G4S and Mulberry

“The FTSE 100 starts the week on the front foot as investors await key trade talks between the US and China later this week,” says AJ Bell investment director Russ Mould.

Mulberry

“Today’s announcement from luxury handbag maker Mulberry is a reminder that the victims of the current high street malaise in the UK do not just include the retailers themselves.

“The update is essentially bad news folded into more bad news with a £3m hit associated with the collapse of House of Fraser into administration (and its subsequent rescue by Sports Direct) as well as a wider weaker performance linked to a soft retail market.

“The business model of the big department stores has looked under pressure for some time thanks to the shift towards online shopping, but they did at least showcase a variety of brands in an attractive setting.

“Losing this literal shop window for products could be a test for the likes of Mulberry and, in particular for their brand power.”

G4S

“The decision by the government to take back control of Birmingham Prison from security firm G4S could have wider reaching consequences than just a hit to the company’s revenue and prestige.

“Another high-profile failure involving private involvement in the public sector will add ammunition to critics on the left who have already been able to highlight the collapse of Carillion and failures on the rail franchise so far in 2018.

“At a company level it is a further knock to the credibility of a business which has endured several big setbacks over the course of this decade. Most notably with contracts to provide security for the London Olympics and with the electronic tagging of criminals.

“Although the other five UK jails run by the firm are apparently performing well, today’s news is likely to place them under the glare of the spotlight".

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