Festive fright for retailers

The travails of Britain's high street are well-known, but "the conventional wisdom" was that internet retailers were well placed to ride out the shopping squeeze, says Andrea Felsted for Bloomberg. Yet this week, it fell to online fast-fashion retailer Asos to serve up the City's "first seasonal shocker". Shares in the business crashed 38% on Monday following a profit warning, wiping more than £800m off its market value.

Shares in online rival Boohoo tumbled 14% (despite the latter rushing out a reassuring update). Asos boss Nick Beighton blamed "an unprecedented level of discounting" as clothing retailers battle it out for market share. As analyst Natalie Berg of NBK Retail told the Evening Standard: "You know things are bad when even the online giants are struggling."

Yet it's a valuable reminder that the economics of online retail are not as favourable as some investors might think, notes Felsted. "Constant investment is needed to offer the most cutting-edge technology and fend off cut-throat competition." Beighton might say that the profit warning is merely a "bump in the road", but the online marketplace is looking overpopulated, agrees Nils Pratley in The Guardian.

Asos offered 20% discounts for Black Friday, only to find competitors such as Germany's Zalando going even lower. The firm is "very good at selling more clothes" but heavy discounting has squeezed profits. On the latest forecast, pre-tax profits will probably come in at £52m. That is similar to the profit Asos made in 2014, when turnover was less than half what it is now. True believers will point to Amazon's successful strategy of low profitability and growing market dominance. But maybe the ultimate prize awaiting Asos investors "isn't mega-returns, but a permanent state of low-margin attrition".

No shelter on the high street

Despite the online pain, the outlook for the high street isn't any rosier. At a results presentation last week, Sports Direct owner Mike Ashley described November trading as "unbelievably bad" and said the current environment would "smash retailers to pieces". Ashley also launched an extraordinary attack on Debenhams, in which he owns a 29.7% stake, saying that the department store has a "zero chance of survival" under the current leadership.

Ashley's words should be taken with a grain of salt, says Ben Marlow in The Daily Telegraph. He's a shrewd operator with "one eye always on the next cut-price deal", and so has a clear interest in talking down rivals and positioning himself to snap up Debenhams on the cheap, should poor Christmas trading "seal its demise".

Yet with the likes of John Lewis, fashion label Superdry and electronics retailer Dixons all publishing woeful numbers, "every light on the retail dashboard is flashing red Throw in yet more Brexit uncertainty, plus predictions of another cold snap, and there may be little to cheer this Christmas."

Louis Vuitton snaps up luxury hotels

Luxury goods giant LVMH is buying the London-headquartered Belmond hotels group for $3.2bn (£2.55bn). Belmond owns hotels such as the Cipriani in Venice (pictured) and the Grand Hotel Europe in St Petersburg, and operates the Venice-Simplon Orient Express train service. The owner of the Louis Vuitton and Christian Dior brands is keen to invest in the booming market for luxury experiences, says Carol Ryan in The Wall Street Journal. "Wealthy shoppers are now as interested in fine dining and overnight stays as fashion purchases."

LVMH is wise to diversify away from "frocks and watches" and into the "super-luxury" travel market, agrees Jim Armitage in the Evening Standard. It is also a relief that Belmond has not been snapped up by a private equity buyer or a chain like Hyatt or Accor, which could "jeopardise the uniqueness" of its offering. LVMH already has hospitality experience it owns Bulgari hotels and given that "it already provides their Louis Vuitton luggage, Givenchy outfits and Dom Prignon champagne", the company "understands Belmond's super-wealthy customers" better than almost anyone else.

LVMH has paid a pretty penny for these prestige assets, says Lex in the Financial Times. The US-listed shares "are being bought for more than double their level in August" and at a big premium to other hotel groups. But cash-generative LVMH "can afford to splurge". Berenberg analysts reckon that even after the Belmond deal, it has enough financial leeway to spend another €25bn on acquiring other luxury brands, should it feel so inclined.

City talk

Investors sold out of US healthcare giant Johnson & Johnson following allegations by news agency Reuters that J&J knew for decades that its baby powder was sometimes contaminated with asbestos, says Robert Cyran for Breakingviews a story which J&J has described as an "absurd conspiracy theory".

The market may well have overreacted J&J has ridden out crises before: its quick, effective response to a cyanide poisoning case in the 1980s is taught in business schools as a case study in how to protect corporate reputation. Yet if it really did fail to disclose "troubling data relating to a product used on babies", business schools might now have a "counter-example" to teach as well.

When "fiery" Vronique Laury took charge of Anglo-French DIY giant Kingfisher she promised a 73% rise in profits within five years, writes Sam Chambers in The Sunday Times. Yet three years on, sales at its B&Q chain are falling and senior staff have "left in droves". Kingfisher has been described as akin to "a federation of national bodies". Laury aims to change that, offering similar products across ten European nations. Yet national DIY preferences vary hugely and the retail climate is tough. To deliver, she needs "a miracle beyond any power tool".

It's odd that it took the collapse of outsourcer Carillion to spark interest in reforming the big four accountancy firms, says Nils Pratley in The Guardian. "Action should have happened a decade ago when the banks, boasting healthy reports from their auditors, fell over." But the latest proposals from the Competition and Markets Authority carry a "welcome whiff of seriousness" about shaking up an uncompetitive, cosy industry.

In particular, a proposal for joint audits of FTSE 350 firms, with one auditor drawn from outside the big four, could create a world with a "top league of eight auditing outfits" and "underperformers at risk of relegation".