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Summary
- UK-based high-end department store John Lewis said it may have to close more stores after reporting a record loss of £517 million in FY2020 due to lockdown restrictions.
- 3 FTSE stocks -- Marks and Spencer, Next and Kingfisher Plc with YTD of over 7 per cent in focus
The UK retail sector is one of the worst hit due to the pandemic and lockdown restrictions. The scenario has not much changed even after the UK came out of the third lockdown. On Thursday, British high-end department store John Lewis said it may have to close more shops after reporting a record loss of £517 million in FY2020 due to lockdown restrictions.
The company reported a pre-tax loss of £517 million in FY 2020, compared to a profit before tax of £146 million the year before. It said that in 2021, things can be worse due to continued restrictions, restructuring, and redundancy costs, which would mean closing of more stores in the coming months.
According to media reports, John Lewis is planning to cut £300 million in costs by 2022/23, and also contemplating to invest £800 million this fiscal to report a turnaround.
Here we take a look at other high street retail stocks such as Next (LON: NXT), Marks and Spencer (LON: MKS) and Kingfisher PLC (LON: KGF) and see how they have performed.
Copyright © 2021 Kalkine Media Pty Ltd.
Next (LON:NXT)
The FTSE 100-listed retail giant Next (LON:NXT) announced plans to acquire up to 25 per cent stake in its retail competitor Reiss Ltd for an estimated £200 million deal size on Wednesday for a strategic partnership.
Next’s market cap stood at US $10.11 billion and a price-to-equity ratio of 29.62, while its YTD return was at 7.24 per cent as on Thursday. The company’s shares were trading at GBX 7,612.00, up by 0.66 per cent as of 11 March at 13:12 hrs GMT+1. The broader index FTSE 100 was flat at 6,725.74.
Marks and Spencer (LON:MKS)
FTSE 250-listed retail giant Marks and Spencer (LON:MKS) reported plans to sell up to 11 brands of its competitors to boost its online shopping presence. It will include brands such as Hobbs, Jack & Jones, Joules, Phase Eight, Seasalt, and others. The move comes days after the company said it will launch 46 websites in new regions thus increasing its online presence to up to 100 countries.
Marks and Spencer’s market cap stood at US $3.06 billion, while its YTD return was at 13.81 per cent as on Thursday. The company’s (LON:MKS) shares were trading at GBX 155.82, down by 0.60 per cent as of 11 March at 13:27 hrs GMT+1 while the FTSE 250, which the stock is a part of, stood at 21,480.43, up by 0.35 per cent.
Kingfisher PLC (LON:BME)
Another FTSE 100-listed company, home improvement retailer Kingfisher PLC (LON:KGF) announced a franchise deal with Al-Futtaim Group on 9 March to expand its footprint in the middle east. Two stores are expected to be launched in Saudi Arabia in autumn of this year.
Kingfisher’s market cap stood at US $6.27 billion with a PE ratio of 40.69, while its YTD return was at 9.25 per cent as on Thursday. The company’s (LON:KGF) shares were trading at GBX 295.40, up by 0.27 per cent, on 11 March at 13:30 hrs GMT+1. Comparatively, the UK retail industry index stood at 2,647.96, up by 0.81 per cent.
