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UK retail stocks: sale on
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January 11, 2001: 9:48 a.m. ET
Shares of Matalan, GUS and Next at discount prices after Christmas reports
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LONDON (CNNfn) - A batch of disappointing sales reports by retailers showed it was a decidedly mixed shopping bag for European stores at Christmas, leaving several stocks reeling.
In London, shares of discount retailer Matalan (MTN) plunged 36 percent, home-shopping company Great Universal Stores (GUS) shed 13.8 percent and clothing vendor Next (NXT) fell 2.5 percent after each company reported latest sales numbers.
That contrasted with an upbeat statement a day earlier for electronics retailer Dixons Group (DXNS), which rose about 11 percent on Wednesday after reporting unexpectedly strong first-half income. Dixons fell 1.8 percent Thursday. 
"You can't get a global picture ... you have to look at it on a case-by-case basis," said Ian McDougal, a U.K. retail industry analyst at brokerage Williams de Broe.
McDougal said he expects the picture to remain divergent, but highlighted next Tuesday as a key day for industry watchers, with bulletins expected from U.K. heavyweights such as diversified retailer Kingfisher PLC (KGF), drugstore chain The Boots Co. (BOOT) and supermarket operators Safeway PLC (SFW) and Somerfield PLC (SOF).
"Tuesday is a huge day," said McDougal.
GUS, owner of the Argos chain of catalog stores and fashion house Burberry, said a weakening U.S. economy hurt sales there. The company said Argos's like-for-like revenue – sales from stores that had been open at least a year -- grew 6 percent in the third quarter. But it also reported a 5 percent fall in like-for-like sales in its traditional U.K. home-shopping business.
Dutch investment bank ABN Amro cut its rating on the stock to "hold" from "buy," dealers said, citing GUS's comment that Experian, its global credit-checking unit, had noted signs of weaker consumption.
At Matalan, like-for-like sales over the Christmas shopping season jumped 16.3 percent in the six weeks to Jan. 6, making it Britain's fastest growing fashion retailer. But investors homed in on news that the company's profit margin in its second fiscal half-year have so far fallen below the previous year's margin.
"I think that the margins have spooked the market, and the sales numbers were not that exciting," said Eithne O'Leary, an analyst at ABN. Matalan shares were one of the sector darlings last year, more than doubling in value.
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 AN UN-HAPPY CHRISTMAS?
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Matalan: same store sales up 16 percent in six weeks to January 6 Great Universal Stores: retail sales up 6 percent in its third quarter Next: retail sales up 6 percent in 19 week run up to Christmas
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Next said retail sales in the 19 week run-up to Christmas, which was two days longer than the comparable period a year earlier, rose 6 percent on a like-for-like basis.
"Whilst our sales in the run-up to Christmas were good, they were below our expectations," the company said in a statement.
Heady performances in buoyant economic conditions at the end of 1999 made it tough for many retailers to match or exceed their previous numbers in the fourth quarter of 2000.
On Monday, France's Carrefour (PCA), the world's second-largest retailer after Wal-Mart Stores (WMT: Research, Estimates), said sales in December rose 19 percent on a proforma basis from the previous year. The same day, Germany's Metro (FMEO) said sales in 2000 rose 7.1 percent, lifted by strong growth in its international business.
German retailers' shares skidded Thursday. Karstadt Quelle (FKAR) dropped 3.9 percent and Metro (FMEO) declined 1.9 percent.
The FTSE Eurotop 300 index's retailing sector was down 3.8 percent, the weakest industry sector Thursday on the pan-European index.
-- from staff and wire reports 
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