May 23, 2020
Gap between retail winners and losers widens to a chasm
Geoff Ruddell, Morgan Stanley's retail analyst since 2005, wrote in a recent note that the effect of Covid-19 on the industry "Is set to be so profound that it will render irrelevant most of the research we have ever written". While the FTSE 350 General Retailers index is down 21 per cent over the past three months, there is a wide divergence between the winners and losers over that period, offering clues on where investors think future earnings power will be concentrated. The future of retail has stayed much the same, but will be arriving more quickly. Dying high streets, online cannibalisation, profitable niches and the fading appeal of multi-line retail have been the sector's dominant themes for more than a decade. The gap between expected winners and losers has widened to a chasm.
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