Online retailer Boohoo latest to be hit by slump in retail
Shares in online retailer Boohoo slumped dramatically on Monday amid growing concerns over the state of consumer spending.
Manchester e-commerce firm N Brown also suffered with its shares falling by 16% by the close of play.
On the day that rival firm Asos issued a profit warning shares in the Manchester based retailer slumped by 14 per cent.
The AIM listed firm issued a trading statement in a bid to reassure the market but it appeared to have little effect.
Shares in Boohoo closed at £1.83 on Friday and they tumbled to £1.54 within a matter of hours of the markets opening.
The fall came even though Boohoo issued a trading statement shortly after 8am.
The statement said: “Boohoo group is pleased to confirm that the group’s trading performance remains strong, with record Black Friday sales across the group and continues to trade comfortably in line with market expectations.
“The group will provide an update for the four-month trading period to December 31st on January 15th 2019.”
Other retailers who saw their share price fall also included JD Sports and Next.
Asos shares fell as much as 43% Monday wiping more than £1.4bn off the firm’s market value.
Asos blamed weak consumer confidence and high levels of discounting for the poor performance.
Chief executive Nick Beighton said: “We achieved 14% sales growth in a difficult market, but in the http://www.thebusinessdesk.com/northwest/wp-admin/post-new.phplight of a significant downturn in November, we think it’s prudent to recalibrate our expectations for the full year.
“This is just a bump in the road for Asos, we are taking all appropriate actions and our ambitions have not changed.”
The news comes on top of an investigation by BBC Watchdog Live which alleged that the Boohoo broke advertising rules regarding time-limited promotions.
Until now it had been assumed that online firms have been immune from the problems facing high street retailers.
A string of household names have been forced into drastic action over the course of the last 12 months with several being forced into administration.
High profile victims of the crisis on the high street include House of Fraser, Debenhams, New Look and Mothercare.
Sports Direct owner Mike Ashley last week described the month as “the worst for retailers in living memory”.