While some of Britain’s best known retail names have crashed into bankruptcy, something strange has happened: retail stocks have rallied.

The FTSE All-Share General Retailers index has jumped 20 per cent from a mid-November low, though the broader market has retreated 5 per cent. Marks and Spencer, Next, and Kingfisher are up about 20 per cent, Debenhams 60 per cent, and DSG International more than 80 per cent. The sector’s forward price/earnings ratio has stretched to a 16 per cent premium to the market. This looks premature.