In­spec­tions pro­vide re­lief to Boohoo

The Daily Telegraph - Business - - Business - Louis ashworth

FAST-FASH­ION re­tailer Boohoo en­joyed some­thing of a bounce­back af­ter early in­spec­tions found no ev­i­dence of modern slav­ery at the group’s Le­ices­ter sup­pli­ers.

The Aim-listed firm jumped 61.6p to 286.1p, re­gain­ing some ground lost af­ter a 40pc plunge across the first half of the week. In a state­ment, the Gang­mas­ters and Labour Abuse Author­ity said that “of­fi­cers have not at this stage iden­ti­fied any of­fences un­der the Modern Slav­ery Act”, while the Na­tional Crime Agency said it “does not in­tend to give a run­ning com­men­tary” on its ac­tiv­ity.

The GLAA said it had not un­der­taken any enforcemen­t ac­tion dur­ing its visit to fac­to­ries in Le­ices­ter.

The rise of­fered some re­prieve for Boohoo, which has been thrown into a gov­er­nance cri­sis af­ter the Sun­day

Times re­ported work­ers were be­ing exploited at one of its sup­pli­ers.

HSBC an­a­lyst Paul Ross­ing­ton said the im­pact on de­mand from the scan­dal should be “lim­ited”.

“Boohoo tar­gets younger and less af­flu­ent cus­tomers who are in­flu­enced by so­cial me­dia,” he wrote. “It has proac­tively reached out to many ‘in­flu­encers’ to re­as­sure them in light of the sit­u­a­tion. We be­lieve that neg­a­tive in­flu­encer com­men­tary has been lim­ited to date and that Boohoo’s cus­tomers are gen­er­ally driven more by price, choice and new­ness.”

The jump made it one of the few big ris­ers on a poor day for Lon­don-listed stocks, with the FTSE 100 de­clin­ing sharply as sev­eral heavy­weight firms fell. Fresh fears for the global econ­omy sparked by a resur­gence in US coro­n­avirus cases weighed on en­ergy giants BP and Shell, down 13.5p to 290p and 43.8p to £11.81 re­spec­tively. They have been hit hard by a fall in de­mand for oil. Jet en­gine maker

Rolls-Royce was the big­gest blue-chip faller, drop­ping 31.5p to 256.3p af­ter say­ing it took a £3bn cash hit in the first half as a re­sult of the avi­a­tion shut­down prompted by Covid-19. It warned the shock of the pan­demic will hit its re­sults for the next seven years.

House­builder Per­sim­mon topped the ris­ers with a 156p climb to £25.89 – lift­ing other con­struc­tion groups with it – af­ter say­ing its reser­va­tions had bounced back strongly since lock­down re­stric­tions eased. Citi’s Ami Galla said the group’s post-lock­down trad­ing was “im­pres­sive”, adding the fo­cus “will re­main on the po­ten­tial to fur­ther ramp up con­struc­tion ca­pac­ity in an­tic­i­pa­tion of strong de­mand and scope for land mar­ket op­por­tu­ni­ties in the cur­rent back­drop”.

On the FTSE 250, Ham­mer­son dropped 9.2p to 77.8p as depart­ment store John Lewis an­nounced it would not re­open its flag­ship out­let at the shop­ping cen­tre owner’s Grand Cen­tral devel­op­ment in cen­tral Birm­ing­ham, leav­ing a 136,000 sq ft space to fill.

Of­fice space provider Workspace fell 16.5p to 610.5p de­spite re­port­ing signs of a recovery as cus­tomer en­quiries picked up.

It said de­mand im­proved dur­ing the three months end­ing June 2020. The group – which of­fered busi­ness cen­tre cus­tomers 50pc off for the three months to the end of June – said it had col­lected 75pc of rent due for the first quar­ter, equiv­a­lent to 41pc of the to­tal rents be­fore it made re­duc­tions.

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