Sunday Retail News Roundup
Loch Fyne on the block, BHS closes in £55m flagship store deal, BHS grabs landlords' lifebelt, What do I know about exports? At Waitrose we sold to only 50 countries, BHS's £571m pensions black hole, Airport VAT still a rip off!, Back to basics for 70,000 Co-op staff, Short-sellers rush into Halfords, When are shops open on Easter bank holiday?, Karen Byers runs Sports Direct.
Greene King, one of Britain’s biggest pub companies, is exploring plans to sell off its Loch Fyne Seafood & Grill restaurants for £100m. The company is in early talks about a sale after receiving opportunistic bid approaches. Greene King bought Loch Fyne for £68m in 2007 to diversify from its core brewing and pubs business. Loch Fyne has 38 restaurants.
BHS is close to raising £55m by selling the 45 year lease on its flagship London store on Oxford Street to Abu Dhabi’s ruling family. The loss-making department store chain, which secured approval last week from its creditors for a restructuring, is understood to be nearing a deal with Lancer Property Asset Management, which looks after the interests of the Middle Eastern royals. It also said it was close to securing £60m from Gordon Brothers, an American firm. It intends to bolster its finances further through more property deals.
As the votes were counted it became clear that BHS had sailed through. Of those who voted, 95% were in favour of the CVA, well above the 75% required. The state-backed Pension Protection Fund (PPF), which is likely to bail out 20,000 current and former staff, decided to abstain. Darren Topp, BHS’s chief executive, said the victory would “enable us to continue with our turnaround plan and safeguard the future”. Topp confirmed BHS was in the final stages of negotiating a £60m lifeline from Gordon Brothers, the American opportunity fund that tried and failed to rescue Blockbuster, and more from property deals.
Mark Price is leaving his supermarket to become the minister responsible for trade. But can he hit the target of doubling Britain’s exports?. Sales volumes at Waitrose, the middle class’s supermarket of choice, tanked by almost 10% as the recession took hold in 2008. Analysts predicted the downfall of the John Lewis Partnership’s food and drink division, warning that shoppers were bound to become intensely focused on price. Waitrose hasn’t been entirely insulated from the price pressures that destroyed profitability at Tesco and Morrisons. Its annual results this month bore a mild imprint: operating profit fell 0.8% to £232.6m and like-for-like sales slipped by 1.3%. The outgoing Waitrose boss is taking a Tory seat in the House of Lords and responsibility for improving Britain’s atrocious record on exports.
Mail on Sunday.
BHS management is set to explain ‘within weeks’ to the Pension Protection Fund how it will deal with its £571million pensions black hole. Some senior staff at the struggling retailer face losing more than a third of their pensions and expect little help even if a deal is reached. The company’s board is under pressure to produce a plan that will help plug the £571million shortfall after the PPF tacitly supported a restructuring of the business by abstaining at a creditors meeting on Wednesday.
Major retailers are still operating a VAT rip-off in airports and demanding customers show their boarding passes at the checkout despite being ordered to stop. Some of Britain’s best-known stores including WHSmith and Dixons are milking their margins by continuing to ask to see passengers’ travel documents when they purchase something in the airport terminal. This allows them to claim millions in tax refunds which should be passed on to the customer. Rules set by HM Revenue & Customs state that stores need not charge VAT on passengers who are flying to destinations outside the EU. So they are allowed to scan a customer’s boarding card to prove where they are flying and claim back the cash.
The Co-operative is gearing up to re-educate its 70,000 staff about ethical values in the second phase of its turnaround after the mutual was plunged into crisis three years ago. Richard Pennycook, chief executive of The Co-operative Group, has said that the company’s “rebuild” stage will see staff retrained over the summer about “the history of the Co-op, why we are different and how we want them to interact with customers”. The move comes ahead of relaunching the Co-op’s membership programme, which includes 7m people, later this year.
Short-sellers have cranked their bets against Halfords up a gear as the cycle chain works to revive its sales. Traders have piled into positions against the retailer since the start of the year and accelerated their campaign in recent weeks. More than 5pc of the firm’s shares are out on loan to short-sellers, who aim to sell the stock before buying it back later at a lower price. These investors alone hold positions worth 3.5pc of Halfords, or £27m at Friday's price.
UK law dictates that shops larger than 280 square metres, the ones that are subject to the six-hour trading limit on Sunday must close on Easter Sunday in England and Wales. Smaller shops, and all stores in Scotland, have no restrictions on opening hours.
Since Sports Direct floated in 2007, Byers has warranted only six newspaper mentions outside the trade press which is astonishing for a woman in her position: she has spent about 15 years as the head of retail at an organisation with more than 500 UK stores, a workforce of about 30,000 people, and which was a FTSE 100 company until this month. Ashley, in an attempt to reverse the barrage of negative publicity following poor trading, two profit warnings and an investigation into working conditions at the Shirebrook warehouse, gave a rare interview.