Dec 17, 2018
Asos profit alert punishes retail sector
Dec 17, 2018
UK shares were lower on Monday as online fashion store Asos' profit warning dragged retailers lower, reinforcing woes about slow sales during the busy holiday season amid continued caution about the UK's divorce from the European Union.
The UK blue-chip bourse was down 0.2 percent at 0900 GMT, while the mid-cap index was down 0.2 percent.
The alert from AIM-listed Asos set the tone for the market after the company lowered its full-year margin and sales growth forecasts as November trade fell short of expectations.
The shares plunged nearly 37 percent to its lowest in three years, wiping 1.3 billion pounds of the company's market capitalisation.
Among big fallers on the main index were high street retailers Next and Marks & Spencer , down 8.3 percent and 4.4 percent respectively.
Asos rival Boohoo fell as much as 18 percent at the open, before recouping some losses after it reported record Black Friday sales. It was last down 9.8 percent.
High street chains were also the biggest drags on the mid-cap index, with JD Sports Fashion dropping nearly 4 percent and Sports Direct losing 3 percent.
Europe's retail sector fell 1.3 percent, the worst-performing and hitting its lowest level since July 2016.
Shares in Zalando , a German rival of Asos and Europe's biggest online retailer, fell 16.8 percent, the biggest STOXX 600 fallers. The selling had wiped 1.3 billion pounds off Asos' market cap and 1 billion euro off Zalando in the first 30 minutes of trading.
Swedish retailer H&M fell 3.8 percent despite reporting in-line sales figures, as the Asos stress spread. Next and Marks & Spencer fell 3.7 percent and 2.4 percent.
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