Hedge Fund Investors Soft on U.K. Retail Stocks

Following on on the heels of Brexit, hedge funds are not too optimistic about Britain's high street retailers.

As evidence of this, hedge funds saw shares of Debenham's decrease three percent, which is the lowest it has traded in eight years. Five of the 10 most shorted U.K. stocks include these retail-sector firms: M&S, Debenhams, Pets At Home, Morrisons and Ocado.

With the soon-to-be exit from the European Union looming, consumer spending has not been as confident as it was in the past. This is resulting in retailers like sofa company DFS putting word out that it might miss its profit expectations for the year. In turn, the stock index that tracks Britain's retailers fell 4.1 percent, which is said to be the largest one-day decline since the Brexit vote last year.

Analysts and investors are expecting to see further weakness in the stock market. These concerns are directly tied to both DFS’ warning and Amazon’s Whole Foods acquisition. As retailers and investors alike fear that Amazon will push further into retail, it has left most uncertain about future profits.


Click to comment