Sports Direct was back under pressure on Thursday amid worries that transforming the business would be a long and painful process.

Citigroup, Sports Direct’s joint house broker, cut the stock to “neutral”. Its analysts saw Sports Direct’s investment in bigger stores, and its pledge to ease back on using Nike and Adidas products as loss leaders, as defensive responses to increased competition both online and on the high street.

“As the strategy is a radical change to the business model that has worked well for the last 30 years and is likely to be dilutive to group returns, then it is a safe bet that Sports Direct is not moving to this strategy willingly,” Citi said.

“Given current weakness in the UK apparel market and uncertainty about UK consumer cash flow, combined with Sport Direct’s willingness to sacrifice near-term profit to maintain the consumer proposition, we think there is unlikely to be a near-term rebound in profitability.”

Sports Direct closed 5.2 per cent lower at 290.4p in a weak retail sector, which was also affected by Next cautioning with half-year results that trading since July had remained “challenging and volatile”. Next slid 4.9 per cent to £49.57, Marks and Spencer faded 2.6 per cent to 313.4p and N Brown slipped 2 per cent to 188.2p.

Sterling weakness underpinned the wider market after the Bank of England left the door open for a November rate cut. The FTSE 100 rose 0.9 per cent, up 59.99 points at 6,730.30.

Forecast-beating results squeezed Wm Morrison 7.5 per cent to 208.1p, with dealers noting that about a fifth of its free float is on loan to short sellers. The rest of the sector was helped by Morrisons’ suggestion that a weaker pound may help to ease deflation, with Tesco gaining 4.9 per cent to 169.7p.

Retail broker Hargreaves Lansdown, which was trading ex 27.2p of dividends, slid 4.5 per cent to £12.73 after Liberum moved from “buy” to “sell”. Interest rate cuts mean Hargreaves will earn “considerably less income from clients’ cash balances,” it said, adding that at 36 times earnings the shares are vulnerable to any downgrades.

RSA Insurance — the subject last year of an aborted 550p-a-share bid from Zurich Insurance — rose to its highest in nearly two years, up 4.2 per cent to 530p, on double the average volume.

JRP Group, the annuities specialist, surged 18.2 per cent to 115p after reporting a half-year embedded value of 227p per share and a stronger than expected solvency ratio.

Coca-Cola HBC was 3.8 per cent firmer at £17.27 on an upgrade to “outperform” from Credit Suisse.

Plastic products group RPC gained 5.5 per cent to 901p after Berenberg turned positive. A strong record with acquisitions supports hopes that RPC can keep growing by consolidating its fragmented market, Berenberg argued.



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