High St faces more agony in New Year as vultures circle
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.