Retail profit warnings hit their highest rate since the financial crisis in the first nine months of 2019, with Brexit cited as a key factor.
EY’s Profit Warnings Report found that, in total, 235 profit warnings were issued by UK listed companies in the nine months to September 2019 – the highest rate since 2008.
Listed retail companies issued 28 warnings between January and September, 22% more than were issued during the whole of 2017.
Asos, Ted Baker, Superdry and Quiz are among retail names to have issued profit warnings this year.
In the three months to September, 22% of profit warnings cited Brexit as a cause, up from 10% in the first quarter of the year. Contract delays or cancellations, as well as macro-economic volatility, were all blamed for difficulties.
Lisa Ashe, restructuring partner at EY UK, said: “Retail’s biggest problem isn’t consumers’ ability to spend, but their willingness. Despite a strong labour market, rising wages, low inflation, and improving disposable incomes, the public’s concern for the broader economy is hitting discretionary spending especially hard.”