Hedge funds betting on further woe for retailers

HEDGE funds are betting on further falls in the share prices of some of Britain’s best-known retailers, according to new data from Data Explorers.

Hedge funds and other investors borrowed large amounts of retailers’ shares in October, allowing them to sell the stock when the price declines and pocket the difference.

From electricals seller Dixons Retail to fashion chain Next, retailers have 3.5 per cent of their shares out on loan on average – twice as much as the 1.77 per cent on the entire FTSE all-share index.

“Despite the share price recovery in October, short sellers remain sceptical about retailers,” said Data Explorers research director Will Duff Gordon.

Mid-market groups battered by falling consumer spending have fared worst, with about nine to 14 per cent of their shares out on loan.

But even the most high-profile are not immune: M&S has more than four per cent of its shares on loan

Dixons, which operates as Currys and PC World, tops the list with 14.19 per cent of its shares on loan. Its stock has lost 60 per cent of its value in the past year as sales of electronics and white goods have slumped.

Carpetright has 13.57 per cent of its shares out on loan after five profit warnings in a year.