DB Live: Boohoo dropped; Ineos car doubt; Halfords bike surge
The Dow Jones Industrial Average was down 1.5%, nearly 400 points, while the S&P 500 fell 1.1% and the tech-heavy Nasdaq Composite lost 0.9%. The Nasdaq claimed another record intraday high before ending down on the session.
6.30pm: Boohoo clothing dropped
Next and Asos have dropped Boohoo clothing from their websites after claims that the fast-fashion retailer sold clothes made in factories where staff were paid less than the minimum wage and worked in poor conditions.
Boohoo has seen more than £1 billion wiped from its share value in the past two days after an article in The Sunday Times alleged that workers in a Leicester factory making clothes destined for Boohoo were being paid as little as £3.50 an hour.
Other online retailers, including Zalando and Very.co.uk, have also temporarily suspended the sale of Boohoo items.
4.45pm: Market close
London stocks closed sharply lower, as the European Commission slashed its growth forecasts, with concerns about a rise in new coronavirus cases continuing to weigh on sentiment
The FTSE 100 ended the session down 1.53% at 6,189.
3pm: Ineos car plant doubt
Industrial tycoon Sir Jim Ratcliffe may scrap plans to build his new Grenadier off-roader in south Wales and is looking at buying a Mercedes-Benz factory in France instead.
The factory in Bridgend had been expected to create up to 500 jobs, providing a boost to automotive workers just as Ford closes its engine plant in the town with the loss of 1,700 roles.
But now Ineos Automotive, which is part of the chemicals empire controlled by Grangemouth owner Sir Jim, has revealed that it is in talks to buy the Hambach site in Moselle which is being sold by Mercedes-Benz.
8.15am: London open
The FTSE 100 fell back as investors as investors considered conflicting pressures of economies reopening and worries about a second wave of coronavirus.
The blue-chip index was trading at 6,221.23 , down 64.71 (1.03%).
8am: Trustpilot jobs
A Danish company setting up an Edinburgh branch of its website review platform aiming to improve trust in business has received mixed reviews on its own performance.
7.15am: Archangels funds
The Edinburgh-based business angel investment syndicate, Archangels, has led investment of £3.3 million in portfolio companies during the Coronavirus lockdown, it said in newly-released figures.
7am: Halfords: bike sales soar
Bicycle sales rose 57.1% on a like for like basis in the 13 weeks to 3 July, significantly boosted by the avoidance of public transport, favourable weather conditions and increased adoption of cycling as a health and leisure activity.
There has also been a 41.9% surge in LFL revenue from cycling repairs in the 4 weeks to 3 July. Performance in cycling business, Tredz, has also traded very strongly, up 87.3% year-on-year on a LFL basis.
However, motoring revenue was down 45.4% LFL, reflecting a material drop in car journeys across the UK.
Autocentres business grew strongly, boosted by the acquisitions of both McConechy’s and Tyres on the Drive.
“We expect a shift towards commuter bikes, as people return to workplaces and cycling infrastructure improves, and we expect bike servicing and repairs to become more in-demand as consumers take advantage of the Government’s voucher repair scheme,” said the company.
Group sales for the 13 weeks to 3 July were 2.8% below last year and 6.5% on a LFL basis, significantly better than anticipated in late-March and an improvement on the 23% LFL decline for the four weeks to 1 May.
Reach: job cuts
Daily Record owner Reach is to cut 550 staff (12% of its workforce) following a sharp plunge in income.
JD Sports: review
The sports leisurewear company says it is justified in making an application for Judicial Review to the Competition Appeal Tribunal following the decision by the Competition and Markets Authority to order it to sell Foot Asylum.
“This procedure will run in parallel with the CMA’s divestment process. In the meantime, we continue to observe the CMA’s ongoing enforcement order which obliges us to operate the Footasylum business separately.”
In the year to 1 February the firm reported a record headline profit before tax and exceptional items by a further 24% to £438.8 million (2019: £355.2m).
Revenue increased by 30% to £6.1 billion (2019: £4.7bn).
Whitbread: Q1 down
Whitbread first quarter sales plunged 79% as the COVID-19 lockdown saw most of its hotels in Britain and Germany closed, but the Premier Inn owner said it expects most of them to open by the end of July.
The company, which has reopened more than 270 hotels in the UK, said it was too early to draw conclusions. The company, however, said demand for its hotel rooms in tourist destinations are holding up well while demand in other areas including London remained subdued.
The FTSE 100 is expected to make a tentative start to the session, having jumped 128.64 points higher on Monday to 6,285.94.
Overnight in New York, the Dow Jones Industrials Average closed 459 points, or 1.8% higher, while the broader S&P 500 index added 1.6% and the tech-laden Nasdaq Composite gained 2.2% following a sharp rebound in services industry activity in June.
Asian stocks were mixed, with Shanghai’s blue-chip index leaping 1.7% higher amid speculation China is trying to orchestrate a major domestic bull run.
Japan’s Nikkei was down 0.6%, while Hong Kong’s Hang Seng index pushed 0.1% higher.
Corporate news will be focused on consumer activity over the coronavirus lockdown, with final results from retailers JD Sports Fashion and Halfords Group. Premier Inn owner Whitbread and the Daily Record owner Reach will give updates.