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Retail round up - The Sunday papers
Archived article dated Sunday January 25th 2009
Sainsbury's goes shopping for new chairman, Fall in sterling may avert UK depression, Tesco lobbies for right to cut pension payments, Ross set for return to Big Yellow board, JJB to sell off Ronnie's helicopters.
The Sunday TelegraphSainsburys has begun the search for a new chairman. Sainsbury's, which enjoyed a strong Christmas trading period, began the recruitment process some time ago, according to people close to the company who said last night that it had not been triggered by Sir Philip's appointment earlier this month as chairman of Royal Bank of Scotland (RBS).
The search for Sir Philip's successor is being handled by the City headhunting firm Egon Zehnder, and is being led at board level by John McAdam, the senior independent director, who also chairs Rentokil Initial, the support services group, and United Utilities. The search is not regarded by board members as urgent and a new chairman may not formally take over from Sir Philip until early next year.Sainsbury's is likely to find its new chairman externally, rather than from its existing crop of non-executive directors.
The 25pc fall in sterling since early 2008 has sparked fears of a run on the pound, and prompted warnings that the UK is facing near-bankruptcy. However, experts said the fall should be regarded as a "competitive devaluation" which would help lessen the pain for the UK in the coming years.Albert Edwards, strategist at Société Générale, said that the UK may stand a better chance of avoiding a deep decline because of the fall in the pound.Sterling fell last week to the lowest level since 1985. It closed at $1.37 on Friday, after being worth more than $2 last July. Many economists suspect that the weak pound will leave the UK well-placed to recover because it will boost exports as well as encouraging investment.Mr Edwards said: "The next few years will be the worst since the Great Depression. A depression is effectively assured for the US. But the UK had a much shallower recession than the US in the 1930s - largely because it devalued sterling and abandoned the gold standard. Now, it's doing the right thing by devaluing its currency, as it did in the Great Depression."
The Observer
Tesco has lobbied the government to push through reforms to the UK's retirement rules that would allow the supermarket to cut its final salary pension payouts if employees live longer than expected.Documents obtained under freedom of information rules reveal that the company told ministers that employers should be allowed more flexibility in administering their schemes in the light of rising retirement costs.The documents show for the first time that one of Britain's major employers is concerned that the rising costs of defined-benefit pensions will become an increasing burden under current rules. The revelation is expected to dismay unions at the supermarket, which is one of a dwindling band of employers offering guaranteed retirement benefits. Tesco emphasised that it remained committed to its scheme, and was asking government for more flexibility to help keep costs under control.
The Sunday Times.
David Ross is expected to be invited to return to the board of the Big Yellow self-storage company after resigning for mortgaging his shares in several companies.The possible return of Ross after his condemnation for pledging shares as security against personal loans has been facilitated by the Financial Services Authority's (FSA) admission that the disclosure requirements were unclear, meaning he could escape punishment. It has also emerged since then that the mortgaging of shares for personal loans is common practice in Britain and that many high-profile directors, including Sir Martin Sorrell of WPP and Barclays' Fritz Seegers, have done so. Ross resigned from the boards of Carphone Warehouse, Big Yellow and National Express after it was revealed that he had put up his shares as security for £170m of personal loans. He also resigned as adviser to the 2012 London Olympics.
JJB Sports is selling the two helicopters used by its suspended chief executive Chris Ronnie.The sportswear chain has already agreed to sell one of its Agusta 109 helicopters to a Middle Eastern buyer for £4m.The heavily indebted group hopes to unload the second within a matter of weeks for another £1m after chairman Sir David Jones ordered the sale. “One helicopter would be indulgent even for a major company — having two is simply inexcusable,” an industry source said. The news comes a week after The Sunday Times disclosed that Ronnie had set up a shell company he intended to float on the Plus junior stock market while trying to save JJB. Ronnie, who was paid £293,000 last year and granted a £1m options package, was suspended last week after he disclosed that a 27.5% stake in JJB owned by a company he jointly controlled had reverted to the liquidators of his backer Kaupthing Singer & Friedlander. Jones, the former chairman of retailer Next, was appointed this month to turn the company round.
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