“Club of Knowledge Hunters”

U.K. Retailers Gain on Unexpected Retail Sales Rise

Posted by superstar23 on September 19, 2008

Marks & Spencer Group Plc, the largest British fashion retailer, and competitor Next Plc rose in London trading after clothing and footwear led an unexpected increase in U.K. retail sales last month.

London-based Marks & Spencer climbed 2.3 percent while nearest rival Next advanced 3.7 percent.

Retail sales increased 1.2 percent in August as stores attracted shoppers with promotions on garments and shoes, the Office for National Statistics said today. Economists had forecast a 0.5 percent decline, according to the median of 27 estimates in a Bloomberg News survey. Sales of textiles, clothing and footwear increased 4.1 percent from July as prices declined 2.5 percent from a year earlier, the figures showed.

The rise “is unlikely to represent a recovery” and will probably be a one-off occurrence, Tarlok Teji, head of retail at Deloitte & Touche LLP in London, said in an e-mail. “Retailers have been smart and taken advantage of the back-to-school period when consumers need to buy new clothing and shoes.”

Prices of clothing and footwear have shown an annual decline every month since July 2007, the statistics office said. Sales at household goods stores also rose, with a gain of 1.7 percent.

Marks & Spencer rose 5.25 pence to 232 pence. The stock has dropped 59 percent this year as higher food and energy costs leave shoppers with less to spend on clothing, affecting sales.

Next advanced 40 pence to 1,112 pence, trimming this year’s drop to 32 percent. N Brown Group Plc, the owner of U.K. mail- order catalogs Fashion World and Simply Be, climbed 22.75 pence, or 11 percent, to 231.75 pence, leading gains in the FTSE 350 General Retailers Index.

Kingfisher Plc, Europe’s largest home-improvement retailer, was the third-biggest riser in the 18-member index today after saying reduced discounting and lower costs led to a smaller drop in first-half profit than analysts’ had estimated. The stock rose 11.6 pence, or 9.7 percent, to 131.4 pence.

source:-Bloomberg news


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