Here are the top business, market, and economic stories you should be watching today in the UK, Europe, and around the world.
Once one of the UK high street’s most celebrated names in fashion, Arcadia has been placed into administration, a form of bankruptcy.
Deloitte confirmed in a statement late on Monday that they had been appointed as administrators for the retail group owned by billionaire Sir Philip Green. The company owns brands that include TopShop, Dorothy Perkins and Miss Selfridge. Deloitte’s job is to find the best possible outcome for the business — likely a sale of its assets.
COVID has been named as a major cause for the company’s collapse, calling this year “the most difficult trading conditions we have ever experienced.”
Arcadia operates almost 500 stores across the UK and employs around 13,000 people. Administration leaves the future of those jobs and stores in doubt.
In further news, department store Debenhams is to be wound down, leading to the likely loss of 12,000 jobs at the department store. JD Sports (JD.L) said in a statement on Tuesday it had ended takeover talks with Debenhams, which fell into administration in April.
A spokesperson for administrators of Debenhams said on Tuesday the company would be shut down after rescue talks failed. Operations will continue until all stock is cleared, at which point all business will be shut down for good unless a last minute buyer emerges.
Boohoo boosted by high street shake up
The FTSE (^FTSE) has been reversing losses seen on Monday as the index climbed almost 2% at around 9:45am in London on Tuesday.
As the fate of Arcadia’s stores remains unknown, there is already talk about who could benefit from its plight, including Boo Hoo Group (BOO.L). The stock was up around 2.3% on Tuesday.
“The aftershocks from the earthquake which Covid-19 represented for the retail sector continue with Arcadia’s collapse seen as nixing a potential JD Sports swoop for Debenhams, to the market’s relief, and with the survivors in the space set to pick over the bones of the Arcadia empire which includes brands like Burton, Dorothy Perkins, Topshop and Topman,” said Russ Mould, investment director at AJ Bell.
He added that though the web-based fashion site Boohoo has been dogged by a supply chain scandal in 2020, “it has previously swooped for struggling high street brands with enduring appeal, like Monsoon, Coast and Karen Millen, and taken them online.”
UK banks lead FTSE gains
London’s FTSE is on its a path towards its biggest monthly gain in more than three decades as the COVID-19 vaccine spurs market demand, in addition to positive China data setting the stage for a global economic recovery.
“November was a highly volatile trading month, but ended on a strong note,” said Milan Cutkovic, Market Analyst at Axi. “The continuation of the winning streak is fuelling hopes that investors will not have to miss out the Santa Clause rally this year either, despite significant hurdles.”
While major challenges still lie ahead, “investors are far less nervous than they were only a few weeks ago thanks due to the progress in the fight against the coronavirus as well as less political risks in the US,” added Milan.
European and Asian markets are showing a broad base of support for the prospect of a COVID-19 vaccine kickstarting the global economy on Tuesday.
Strong Asian data also underpinned the rally, including China’s November Caixin manufacturing PMI beating estimates at 54.9 (vs 53.5 expected), the highest reading in 10 years. Further, Japan’s final manufacturing PMI came in 0.7pts above the flash at 49.0.
-With additional reporting by Oscar Williams-Grut
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