Good morning!
The Dow fell 800 points yesterday, or 3%. The FTSE dropped another 100 points to c. 7150. Let’s see what today brings.
H amp; T (LON:HAT) footnote
(I have a long position in HAT.)
I had a very brief chat yesterday with Richard Withers, the interim FD of Hamp;T, to clarify one or two things I had been wondering about (see Tuesday’s report for background info).
1. Fall in retail marginHamp;T’s retail division saw a 10% reduction in gross profits and a noticeable decline in margin, and I asked Richard why the company had chosen to get rid of aged items at such a large discount.
Richard explained that these items had been sitting in stores for “quite a while”, including things like less desirable watches and gold bangles which were more difficult to sell.
From a financial efficiency point of view, £2 million of cash had been released by this move, and that stock turn had improved from 52 weeks to 38 weeks.
Richard confirmed that there had been a gradual buildup of inventory and that this sort of inventory clearance was just something that might be needed from time to…
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