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Superdry, Monsoon and INTU at “most at risk of collapse due to COVID-19”, trader warns

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Superdry: one of a number of retailers under increasing threat?
Superdry: one of a number of retailers under increasing threat?
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With underlying problems pre-corona, Superdry, Monsoon and INTU are all at risk warns share trader analysis

Analysis of more than 20 of the UK’s businesses with existing historic problems such as a lack of consumer confidence, underinvestment and the inability to adapt digitally, has revealed that Superdry and Monsoon Accessorize, along with shopping centre owner INTU could all fall victim to lockdown economics.

 

The study, by stock market and Forex traders platform AskTraders, fears that, as online sales have struggled for both retailers it could mean that the nation-wide shut down due to COVID-19 serves as a final blow for these two businesses. For INTU, rent reductions could also force it to fail.

 

Next, M&S, Ted Baker and Debenhams are all likely to survive the current situation, while Thorntons, WHSmith and Office are deemed ‘certain’ to live to fight another day.

 

According to AskTraders senior market analyst Nigel Frith, Superdry is most at risk. “Shares are down 11.69% and it is seeking additional financing to secure a recovery. Online sales are likely to slump and so it will struggle to survive,” he says.

 

Of Next and M&S, Frith says that “Prior to [Coronavirus pandemic], Next’s sales had been up 14% online, but as it seeks a buyer for Next HQ in order to raise the cash to protect its stores and with it having stopped online sales, the retailer has a 50/50 chance of survival. M&S, meanwhile, has reduced investment and delayed staff pay rises, so it could survive the impact COVID-19 has had on trading. However, as its share price drops down to 50% so far this year, could Coronavirus finish it off?”

 

Debenhams, meanwhile, will be “lucky to make it through the effects Coronavirus is having on our economy, although a rent break may help in the short term as the age of the department store seems to be ending”, says Frith.

 

More positively, Frith says that “with 40% of stores still open, WHSmith may be able to ride this epidemic out with immediate rebounds in sales as normality resumes”.

 

In the wider economy

Looking more widely at the High Street, Frith predicts that the next high street brand to go under will be restaurant chain Frankie & Benny’s, as its parent company, The Restaurant Group, shrinks its brands down to just Wagamamas.

 

“Closures of Franky & Benny and Chiquito will be speeded up, with these two likely to disappear completely, because they hit it the crisis in a bad position to start with,” he says. “There is still a future for Wagamama on UK high street sales were strong there prior to lock down,so Wagamama is likely to bounce back.”

 

Poole high-street set to be the worst hit

Previous research by AskTraders on the demise of the high-street revealed which 20 towns in the UK had a struggling retail sector. The analysis used open data on closures of ATM’s retail stores and banks to reveal which town had been hit the hardest.

 

This research now shows which UK towns are going to be the ones struggling the most due to COVID-19 lockdown impacting store closures and the rest of the high-street. The data revealed that Poole is the home to the most declining high street in the UK followed by Blackpool and Warrington.

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