High street retailers' shares suffered in morning trading after Debenhams posted a lukewarm outlook.
The department store's like-for-like sales edged up 0.9 per cent for the 15 weeks to the middle of June, but its shares fell after it admitted the trading environment on the UK high street has become "less predictable".
The gloomy update caused Debenhams shares to fall 4.5 per cent to 43p, and it seems the retailer is dragging down its high street neighbours with it.
At time of writing:
- Marks and Spencer's shares had fallen 2.21 per cent to 335p, making it one of the biggest fallers on the FTSE 100 in morning trading.
- Next's share price slipped 0.85 per cent to 3,966p.
- DFS' share price was down 0.72 per cent at 206p. Earlier this month, the furniture retailer issued a profit warning.
George Salmon, equity analyst at Hargreaves Lansdown, said: "The new CEO [Sergio Bucher]'s strategy, namely to improve the online offering, declutter the stores and step up the quality of the in-store service, seems sensible.
"However, Debenhams has struggled for years. Particularly in these difficult times, we feel investors should remember that it's one thing to correctly diagnose the problem and quite another to successfully apply the cure.”
Not all retail sectors are suffering, however. Figures out today from Kantar Worldpanel showed supermarkets have notched up the strongest growth since March 2012 over the past three months, and traders have responded positively.
Tesco's share price has climbed 1.29 per cent to 168p, while Morrisons' shares were up 0.12 per cent at 241p.