18 October 2018

Katie Stanton

18 October 2018

Good morning, 

The UK’s local high streets have told a sorry tale over the last few years, with closures all over the shop. Decaying stores accumulate clothes on sad metal racks: unsold, unloved, make-up smeared...

But where high street shops have encountered hardship, the online shopping market is thriving. ASOS is one of the jewels in the e-commerce crown, the modern shopper’s favourite child, an online labyrinth of reasonably priced, consumable, on-trend clothing. And, unsurprisingly, it’s doing very well indeed as a result.

It emerged yesterday that ASOS UK sales rose 23% in the year to 31 August, meeting its downgraded forecasts for full-year profits. Pre-tax profit was £102 million, up from £80 million last year and, consequently, shares rose by as much as 15%.

ASOS is a pioneer in quick, easy fashion, adding “around 5,000 new items to its website every week, with around 87,000 products in stock at any point in time”, providing discounts for cash-strapped students, and an app for busy bodies. It’s emphasis on inclusivity – with curve, petite, tall and wide ranges – has seen it hailed as a fashion revolutionary, forging the way for other brands to follow.

Chief executive Nick Beighton noted yesterday that ASOS is a “very, very innovative fast-paced organisation”, but he’s not quite satisfied yet. Lamenting that the company could have reacted more quickly to soaring temperatures this summer, Beighton is looking to the future and fuelling growth by funnelling surplus cash back into the business.

ASOS currently has 7.5% of the UK market, but is less popular overseas – a key area for future development, particularly in the US. And with online clothing sales set to hit 20% of the UK clothing market within the next five years, ASOS is ideally placed to tap into this growing customer base.

Meanwhile, the outlook is less dazzling for the high street. House of Fraser, Toys R Us, Coast and Mothercare are all out – even Claire’s is considering shop closures. Retail outlets are becoming less and less viable as business rates soar and customers seek solace in cheaper, online alternatives.

Matt Brown, a director of retail intelligence agency Echochamber, has a more positive outlook. He claims that the retail apocalypse is “fake news” and calls for strategic thinking to meet customer demand and revamp our high streets.

Maybe so, but for many consumers, the future of shopping lies not so much in bustling town centres, but in bed with a cup of tea on a Saturday morning. As the temperature starts to fall and winter approaches, I know which I prefer. 


The British cyclist shot dead in the Alps last week has been described as a “rapist monster” by his mother. Marc Sutton was killed near the Les Gets ski resort in France by a hunter who mistook him for a boar or deer. His mother remarked: “my only disappointment is you died instantly” after reports that he had repeatedly raped his sister as a child, before being sectioned for shattering an ex-girlfriend’s jaw. The claims are disputed by his current girlfriend. Sutton’s killer is receiving treatment for shock and his death is being treated as aggravated manslaughter.

An attack on a Crimean school has killed at least 19 people and wounded 40 more. Witnesses described a gunman prowling the halls, firing at students and teachers alike until he ran out of ammunition. There were also reports of a bomb being detonated during the attack, although it is not clear yet whether this was the case. The attacker, later identified as Vladislav Roslyakov, was an 18-year-old student of the Kerch polytechnic college. He killed himself at the site of the attack, with any motive not immediately clear.

Theresa May has refused to rule out an extension to the UK’s transition period post-Brexit, after negotiations with EU leaders stalled. An extension would see the transition period end in 2021 and would buy more time for a solution to the Irish border problem. Brexit-backing MPs have “reacted angrily” and Theresa May will likely face rebellion from within her own party if plans to extend the transition go ahead. (£)

Senior executives from firms such as Goldman Sachs, Pepsi and EDF will still attend a major economic conference in Saudi Arabia next week. Pressure is growing for a boycott of the event after the Saudi government was accused of murdering journalist Jamal Khashoggi at the Saudi consulate in Istanbul, allegations that have been strongly denied. More than 30 delegates have already dropped out of the conference, but consultancy firms McKinsey, PwC, Ernst & Young and Deloitte, among others, remain as sponsors of the event.

Business & Economy 

The US yesterday revealed its interest in commencing talks on an ambitious trade deal with the UK after Brexit. The prospective free trade agreement is expected to be “cutting-edge” and President Trump is reportedly keen to begin negotiations as soon as the UK is ready. The development will come as welcome news to the government, for whom a transatlantic trade deal is a key Brexit pay-off. But some have criticised the plans, expressing concern that British supermarkets would be forced to accept US food standards. (£) 

The Department for Work and Pensions announced yesterday that it has made mistakes worth £1.5 billion and now owes tens of thousands of people on sickness benefits back-payments worth an average of £5,000. The income miscalculations were made between 2011 and 2014 when people were moved on to the main sickness benefit, the Employment and Support Allowance (ESA).

