTT member Jonathan De Mello, of analysts Harper Dennis Hobbs, stated: “Demand driven by promotion has stored retailers busy, however with margins squeezed so tight, the advantage of the additional sales won’t have had the preferred, or needed, impact.”

B&M sales soar because of new stores and economical groceries

Sales on sale store B&M soared in the run-as much as Christmas as shoppers clicked up its cheap food and revenues were bolstered by its purchase of grocery chain Heron Foods.

Group sales rose 23pc to £970m within the three several weeks to Dec 23, up from 20.5pc development in exactly the same period this past year, with Heron adding £80m to the peak line.

Sales at United kingdom stores open several year were up 3.9pc, which B&M stated underlined “continued robust performance in our grocery and FMCG ranges”. Nevertheless it marked a slowdown in the 7.2pc like-for-like growth it recorded within the same period this past year.

Though it doesn’t sell fresh foods, B&M’s selection of cut-cost branded staples, for example biscuits, crisps and cereals, pose yet another threat towards the “big four” of Tesco, Sainsbury’s, Morrisons and Asda, that are already struggling with competition from fast-growing German grocers Aldi and Lidl.

Retail analyst Bryan Roberts stated: “Worth noting that B&M highlights grocery like a driver of like-for-like growth. Media obsessed over Aldi & Lidl while overlooking the discomfort B&M, Home Bargains etc are inflicting on [the] big four”.

B&M opened up 19 United kingdom stores at that time, taking its total to 569. It bought Heron, that has 263 stores and sells mostly frozen along with other non-fresh foods, for £152m in August.

Chief executive Simon Arora, who co-founded the organization together with his brother Bobby, stated it “continues to visit from strength to strength”.

“Despite the demanding comparatives in the quite strong Christmas in 2016, our buying, logistics and retail teams achieved another outstanding performance this season by doing what we should do best, that is delivering great value for purchasers week-in, week-out,” he stated.

B&M’s shares were up 3.6pc to 412p at the begining of trade. 

South African Steinhoff unit mulls early redemption of bonds

Steinhoff International Holdings stated certainly one of its South African units is thinking about an earlier redemption of notes in issue because the global store struggles to remain afloat among a cpa scandal.

Steinhoff Services’ redemption of securities issued within 15bn-rand ($888m) bond program will need prices supplements to become amended and restated, the Frankfurt- and Gauteng-listed company stated inside a statement following the market closed on Thursday. The required approvals must be acquired, Steinhoff said, without giving more detail.

Parents company’s woes started on Dec 5 if this stated it’d uncovered accounting irregularities which leader Markus Jooste was resigning. After that its bond yields spiked and it is share cost lost the majority of its value. Banks began to withdraw credit lines and regulators from Nigeria to Europe started to research. The stock fell 3.7pc to six.50 rand by 9:36am in Gauteng, extending its decline now to 26pc.

To boost liquidity the store has began parting with a few assets it developed inside a two-decade acquisition drive. French store Carrefour on Thursday stated it acquired a 17 % stake in Showroomprive from Steinhoff’s Conforama for 79m (£70.4m), while last week Steinhoff’s Austrian unit, Leiner Immobilien, sold its flagship store in Vienna for 60m. Other measures to shore up finances include Steinhoff selling its Gulfstream 550 jet, while Jooste continues to be auctioning his racehorses.

With Steinhoff also getting issued debt worldwide, the ecu Central Bank stated the 2009 week it’d discarded their securities once they were downgraded to junk. 

Steinhoff Services, the automobile the store uses to market listed bonds around the Gauteng Stock Market, has 12 notes in issue, based on data published by Bloomberg. Individuals securities add up to as many as 7.6bn rand indebted. Over fifty percent of individuals sales required place this past year with Steinhoff Services getting offered 4.83bn rand of bonds in 2017. It’s three notes worth as many as 1.4bn rand maturing in 2018.

Several Nigeria-registered Steinhoff shareholders have requested to sign up inside a class-action suit being introduced against the organization through the Nederlander Investors Association, Gauteng-based Working Day newspaper reported on Friday, citing Armand Kersten, mind of European relations in the Nederlander group.

The suit is among a minimum of three filed by investors angry over their losses, including one out of Frankfurt in December. Innsworth Litigation Funding, a London-based unit of Paul Singer’s Elliott Management Corp., has started creating a situation against Steinhoff and needs shareholder clients prepared to sue, it stated recently. Deminor Recovery Services, a The city-based shareholder advisory group, has additionally asked institutional shareholders to join up for any potential situation.

Tesco’s record festive buying and selling hurt by Palmer & Harvey collapse

Tesco has fallen lacking City expectations after record Christmas food sales were blown off target by lost tobacco sales brought on by the demise of wholesaler / retailer Palmer & Harvey.

Britain’s greatest store recorded single.9pc increase in United kingdom like-for-like sales within the 19 days to January 6, below forecasts. Analysts had been expecting Tesco to become topped the festive champion with much greater sales of two.8pc.

Shares in Tesco dipped by 3.2pc, to 205p in morning buying and selling.

The supermarket stated it had enjoyed record sales and volumes within the four days prior to Christmas since it’s fresh foods sales leaped by 4pc, outperforming the marketplace. Tesco credited the effectiveness of its party food offer, which incorporated cheese boards, sales of whole smoked salmon and it is ‘Free From’ range, adding for an overall 3.4pc lift in food sales within the 19 days.

However its strong grocery performance occured back with a .6pc fall generally merchandise after lacklustre sales of laptops and video consoles and the other .6pc hit from lost tobacco sales.

