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The way things are going, expect pre-Christmas sales signs to go up in the High Street even earlier this year, perhaps next month. One of the worst summer trading periods for retailers in years could force them into desperate measures to try and coax hamstrung consumers – who continue to reel from the impact of the Government’s austerity measures and rising inflation on their household disposable incomes – back into shops. The latest BDO survey found that the High Street recorded its worst sales in two years in August, while today’s British Retail Consortium sales figures are expected to be even worse. Retailers face tens of millions of pounds in costs and losses following last month’s  disgraceful rioting, looting and arson across and beyond London. The UK weather has been awful too and the extremely volatile performance of the London stock market has left consumer confidence in tatters. Trading statements from several big names this week are expected to paint a depressing picture.



Kaliko and Ann Harvey fashion retailer Alexon
yesterday had to put itself up for sale. It waved the white flag after
warning that profits after sales failed to meet expectations in August.
Total sales for the half-year ending in July were down 8pc. The shares
crashed 2p to 5p.
Struggling department store Debenhams
shed 2.1p to 52.3p after yesterday’s early launch of its ‘new season
event’, in which tens of thousands of new lines have been slashed by up
to 25pc until Friday. Michael Sharp has now taken over as chief
executive from the retired Rob Templeman, who was brought in by private
equity owners when the group was requoted at 195p in 2006.
Marks & Spencer
fell 12.5p to a 52-week low of 302.4p, a level which dealers believe
cash-rich private equity players could see as very attractive. Superdry
fashion firm Supergroup declined 21p to 973.5p ahead of tomorrow’s first-quarter figures while Currys and PC World owner Dixons, which also reports tomorrow, cheapened 0.97p more to 11p.
 



FTSE CLOSE: Bank shares drop over lawsuit fears and the FTSE 100 falls 4%


Argos-to-Homebase group Home Retail shed
a further 9.3p to 115p on fears that Thursday’s trading statement will
show a further sharp sales fall at its catalogue business. Baby goods
retailer Mothercare gave up 15p to 343.7p.
As Wall Street remained closed for Labor Day, bulls in London were battered into submission. The Footsie plummeted 189.45 points to 5,102.58 and the FTSE 250 296.91
points to 10,084.11. Following on from Friday’s truly terrible US
employment figures, dealers had to contend with early depressing news
that the UK’s dominant services industry took its worse dive in 10 years
last month.
The eurozone debt crisis also reared
its ugly head again after the weekend losses handed out to Germany’s
leader once again threw into question the ability of the eurozone’s
biggest economy to ratify all the recent months’ bailouts.
Meanwhile, US litigation fears and
potential downgrades of the major banks by Moody’s – after the
controversial ratings agency warned it was ‘poised to downgrade the
creditworthiness of some of Britain’s biggest banks and building
societies’ – left the heavyweight sector nursing nasty falls.
Part-nationalised Royal Bank of Scotland,
which is facing a potential £3.7bn lawsuit from the Federal Housing
Finance Agency in the US over claims related to the sub-prime mortgage
scandal, slumped 3.06p or 12.3pc to 21.78p. Lloyds Banking Group, 41pc-owned by the UK taxpayer, fell 2.47p to 30.65p, while Bob Diamond’s Barclays relinquished 11.05p to 154.15p.
Reflecting the deteriorating trend, Legal & General dipped 6.35p to 94.55p and Prudential 32.5p to 564.5p.
Continuing concern about trading saw pubs group Enterprise Inns close as flat as a pint of homemade scrumpy at a 52-week low of 34.91p, down 3.48p.
Helped by the buoyant gold price, which touched $ 1,900 an ounce again, and a buy recommendation from Evolution Securities, Cluff Gold
added 0.75p at 96.5p. The company has increased its gold resources at
the Baomahun deposit in Sierra Leone by 480,000 ounces, or 20pc. Noricum Gold
firmed 0.375p to 3.375p after announcing significant gold resources
from the first phase of drilling at its Kliening gold project in
Austria.
Profit-taking after better-than-expected interim results left Titan Europe
8p easier at 112p. Broker Killik is bullish and said the maker of
wheels and vehicle undercarriages saw revenue growth across all Titan’s
end markets: agriculture by 31pc, construction by 45pc and mining by
102pc. It sees risks to forecasts as being very much on the upside.
Celebrating its largest commercial software agreement to date, shares in DDD jumped 3p to 29p.
The 2D-to-3D image conversion
specialist has signed a five-year licence agreement with a ‘leading PC
maker’  that will see DDD’s TriDef software, which allows computer games
to be played in 3D even when they have not initially been developed for
the purpose, bundled with the manufacturer’s new line of products.