Inspections provide relief to Boohoo
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.