Retail stocks tumbled after Asos warned full-year profits will be lower, blaming a “significant deterioration” in November trading.
The online fashion retailer’s shares plunged 42% to £24.47 after closing at £41.86 on Friday, sending the share price of peers lower.
Asos’s market cap stands at £2.08 billion, having reached £5.06 billion last November when it overtook Marks & Spencer for the first time.
Rival Boohoo Group’s shares fell 11% to £16.35 despite issuing a statement to reassure investors that it continues to “comfortably trade in line with market expectations” helped by record sales from Black Friday.
FTSE 100 high street bellwethers Marks & Spencer and Next shares were also down 4.3% and 2.8%, respectively.
Quiz shares fell 14%, JD Sports was down 4.9%, Sports Direct was down 3.9%, Dixons Carphone dropped 3.9%, and Associated British Foods, the owner of discount retailer Primark, was down 3.1%.
Asos’s profit warning suggests it is not just high street retailers being affected by low consumer confidence and weather-related problems.
Neil Wilson, chief market analyst at Markets.com notes softer consumer confidence and weather affecting retailers.
He said: “Every retailer that ever existed blames the weather, but to a degree we must accept it has been a factor this year.
“Online businesses have seemed immune but the warning from Asos today suggests they too are at risk from the cyclical slowdown. We must stress that the Asos warning is indicative of a cyclical slowdown rather than being suggestive of the structural problems facing the high street.”