The City today tipped Asos, Boohoo and a clutch of discount retailers as early winners in the crucial Christmas trading period.
The main victims of a squeezed consumer wallet — down to rising inflation, falling disposable income and weak consumer confidence — could be mid-market fashion businesses as well as department stores including troubled Debenhams and House of Fraser. The store-based business model is “threatened”, said Paul Martin of KPMG.
Although shoppers are likely to have spent less this Christmas, online retailers and those who combine online and store operations smoothly are expected to have done well, analysts at Jefferies said today. They also lauded the prospects for discount retailers.
Deutsche Bank analysts have upgraded clothing websites Asos (pictured) and Boohoo to buy from hold while general merchandise chain B&M is one of the bank’s top picks.
High Street bell-wether Next, which kicks off Christmas trading updates tomorrow, is expected to post another set of sluggish figures after a troubling year. In March, it posted its first drop in annual profits since the recession with a 3.8% fall to £790 million. High Street companies face another troubled year as shoppers spend prudently, with most woes failing to ease off.
