Ted baker shares slump
Oof! Shares in fashion retailer Ted Baker are being hammered, down 35% at one stage this morning.
The City is alarmed by this morning sudden departure of both CEO Lindsay Page (a company veteran) and chairman David Bernstein. The news that pre-tax profits might dwindle to just £5m, from £50m last year, is another hefty blow.
Retail analyst Nick Bubb says today’s trading update is “dreadful”:
Well, after yet another profit warning, it will cost a lot less to buy Ted Baker now and take it private, but Ray Kelvin could be forgiven for having second thoughts, given the mess the business is in.
Kelvin, the firm’s founder, was ousted after staff reported they were forced to hug him, sit on his knee or let him kiss their ears.
The London stock market has started the day on the wrong foot, as investors await October’s UK GDP report.
The blue-chip FTSE 100 index has shed 65 points, or 0.85%, in early trading to 7,173 – back towards last week’s two-month lows.
The smaller FTSE 250 index is also weaker, down 0.7%.
Other European indices are also in the red, amid anxiety over the US-China trade war. Unless there’s a breakthrough soon, America could impose fresh tariffs on Sunday.
With the UK’s future as murky as the clouds blanketing the country, people appear to be delaying their Christmas preparations.
New figures show that Britain’s big four supermarkets all suffered a drop in sales over the last 12 weeks, suggesting consumers are being cautious. This boosted Germany’s discounters, with Aldi and Lidl growing their market share to 14.1%, according to researchers at Kantar.
Overall, sales growth slowed to just 0.5% over the last three months.
Kantar says:
“Amid the uncertainty of a (Dec. 12) general election, a lacklustre Black Friday and a wet autumn, shoppers have been delaying their Christmas preparations and are waiting to stock up on festive supplies.”
Introduction: UK GDP for October
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Today we get the final healthcheck on the UK economy before Thursday’s election, and it may not cheer the spirits.
Economist predict that growth was stagnant over the last three months, as political and economic uncertainty hurt business investment and consumer confidence.
The City predicts that GDP crept up by 0.1% in October alone – a month dominated by Boris Johnson’s failed attempts to rush his Brexit deal though parliament. But GDP has previously declined by 0.1% in both August and September,
Recent economic data has shown that Britain’s service sector was flat in October, while both construction and manufacturing output fell. Only a burst of growth in July helped the UK to avoid a full-blown recession over the summer.
A weak GDP report could cause some late drama in the UK election campaign. The City is still anticipating a Conservative victory, keeping the pound near a 31-month high against the euro at €1.188 this morning.
But there’s also edginess that the result could be closer than many opinion polls are expecting…
Also coming up today
The crisis at troubled fashion retailer Ted Baker has deepened this morning. The firm has slashed its profit forecasts, frozen its dividend and announced the immediate departure of its chairman and CEO.
Worryingly, it also warns investors that:
“Trading over November and the Black Friday period was below expectations, with lower than anticipated margins and sell through.
This kitchen-sinking comes nine months after founder Ray Kelvin was forced out over allegation of inappropriate behaviour.
Troubled German financial giant Deutsche Bank is holding a strategy day, where CEO Christian Sewing will be outlining plans to turn the firm around
The agenda
- 9.30am GMT: UK GDP for October: expected to rise 0.1% month-on-month
- 9.30am GMT: UK balance of trade for October: £11.65bn deficit expected, up from £12.54bn
- 9.30am GMT: UK manufacturing production for October: no growth expected, up from -0.4%
- 3.50pm GMT: IMF chief Kristalina Georgieva is speaking in Washington
Updated