Market Report: Retailers discounted as Footsie rallies

AS FOOTSIE achieved its only advance of the week retailers were again left on the shelf. Yet another profit warning - this time from Allders - did the damage.

The nation's shopkeepers have suffered as the stock market became aware consumers were under pressure and cutting back on their spending.

A steady flow of cautious trading statements and outright profit warnings have pushed many shares to their year's low with some looking demoralised. Recent sales data has been disappointing with indications last month was particularly unrewarding.

Next, once the high flying darling of fashion, is looking decidedly threadbare. The shares fell 12.5p to 435.5p, lowest for more than two years, before cutting the fall to 3p. They were riding at an 835p peak before a profit warning hit in March.

Others under pressure included WH Smith, off 20.5p to 492p; Tie Rack 5p to 41.5p and poor old MFI, the furniture chain, now down to 50p against a 209p high. Tie Rack, which tied up a profit warning last month, topped 200p last year.

Sears managed to find another low, off 8.5p to 212p and recent off-spring Selfridges fell further below its asset value, down 3.5p to 207p.

Marks & Spencer, the retailing aristocrat, has not avoided the bruises. The shares fell 1.5p to 503p, just above their 12 month low.

Department stores chain Allders slumped 50.5p to 139p after warning profits would not reach the pounds 23.5m the market expected but would not be less than pounds 19m.

House of Fraser retreated 9.5p to 125p. On Tuesday SG Securities cut its profit forecast from pounds 35m to pounds 32.5m.

Superstores have fared rather better than the rest of the retailing herd and are within hailing distance of their year's highs. But pressure is starting to intensify. The recently signalled Monopolies & Mergers Commission probe is the unsettling influence.

Safeway lost 10p to 350p, Somerfield 12.5p to 439.5p and Tesco 0.5p to 174.5p. Wm Morrison was lowered 7p to 249p. Asda firmed 3p to 193p and J Sainsbury 4.5p to 510p.

Footsie drew strength from New York where encouraging employment figures boosted the Dow Jones Average. The index rose 86.3 points to 5,680.4. The mid cap displayed a little life but the small cap gave ground.

After its poor run this week a Friday fillip was due. Confidence has been damaged and some could not avoid describing the rally as no more than a dead cat bounce.

Compass, the contract caterer toasted by Dresdner Kleinwort Benson on Thursday, staged an appetising recovery, rising 50.5p to 588.5p. Telecom shares, given a poor reception this week, jumped on the recovery wagon with BT ringing a 40p plus to 840p.

Nycomed Amersham, maiden figures next week, put on 28p to 406p and British Land, near its year's low in a depressed property sector, climbed 27.5p to 537.5p.

Allied Domecq, which has been in the doldrums, frothed 30.5p to 586p and Rank, the leisure group, hardened 14p to 337p on hopes of corporate action.

Many neglected stocks attracted some support. Pilkington, the glassmaker, managed a 3.5p gain to 98.5p and builder Redrow firmed 4p to 134p.

Jarvis, the construction and maintenance group, added another 13.5p to 643.5p ahead of Tuesday's investment presentation.

Shire Pharmaceuticals recovered 63p (to 356.5p) of its wounding fall and Tepnel Life Sciences reflected the removal of an overhang with a further 3p gain to 26p.

Dennis, the coach maker accelerated 62p to 456p after Mayflower, a maker of car bodies, said it was prepared to bid 450p. Mayflower, off 2p at 195p, is barging into a comfy merger between Dennis and Henlys, a bus and coach maker, off 61p at 539p.

Crabtree, an engineer contemplating a management buy out, hardened 2p to 49.5p.

Filtronic, a maker of bits and pieces for mobile phones, jumped 98.5p to 568.5p after buying a similar business from Nokia, the Finnish group for pounds 40m in cash and shares. The deal gives the Finns a 7.5 per cent stake in Filtronic, which on Monday acquired a US group for pounds 26m.

Oliver, the shoe retailer, held at 24.5p after Hush Puppies, declared a 3.96 per cent stake and an institution took 4.16 per cent. And Sketchley, where Guinness Peat has built a stake. held at 31.5p as Guinness Mahon and Sterling Property each notified interests approaching 4 per cent. On Ofex newcomer Airtel ATN, placed at 20p, moved to 35.5p.

SEAQ VOLUME: 780.7m

SEAQ TRADES: 55,603

GILTS INDEX: n/a

BOOKER, the hard-pressed cash and carry group, is in talks which could lead to a merger.

After its shares had risen a further 15.5p to 242p,the company rushed out a statement referring to talks with various parties on a range of options. Booker has risen 29.5p this week on stories of a German bid, with the giant retailer Metro rumoured as the predator. Metro denied it was interested.

The shares were riding at 353.5p at the start of the year.

ACQUISITIVE Ennstone, the vehicle for Vaughan McLeod, former head of Ennemix, is likely to take a significant stake in Drings, the Bath stonemason.

It plans to inject its natural stone and concrete business into Drings in exchange for cash and shares.

Drings, suspended at 2p, has had a difficult time since arriving on the market two years ago at 3p. Ennstone, formerly Albrighton, acquired Bruntcliffe Aggregates for pounds 26.2m in September.