The share price of Shaver Shop Group Ltd (ASX: SSG) has come under intense selling pressure following a business update on the last trading day before the Christmas break.
Shaver Shop Group made its debut on the ASX just under six months ago, listing its shares for $1.05 each. Although they soon rose to a high of $1.23, they have since trended mostly downhill. Today, they find themselves down another 12.2% at just 72 cents.
Sales Take a Shave
As its name would suggest, Shaver Shop is a retail business that sells personal grooming products for men and women. Like the vast majority of retailers, the Christmas sales period is one of the most important times of the year for Shaver Shop, but it seems that was too much to ask for this year.
In its update today, the company said it had experienced weaker-than-expected sales in recent weeks in citing its hair styling category as the major culprit. It also blamed the closure of its Queensgate store in New Zealand following the recent earthquake, although it had 100 stores as at 30 June, including 80 corporate stores and 20 franchisees.
It now expects December sales to be between $26.5 million and $28 million, compared to its previous forecast of $29.5 million. While it believes that the softness in trading is "isolated to a small number of issues", it is not yet in a position to update its full-year prospectus forecast of $127.1 million in sales.
Sneaky Suspicion
Shaver Group's trading update coincides with a 'please explain' notice from the market regulator. Indeed, the company's shares had traded for as much as $1.03 on 9 December and the group caught the ASX's attention as it spiralled as low as 76 cents during yesterday's session – a decline of more than 26% in less than two weeks.
While suspicions surrounding the falling share price could certainly be raised considering today's trading update, Shaver Group did respond to the ASX by stating that it was aware of a market rumour that one of its significant shareholders had lost an investment mandate. In turn, this shareholder may have become a forced seller of Shaver Group shares, pushing the price lower. It was, however, unable to verify this rumour.
Whether or not their falls are related to Shaver Group's update, shares of a number of other retailers have also come under some pressure today. Electronics retailer JB Hi-Fi Limited (ASX: JBH) has declined 0.3%, while OrotonGroup Limited (ASX: ORL) shares have fallen 4.8%.
On the other hand, others such as Harvey Norman Holdings Limited (ASX: HVN) and Myer Holdings Ltd (ASX: MYR) are sitting in the black thus far.
