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June 2, 2015

Sussex & the City: Retail news comes to the fore in a week when FTSE falters on continued Greece worries


in Research

Leading shares have recently drifted lower as the Greek stand-off continues and the US announced disappointing economic data, however some retail shares have bucked the trend.

Primark’s expansion into the US has excited some analysts that think such a move could add £720m to group earnings by 2020. Despite failed attempts by other British retailers to cross the Atlantic, Primark, which has over 160 stores in the UK, including a number in Sussex, acquired the leases to seven stores from US retailer Sears last year and plans to open them by the end of 2016. Associated British Foods, the owner of discount fashion retailer Primark, hit recently by concerns about its sugar business and the effect of the strong dollar enjoyed a welcomed boost in its share price.

Another retailer that can be found on local high streets, Sports Direct, raced to the top of the FTSE 100 charts after raising its full-year profit outlook and earnings per share, beating market expectations. Analysts highlighted the strengths of the sportswear retailer as scope for expansion, growth trajectory and its control over margins, inventory and route to market.

Kingfisher also joined the upward trend after it posted a rise in first-quarter profit thanks to a strong performance by Screwfix. However, sales at the group’s B&Q outlets in the UK and Ireland slid a little as sales of seasonal outdoor and building products fell in comparison to the previous year.

Local high-street brand and mobile operator giant, Vodafone, pleased the market by returning to organic quarterly growth for the first time in three years. The company also announced a multi-million network investment on the South coast.

Cineworld put in a good show after some blockbuster results. Analysts highlighted the stock’s outperformance since reaching a low-point in mid-October and pointed to growth potential in Europe.