Blog: Profit warnings soar
Leonie Barrie | 16 July 2007
The state of the economy here in the UK is never far from the headlines at the moment. Interest rates are rising as the Bank of England tries to slow the rate of borrowing and inflation and it has led so far to a general sense of unease.
Although we still appear to be some way off a full-scale recession, as last experienced when the technology-led stock market crashed in 2001, few can doubt that there has been a slowdown in consumer spending in recent months. What remains hotly contested is quite how serious the ramifications of this slowdown are going to be.
A report out today (15 July) by the business consultancy Ernst & Young will certainly add fuel to the fire. It reports that profit warnings issued by UK-listed firms are at their highest level since 2001.
In the first half of 2007, 191 companies cut earnings forecasts, 13% more than in the same period in 2006. And it is a shortfall in sales that is the most often quoted reason for warnings.
Worst affected are software firms. However, clothing retailers are also victims, with little to look forward to as the poor weather so far this year exacerbates weak sales.
“The combination of higher interest rates, rising mortgage payments and household bills has left consumers with the smallest proportion of discretionary income for five years," said Andrew Wollaston, also a partner at Ernst & Young. The decline in consumer spending is marked and has serious ramifications for retailers, especially those selling big-ticket or discretionary items.”
Some of just-style’s more eagle-eyed readers might have noticed a small change to the menu bar on the homepage: the addition of the word re:source. Yes it might be a small change – but it marks the co...
Over the past week just-style has continued to try to unravel the potential ramifications of Donald Trump’s election as the next president of the United States....
One event dominated the international airwaves last week, and on just-style too we took a closer look at the surprise election of Donald Trump as the 45th president of the United States....
As the Brexit roller-coaster continues to twist and turn, and the US presidential election campaign nears its unpredictable and possibly protectionist end, there's no doubt these events – and the perc...
- Steps to piloting living wage in garment factories
- How to ensure sustainability is more than a slogan
- Trump blows the case for Brexit out of the water
- US apparel retailers' November 2016 sales roundup
- Why do modern robotics elude sportswear makers?
- US Q3 in brief – Sears, Vince Holding, Genesco
- Esquel efficiency drive continues to boost brands
- Taiwan textile maker investing in first US plant
- Outdoor apparel sector set for double-digit growth
- Myanmar garment industry "lacking labour rights"