THE TIPSTER
THE UK retail sector is having a torrid time (see page 1) and Habitat’s move into administration at the end of last week was a major blow. The brand was huge in the 1980s, but the advent of companies such as IKEA really heaped on the pressure. It has therefore been a surprise for some that Home Retail has waded in to pick up the name – along with three prime stores – for £25m. It has already admitted the venture will be marginally loss making in year one, although clearly the prospects of efficiencies and a wider product range has enthused the management. IG Index offers a price on Home Retail of 157.8p-158.3p.
Retailer Carpetright is releasing figures tomorrow. It is difficult to have high expectations for it as it has already stated on more than one occasion that trading conditions are tough, profit expectations have been lowered, and group sales are down.
The fact that UK retail sales have declined and raw material prices are going up really doesn’t bode too well for it and that its business activity in Europe is on the downturn adds to the negative outlook. Capital Spreads quotes 686.0p-691.0p for Carpetright.
Lloyds and RBS took a beating again last Friday after Nick Clegg announced that the government was considering giving away its stake in the bailed-out banks to the general public. Lloyds fell to lows not seen since March 2009 of 43.30p, down over 10 per cent on the week, while RBS fell to 15 month lows of 35.6p, down 11 per cent on the week. From a technical point of view, RBS looks more vulnerable as a break of 35p could well see it tumble to 30p. Lloyds will be hoping for some support around 40p to halt its slide. Spread Co offers a spread on RBS of 35.77p-35.84p and a spread of 43.32p-43.40p on Lloyds.