UK Retail companies and the Economic slowdown

Leading indicators are signs or economic events that are fore runners of an impending economic event like an economic slowdown or an economic revival. These signs are studied extensively in academia and industry to forecast impending economic events, to determine its shape and depth and also to suggest ways how to best deal with it. In the past several months there have been several such signs that were indicating towards a slowdown in the British economy and even the European Union at large on account of the ill effects of Brexit. However, towards the end of October 2019 several of such downward trending indicators started showing signs of stability. To know that an economy is on the recovery path however, there have to be signs or leading indicators that point towards improving of circumstances before we can be sure that we are finally coming out of the woods.

One of the leading indicators that points towards the start of a revival process in an economy is the performance of the country’s retail sector. The Retail sector, among all sectors of the economy, has a unique character and is differentiated from all other sectors of the economy in many respects. First, a significant amount of business that is carried out in this sector is in cash; second the cash conversion cycles or the number of times it is able to convert their stock into cash in a year is very high compared to other industries and third and most important, this industry mostly deals with consumer durables and consumer essentials giving it a very high consumer footfall. The industry though not seen as a strong leading indicator of an economic downturn, but sales usually boom for the industry in times of economic recovery and it signifies improving consumer sentiments coupled with a sudden release of pent up consumer demand. Below is a list of five retail companies that are promising amongst the value creators in 2020 and beyond.

Boohoo Group Plc – Boohoo Group Plc (LON: BOO) is a United Kingdom domiciled fashion apparel retailing company. The company is christened among the top online fashion retail company in the United Kingdom, including having a global footprint, outside of the United Kingdom in Europe, Australia and in The United States of America being its primary markets. The company products are targeted towards customers in the age group of 16-30 years and its topline brands are Boohoo, PrettyLittleThings, NastyGal and boohooMA .

The shares of the company are listed for trading on the London Stock exchange. Here they trade with the ticker name BOO on the Alternative investment Market (AIM) segment.

Performance at the London Stock Exchange

Source – Thomson Reuters 

At the time of writing of this report on 2 December 2019, the shares of the company were trading at GBX 303.30

During the past 52-week period at the London Stock Exchange, the shares of the company have registered a 52-week high of GBX 316.90 and a 52-week low of GBX 146.39. The shares of the company on the exchange have a market capitalization of £ 3.67 billion.

Next Plc – Next PLC (LON: NXT) is a Leicester, United Kingdom-based multinational retailer. The company, through more than 500 stores in the UK and Eire and around 200 stores in 40 countries overseas, seeks to offer excellent quality clothing and homeware at affordable prices. The group offers products through brick and mortar stores, online services as well as mail-order operations. The group was incorporated in April 2002 and is a constituent of FTSE 100 index

The shares of the company are listed for trading on the London Stock exchange. Here they trade with the ticker name NXT on the main market segment.

Performance at the London Stock Exchange

Source – Thomson Reuters 

At the time of writing of this report on 2 December 2019, the shares of the company were trading at GBX 6,678.00

During the past 52 week period at the London Stock Exchange the shares of the company have registered a 52 week high of GBX 6,976.00 and a 52 week low of GBX 3,970.00. The shares of the company on the exchange have a market capitalization of £ 9.00 billion.

ASOS Plc – ASOS Plc (LON: ASOS) is a United Kingdom domiciled online fashion and cosmetic retailer with an active presence in the United Kingdom, the United States of America and in Continental Europe. Apart from being a fashion company, the company also calls itself a technology company and is one of the leading fashion stops for 20-somethings globally. Around 60 per cent of the products sold are exclusively sold on its platform, and the company operates its own brand of clothes as well. The company’s operations are differentiated in three operating segments: Retail sales, Delivery receipts and Third-party revenues.

The shares of the company are listed for trading on the London Stock exchange. Here they trade with the ticker name ASOS on the Alternative investment Market (AIM) segment.

Performance at the London Stock Exchange

Source – Thomson Reuters 

At the time of writing of this report on 2 December 2019, the shares of the company were trading at GBX 3,119.00

During the past 52 week period at the London Stock Exchange the shares of the company have registered a 52 week high of GBX 5,168.00 and a 52 week low of GBX 2,033.00. The shares of the company on the exchange have a market capitalization of £ 2.68 billion.

Marks & Spencer Group Plc – Marks and Spencer Group PLC (LON: MKS) is one of the UK’s leading retailers and is headquartered in London, the United Kingdom. The company operates Food, Clothing & Home and other retail businesses using the M&S own-brand model, and though it is primarily based in the UK, it sells into 57 countries from 1,463 stores and 20 websites around the world, making the company one the biggest and well-known clothing brand in the world. The operating segments are the UK, which comprises Clothing & Home revenue and Food revenue, and International, which comprises Franchised and Owned.

The shares of the company are listed for trading on the London Stock exchange. Here they trade with the ticker name MKS on the main market segment. The shares of the company also form part of the FTSE 250 index.

Performance at the London Stock Exchange

Source – Thomson Reuters 

At the time of writing of this report on 2 December 2019, the shares of the company were trading at GBX 189.95

During the past 52-week period at the London Stock Exchange the shares of the company have registered a 52-week high of GBX 292.86 and a 52-week low of GBX 161.35. The shares of the company on the exchange have a market capitalization of £3.79 billion.

Dunelm Group Plc–  Dunelm Group Plc (LON: DNLM) is a, United Kingdom domiciled multichannel homewares retailer headquartered in Leicestershire, which provides a leading range of quality, great value products for all customer groups. The group is a leading homewares retailer in the United Kingdom, offering its products through 170 superstores, three high street stores and its website. The company boasts its own delivery fleet to complement the online operations, which features extended ranges and delivery convenience (Reserve & Collect and Home Delivery) via multi-device functionality, serving over three and a half million customers at stores and websites each week. The company also offers Made to Measure curtains and blinds fittings, including home fitting, and has a nationwide stores coverage including Northern Ireland, with support centers in Leicester and London

The shares of the company are listed for trading on the London Stock exchange. Here they trade with the ticker name DNLM on the main market segment. The shares of the company also form part of the FTSE 250 index.

Performance at the London Stock Exchange

Source – Thomson Reuters

 

At the time of writing of this report on 2 December 2019, the shares of the company were trading at GBX 827.30

During the past 52-week period at the London Stock Exchange the shares of the company have registered a 52-week high of GBX 956.52 and a 52-week low of GBX 464.60. The shares of the company on the exchange have a market capitalization of £ 1.72 billion.