Blackfriar: Troubled retailers getting the shorted end of the stick

Like or loathe the John Lewis TV advertisement featuring the cutesy seven year old boy counting down the days until he can give his parents their Christmas present, the department store chain is doing something right.

Like-for-like sales in the five weeks to December 31 rose an impressive 6.2 per cent. Few other retailers can claim such growth.

Next has ridden the downturn supremely well, but said sales were disappointing during November and December amid fears that the euro zone crisis is damaging consumer sentiment.

Next did not break out like-for-like sales figures for the period between August 1 and December 24, but total store sales fell by 2.7 per cent.

Analysts pencilled in a like-for-like sales drop of up to seven per cent.

It’s not good news for other clothing retailers such as market leader Marks & Spencer, which reports on festive trading next week.

Overall Next and John Lewis are likely to emerge as festive winners, but the question is who will be the losers?

With unemployment at a 17-year high and confidence at a 34-month low, fears are growing of a wave of retail failures equivalent to that which saw Woolworths go under three years ago.

Short sellers – stock market risk takers who bet on which shares will be the ones to fall in the future – are circling a number of retailers.

Number crunchers Data Explorers said retailers now account for six of the top 10 most shorted FTSE All Share stocks.