skip to Main Content
 

US retailers shed $50bn ahead of Black Friday

*

We are used to seeing doom and gloom on our own high streets but with US retailers shedding $50bn in market value yesterday, it’s not all rosy stateside either. 

Gloom from retailers like Gap, L Brands (owner of Victoria’s Secret) and bookshop chain Barnes & Noble contributed to a 3.4% fall in the S&P Retail Index yesterday. Companies that are feeling pretty confident for the season didn’t manage to escape the pummelling either.

This is obviously a hot topic as we head towards Black Friday – and it seems that it’s not just UK retailers who are feeling nervous at the beginning of the holiday season. Target, Kohl’s and Ross Stores all fell by around 10% in trading as Gap personified the gloom by saying that it was reviewing its store portfolio for closures.

Naysayers are worried about the effects of rising wages because of a tight labour market, narrower margins (an attempt to stay competitive with e-tailers like Amazonand higher freight costs as well as potentially high levels of inventories that will have to be sold off at a discount in the coming months.

I think that there is definitely upside risk to both UK and US retail stocks as the majority seem to be fearing the worst.

Like this article? Sign up to our free newsletter.

This article does not constitute investment advice. Do your own research or consult a professional advisor.

The Armchair Trader's 'How to' Guides

In-depth Reports

Detailed reviews of selected companies and investment trusts.

Thanks to our Partners

Our partners are established, regulated businesses and we are grateful for their support.

Aquis
FP Markets
IG
Pepperstone
WisdomTree
CME Group
Back To Top