High St faces more agony in New Year as vul­tures circle

Daily Mail - - News - By James Bur­ton Chief City Cor­re­spon­dent

THE High Street’s big­gest names are un­der at­tack from vul­ture in­vestors as stores brace them­selves for a bleak Jan­uary – fol­low­ing what may be the worst Christ­mas for re­tail­ers on record.

Chains have been tar­geted by hedge funds hop­ing to profit from the cri­sis, amid grow­ing con­cerns that ma­jor firms will be forced to axe jobs and shut stores.

Ex­perts are warn­ing that 10,000 shops could shut in 2019, punch­ing holes in town cen­tres.

It comes af­ter vis­its to shops fell by 44 mil­lion com­pared to last De­cem­ber. A to­tal of 93,000 re­tail jobs have been lost this year, ac­cord­ing to fig­ures from the Of­fice for Na­tional Statis­tics. As many as 164,000 job losses could be in the pipe­line.

The im­pact will be heav­ily felt on High Street in­sti­tu­tions – but in­vestors are set to profit.

Marks & Spencer is now the most heav­ily bet-against busi­ness in the blue chip FTSE 100 in­dex, as it is ex­pected to re­veal dis­mal sea­sonal sales fig­ures next month.

A to­tal of 11.2 per cent of M&S shares have been short­sold by hedge funds – mean­ing they will make money if the price falls.

If the re­sults are bad it could trig­ger a sharp fall in the share price, net­ting mil­lions of pounds of prof­its for in­vestors in­clud­ing Eger­ton Cap­i­tal, a May­fair fund founded by Tory donor John Armitage.

M&S has al­ready an­nounced plans to shut 100 stores in a des­per­ate bid to sur­vive.

Mean­while, 10.3 per cent of Deben­hams shares have been short-sold, ac­cord­ing to data from the Fi­nan­cial Con­duct Author­ity watch­dog. Deben­hams, which em­ploys 26,000 staff at 182 stores, is be­lieved to be in dan­ger next month.

Bil­lion­aire Mike Ash­ley – who con­trols a 29 per cent stake in Deben­hams – warned: ‘The com­pany has a zero chance for sur­vival. There isn’t any good news out there.’

The first few months of the year are al­ways the hard­est for shop­ping firms as fam­i­lies rein in spend­ing af­ter a Christ­mas splurge. Re­tail­ers tend to rely on money dur­ing fes­tive trad­ing to get them through.

But in­sid­ers fear that Novem­ber and De­cem­ber have been deeply dis­ap­point­ing and many stores are now dan­ger­ously ex­posed with lit­tle money in the bank.

Many re­tail­ers blame sky­high busi­ness rates for mak­ing their predica­ment worse.

Firms shell out mil­lions of pounds a year in tax for their stores, many of which are now los­ing money as con­sumers head on­line in­stead. The Mail is cam­paign­ing for a fair tax sys­tem which lev­els the play­ing field be­tween bricks-and­mor­tar shops and web ti­tans such as Ama­zon.

The start of this year saw the col­lapse of Maplin and Toys R Us, while many other ma­jor firms went to the brink.

HMV be­came the lat­est ca­su­alty on Friday as it plunged into ad­min­is­tra­tion. Next is ex­pected to warn of low prof­its this week.

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