This year’s Christmas retail winners and losers

November 23, 2009 5:10 pm by Lucy Warwick-Ching

It’s official, JJB Sports and Topps Tiles tops this year’s list of Christmas retail losers.
Latest analysis by financial website The Motley Fool, reveals that for those companies that are saddled with excessive debt, hampered by declining sales and burdened with low valuations, it could be a make or break Christmas.

On their own, falling sales, low market value and mounting debt are not a problem. But together they can form a lethal cocktail that can quickly turn a retail high-flyer into a back street has-been.

The Motley Fool’s analysis uncovers ten retail winners and losers listed on the London stock market.

Fastest Shrinkers – Their days are numbered

Sales at JJB Sports are forecast to shrink 42% next year. Coupled with net debt of £30 million and a market value of £200m, JJB tops our list of exposed retailers. Motors dealer Pendragon looks vulnerable too. Its net debt is twice the size of the value of the business and car sales are expected to fall by a quarter.

Sales at Findel, which owns household goods distributor Kleeneze, are only expected to fall modestly. But net debt of £171m is more than twice the size of the business. Debts at Britain’s biggest tile and wood flooring specialist Topps Tiles also look onerous. What’s more sales are dropping too.

Fastest Growers – The world at their feet

Despite challenging times for many online retailers, Asos holds the top spot for the fastest-growing retailer this year. With sales predicted to grow 61%, £13m of net cash and a market value of almost £300 million, Asos appears immune to the fashion industry’s woes. Cash-rich JD Sports Fashion and Laura Ashley are in enviable positions too.

Highly indebted Debenhams may be one of this year’s Christmas surprise winners. Despite net debts of almost £600 million, which is more than half the value of the business, rising sales may be the salvation for the embattled department store owner.

The reason these figures matter is because because festive trading can account for over half of these companies annual sales.

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