LONDON (Reuters) - Shares in European retailers sagged on a profit warning from pan-European electricals goods company DSG International and a gloomy view of what 2008 has in store from British clothing group Next.
The DJ Stoxx retail index was 3.2 percent lower by 12:08 p.m., on Thursday.
Next warned the outlook for 2008 was “extremely cautious” as UK consumers face increasing demands on their finances from higher mortgage rates, weaker housing markets and soaring fuel prices, sending its shares down 7.9 percent.
“We need to prepare for a tough year in 2008,” Next Chief Executive Simon Wolfson said in a telephone interview.”
Hargreaves Lansdown analyst Richard Hunter said in a note that Next’s comments were understandable but not what the market wanted to hear.
“Along with the statement today from DSG, it seems that the festive cheer has already evaporated on the High Street,” the analyst said in a note.
Shares in DSG International slid 22.4 percent after slow sales of computers over Christmas sparked its profit warning.
Among other European retailers, Spain’s Inditex was down 1.9 percent and France’s Carrefour was 1.1 lower percent and Swedish fashion chain Hennes & Mauritz off 3 percent.
Other retail stocks were also hit with electrical goods retailer Kesa Electricals down 8.8 percent, household goods company Home Retail Group off 5.9 percent, department stores chain Debenhams down 5.3 percent and jeweller Signet Group 5.8 percent.
Reporting by Mike Elliott; Editing by Rory Channing