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Friday 10th February 2012

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You are here: Home | News | Retail round up - The Sunday papers

Retail round up - The Sunday papers

Tesco to launch bank branches and current accounts, JJB set for stake auction, Norman and Leighton vie to be M&S chairman, Little cheer for Marks & Spencer

The Sunday Telegraph

Tesco will open bank branches in 30 of its stores by the end of 2009 as part of a massive assault on the financial services sector. Tesco has appointed a raft of heavyweight figures from financial institutions such as Barclays and Scottish Widows as non-executive directors of its Tesco Personal Finance (TPF) division to oversee the move into mainstream banking. Andy Higginson, the chief executive of Tesco Retai

ling Services, which is overseeing the push, said that the supermarket's bank will be "old-fashioned and conservative". "Some banks have grown up using practices that are the opposite of Tesco - we encourage customer loyalty but many banks punish loyalty, they get people in with low rates and then make money. Ours is a different philosophy," he says. Customers will be able to gain Clubcard loyalty points through using the bank. "The markets have now become far more rational. Some banking businesses have got into trouble for growing too fast and doing daft things," said Mr Higginson.

Liquidators will tomorrow auction off 65 million shares in JJB, the sports retailer, amounting to over a quarter of the company's stock. The shares belonged to Chris Ronnie, JJB's former chief executive, before he controversially sold them to Kaupthing, the Icelandic bank, in a move that led to his downfall from the company. Tomorrow's sale is being handled by Ernst & Young and PricewaterhouseCoopers, which are acting as liquidators of Kaupthing's assets following the bank's implosion last October. The bank holds the JJB stake in two different accounts. The auction will pave the way for liquidators to pursue Mr Ronnie for losses in the region of £130m. Mr Ronnie sensationally exited JJB after it was revealed that he had sold his stake in the retailer to Kaupthing without disclosing the disposal. The Financial Services Authority has since launched an investigation into the sale. Mr Ronnie, who had put the shareholding up as collateral for a loan in 2007, has argued that he was unaware of the change in ownership of his stake in JJB. Company directors are required to notify the company of any dealing in shares under stock exchange rules.

The Observer.

Allan Leighton and Archie Norman have thrown their hats in the ring to replace Sir Stuart Rose as chairman of Marks & Spencer.Norman and Leighton, the "dream team" that led the turnaround of Asda in the early 90s, have told friends they would be interested in the high-profile City role. Succession is a burning issue for the M&S board, which has been criticised by investors for agreeing to allow Rose to occupy the posts of both chairman and chief executive when the retailer is once again in decline. Annual profits are expected to be £590m this year, down from £1bn in 2008. On Tuesday Rose is expected to say like-for-like sales slumped 7% in the three months to 31 March.

The Sunday Times

Marks & Spencer will announce this week that sales have picked up slightly since its third-quarter Christmas trading update, in which underlying clothes sales were down 9.9%.

The news will do little to ease pressure on Sir Stuart Rose, its executive chairman, who is under fire from City analysts and shareholders over group strategy and corporate governance. The City also fears that M&S may be losing ground to some of its competitors.

It is expected to reveal that sales were still 7%-8% lower than the same period last year and that profit margins have been savaged by price cuts designed to woo customers.

Tagged as: retail round up - sunday papers

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