Short Sells of 34% Made In UK Retail Sector

Legal firm Linklaters released a new data according to which there has been a 66% rise in short positions against high street retailers and retail manufacturers between the period of beginning of 2015 and the end of 2017.

Short selling is a process where investors bet against the stock they expect to decline in value and make money.

Revealing the growing lack of faith in the UK retail sector can be seen by the sharp rise in short sells, which is currently facing headwinds from multiple directions. It is led to big name retailers like Maplin, Toys R Us, Mothercare, Conviviality and New Look to enter financial straits.

There were 32% of all short positions against consumer companies at the end of 2017.

This has risen to 34% in the first few months of 2018.

“Given the cyclical nature of retail and consumer, it’s no surprise that consumer companies have consistently been most shorted, but the sheer volume of short position reporting gives a clear indication for how things might develop in the sector in the coming months,” Linklaters restructuring partner Richard Hodgson said.