Tesco share cost

Palmer & Harvey, which relied on Tesco for 40pc of their revenues, tumbled into administration in November, triggering the immediate lack of 2,500 jobs. The supermarket has revealed the disruption towards the business brought on by attempting to replicate the wholesaler’s distribution network and source cigarettes and moving papers from the tobacco makers.

Dave Lewis, Tesco leader, stated the lost tobacco sales “required the shine off a normally outstanding performance for that period in general.” 

He added the complexity of getting to set up alternate deliveries to exchange the service formerly provided by Palmer & Harvey during the height period was “challenging” and put “further strain into our distribution network, particularly publish-Christmas”. Mr Lewis stated the issues had now been resolved, indicating there could be no impact within the following quarter.

Dave Lewis, Tesco boss

The Tesco boss stated he was still being confident for that full-year. “The lengthy-term momentum within our business continues,” he added after posting a 4th consecutive increase in Christmas sales.

Tesco also says it’d enjoyed the most powerful quarterly performance at its vast Extra hypermarkets, with like-for-like sales up by 1.8pc within the period, a couple.3pc increase in its convenience shops and 5pc growth online with more than 4 million orders within the six days prior to Christmas.

Mr Lewis stated that “consumer sentiment has changed” previously year as household budgets were squeezed by rising food and fuel prices but he added he saw “inflation was abating” within the other half of the season.

Tesco stated it had handed down less inflation than its competition, but didn’t include discounters Aldi or Lidl in the analysis.

Christmas buying and selling Retail winners & losers

Rival Sainsbury’s on Wednesday recorded single.1pc lift in like-for-like sales after slowing development in its Argos division while Morrisons beat City forecasts having a 2.8pc increase in like-for-like sales. 

Grocers have performed much better than fashion retailers within the festive period as shoppers have reined in spending among rising fuel and food prices. Figures from Nielsen stated shoppers spent £10.5bn on groceries within the four days to December 30, 3.7pc greater than this past year.

Meanwhile Booker, the wholesaler / retailer that Tesco is buying for £3.7bn, recorded a 3.8pc lift in group like-for-like sales within the 16 days to December 29. Stripping out tobacco sales, which continue being a continue the company, like-for-like sales rose by 6.2pc, helped by “good progress” at its Premier, Londis and Budgens convenience shop brands. 

John Lewis warns of ‘volatile’ economy despite record Black Friday sales

A record Black Friday helped John Lewis publish strong development in the increase to Christmas however the worker-owned store cautioned intense competition along with a “volatile” economy would weigh on its full-year results.

Sales at John Lewis Partnership, including Waitrose, rose 2.5pc close to £2bn within the six days to December 30, boosted by 3.6pc growth at its mall chain.

Black Friday was the greatest day’s sales in John Lewis’s history, with revenues that week up 7.2pc year-on-year. Electricals rose 5pc over the period, and garments improved by an identical amount, but homeware dipped .3pc.

The partnership’s top line growth was pulled lower with a slower expansion at Waitrose, where sales at stores open several year rose 1.5pc. JLP said when the time had incorporated New Year’s Eve, because it did this past year, like-for-like growth would be for sale 2.1pc.

The supermarket’s sales were boosted by the popularity of Heston Blumenthal’s “Citrus Sherbet Lazy Gin”, because it offered a month’s price of stock in a single day.

However the store warned its financial obligations were growing in accordance with cashflow and it is chairman Mister Charlie Mayfield stated: “Searching ahead to 2018/19 we predict buying and selling to become volatile because of the economic atmosphere and anticipate that competitive intensity continues, driven through the structural changes happening within the retail industry.”

Sainsbury’s grocery sales held back by less strong Christmas at Argos

Sainsbury’s has published single.1pc lift in like-for-like sales within the festive period following a less strong performance at Argos required the shine off strong grocery sales.

The supermarket recorded a couple.3pc increase in food sales within the 15 days to The month of january 6, boosted with a 8.2pc begin online grocery sales along with a 7.3pc sales increase at its convenience shops.

However, despite a good investment in Argos’s speedy Steps For Success delivery service along with a roll-from Argos concessions to Sainsbury’s supermarkets, the audience recorded single.4pc stop by general merchandise sales throughout the third quarter.

The autumn generally merchandise sales is in stark contrast to 2016 when its acquisition of Argos helped turbo-charge Sainsbury’s festive period by adding a 3.7pc increase in sales.

Sainsburys

Mike Coupe, leader, stated that “Argos stores in Sainsbury’s supermarkets performed particularly well and Argos saw record sales over the Black Friday period”. The Sainsbury’s boss added that both general merchandise and clothing “grew share inside a challenging market”.

Sainsbury’s added that although it was “careful concerning the consumer atmosphere around ahead”, it expects to create as much as £20m more in cost savings from the Argos takeover than first thought. The supermarket stated it now likely to achieve between £80m and £85m of underlying earnings when compared with its previous guidance of £65m.

As a result underlying profit is going to be moderately in front of City forecasts.

The mixed fortunes of Sainsbury’s food and general merchandise division is fresh proof of the difficulties facing non-food retailers. The 2009 week industry figures says food like-for-like sales increased by 2.6pc during December, while non-food like-for-like sales came by 1.9pc.

Meanwhile, discount supermarket Lidl has announced record sales over Christmas, with turnover rising 16pc in December. The discounter, which opened up nine new stores recently taking its total to 693, presently has 5pc share from the UK’s grocery market. Lidl, like Aldi, doesn’t split out its like-for-like sales.