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What to watch: JD Sports expands US footprint, Zara sales falls, and sterling slips on Brexit talks

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JD Sports store on the Oxford Street. Photo: Getty
JD Sports store on the Oxford Street. Photo: Getty

Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and around the world.

JD Sports expands US footprint

The UK’s biggest sportswear retailer JD Sports (JD.L) is expanding its US footprint following its announcement on Tuesday that it is buying Shoe Palace for $325m (£240m).

The news sent company shares up in early trading, gaining 5.8% around 10am in London.

JD Sports entered the US market in 2018 following its acquisition of Finish Line.

Shoe Palace is currently run by four brothers from the Mersho family and has 167 stores and a growing e-commerce platform. The brothers will be given equity in JD’s US unit, according to the British company, seeing them own 20% of the enlarged group in the United States.

Shares in JD Sports have been gaining as news of its latest US acquisition was announced on Tuesday. Chart: Yahoo Finance
Shares in JD Sports have been gaining as news of its latest US acquisition was announced on Tuesday. Chart: Yahoo Finance

“This acquisition will significantly increase the Group's presence on the West Coast of the United States and strengthen its connection with the Hispanic and Latino consumers, who represent a significant proportion of Shoe Palace's customer base,” said JD Sports in a statement on Tuesday.

READ MORE: UK unemployment rises and redundancies hit record high as London Tier 3 set to boost joblessness

Zara sales falls on COVID-19

Fashion retailer Inditex (IDEXY) posted a 14% fall in sales in the three months from August to October in its latest earning report announced on Tuesday as customers slowly return to shopping following the first wave of COVID-19.

The company’s latest performance is an improvement following a 31% drop in the previous quarter. The company continues to face headwinds as fresh lockdowns from late October to combat the second wave of the pandemic left 21% of stores closed in November. Roughly 8% still remain shut.

Shares have been steadily gaining on Tuesday, up about 6.1% at around 10am in London.

The business also reported that third quarter net profit reached €866m ($784m, $1,049), in line with a rebound in profit reported in the second quarter. The company’s tightly-controlled supply chain model and in-store deliver and returns model helped keep margins stable during this period.

Sterling slips on Brexit talks

Brexit talks continue to leave sterling vulnerable, with the currency falling slightly against the dollar and euro on Tuesday morning.

Traders are continuing to brace for any sliver of hope of a Brexit deal being brokered.

“The discussions are ongoing,” Stephen Barclay, chief secretary to the Treasury, told on Sky News on Tuesday. “The fundamentals remain the same. It is in both sides’ interest to have a deal. That is what the Prime Minister has committed to.”

The pound was down 0.2% against the euro to €1.0946 (GBPEUR=X) in early trade in London. Sterling was down 0.2% against the dollar to $1.3312 (GBPUSD=X).

Rising COVID-19 cases cast a shadow over European markets

European market sentiment remains downcast on Tuesday as COVID-19 cases continue rising despite the rollout of vaccines to fight the pandemic.

European indices were largely negative at the market open. Britain’s FTSE 100 (^FTSE) fell 0.2%, Germany’s DAX (^GDAXI) was lower 0.1%, and France’s CAC 40 (^FCHI) lost 0.1%.

US futures were slightly higher. The S&P 500 (ES=F) gained 0.2%, while the Dow (YM=F) tilted upward 0.2% and the Nasdaq (NQ=F) jumped 0.1%.

Asian markets were downcast at market close. Hong Kong’s Hang Seng (^HSI) lost 0.7%, and Japan’s Nikkei (^N225) was lower 0.2%. The Shanghai Composite (000001.SS) was also down 0.1%.

WATCH: Brexit countdown: 16 days until the end of the transition period

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