The Bank of England has warned that soaring debt could lead to another financial crisis. It claims that companies are borrowing excessively, driven by investor demand, and repayment may be beyond their reach. Drawing parallels with the sub-prime mortgage crisis, which encouraged the borrowing of vast sums that many people were unable to afford, bank officials warned “leveraged lending in the US was larger than the stock of sub-prime debt before the financial crisis ten years ago and was rising fast” creating the conditions for a potential recession. (£)


What happened yesterday? 

The FTSE 100 closed 0.1% lower yesterday at 7,054.6 points after a promising start. Airlines weighed heavily, with Easyjet closing down five per cent and British Airways owner IAG down two per cent following a profit warning from smaller rival Flybe.

Technology stocks were up following a “well-received update from Netflix” which saw its viewers total more than 137 million, but wider momentum on stock markets faded.

In the US, the dollar rose and Treasury yields were up following the decision from the Federal Open Bank Committee to raise interest rates. But corporate earnings reports produced disappointing results on the whole, which stemmed the increase in comparison to Tuesday’s boost.

The pound fell dramatically to $1.31 after the announcement that inflation fell to 2.4% in September. Connor Campbell, a financial analyst at SpreadEx shed a positive light on the plunge, however: “That those losses weren’t sharper…is pretty impressive, given that Wednesday is the day of the crucial EU summit”. Meanwhile, the pound was down 0.5% against the dollar at $1.31, but up 0.1% against the euro at €1.14.


Applied Graphene Materials



HarbourVest Global Private Equity Limited A Shs

Trading Announcements

Domino’s Pizza Group

International Personal Finance


Rentokil Initial

RWS Holdings


Falcon Oil & Gas Ltd.

Myanmar Investments International Ltd.

Rank Group



Societatea Nationala De Gaze Naturale Romgaz S. A. GDR (Reg S)


Societatea Nationala De Gaze Naturale Romgaz S. A. GDR (Reg S)

UK Economic Announcements

(09.30) Retail Sales

International Economic Announcements

(07.00) Wholesale Price Index (GER)

(13.30) Continuing Claims (US)

(13.30) Initial Jobless Claims (US)

(13.30) Philadelphia Fed Index (US)

Columns of note

Alice Thomson has some critical words for Canada in The Times this week after the legalisation of marijuana came into effect yesterday. Considering the pros and cons – epileptic children having access to life-changing relief, versus the horrors of life as a drug runner and the associated health risks – Thomson concludes that drugs do far more damage than good. She proposes freeing-up its use for medicinal purposes, but waiting to see how experiments in Canada and the US pan out before any marijuana revolution. (£)

In The Spectator last week, Lionel Shriver explained “why Christine Blasey Ford’s testimony didn’t make me cry”. I admit to being a bit late to the game on this one, but Shriver’s controversial stance is an eye-opening alternative perspective, which contains some harsh truths alongside what many will consider to be some questionable conclusions. Shriver opines that women “are too often fed the message that weakness is their greatest strength”, arguing that we should celebrate “our resilience as well as our scars” and that power need not come from our victimhood. (£) 

Did you know?

King Tutankhamun’s tomb contained, among other garments, 145 pairs of underpants and 47 pairs of flip-flops.

Parliamentary highlights


House of Commons

Oral questions

Environment, Food and Rural Affairs

Church Commissioners, House of Commons Commission, Public Accounts Commission and Speaker’s Committee on the Electoral Commission

Business Statement

Business Questions to the Leader of the House – Andrea Leadsom

Backbench Business

Debate on a Motion on Ending Exploitation in Supermarket Supply Chains – Kerry McCarthy

Debate on a Motion on World Menopause Day 2018 – Martin Whitfield


Rail services to Redhill, Reigate and District – Crispin Blunt

House of Lords

Oral questions 

Economic effect of Brexit on (1) the North East of England, (2) other regions of the UK, and (3) Scotland, Wales and Northern Ireland – Baroness Quin

Assessment of the case of Sarah, who was held captive by a grooming gang for 12 years, according to a report in the Daily Mail – Baroness Cox

UK visas and immigration charges for applications made from outside the UK by telephone and email – Lord Harris of Haringey

The “One Yorkshire” proposals for devolution to a Combined Yorkshire Authority – Lord Wallace of Saltire


Scale and complexity of cyber threats facing the UK and the case for innovative approaches across HM Government and beyond – Viscount Waverly

State of music education in schools – Lord Black of Brentwood

Scottish Parliament

On recess until 21 October


House of Commons

No business scheduled

House of Lords

No business scheduled