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The Sunday Papers - Retail round up
Archie Norman rallies his troops, Sofa firms in crunch talks, TK Maxx plans cut-price furnishing stores, Asos to launch on-line discount operation
Sunday TelegraphArchie Norman has lured a number of British supermarket executives to run the Coles chain in Australia, to which the former Asda boss is a senior adviser. Norman is an adviser to Wesfarmers, the Australian company that bought Coles last year for £9.99bn. He has tempted a raft of top UK retailers to move 10,000 miles in what he has dubbed the "most exciting turnaround opportunity in global retail". Andy Coleman, the director of central operations at J Sainsbury, will join Australia's second largest supermarket group in August as a senior member of the management team. Coleman currently reports to Roger Burnley, a member of
Baugur has called in advisers to review the future of its loss making health food retailer Julian Graves - a move that is likely to raise renewed questions about the financial strength of the Icelandic investor. A sale is thought to be the most likely option. Industry bankers expect the retailer to be sold for between £20m and £50m. A spokeswoman for Baugur confirmed that Deloitte has been appointed to look at strategic options.
Two former ski-bums are poised to make a multi-million pound fortune from a sale of a stake in their business to private equity firm Phoenix Equity Partners. George Treves and Sean Thomas, who are now both in their forties, have moved into advanced talks to sell a stake of between 10 per cent and 20 per cent in White Stuff to Phoenix after picking the buyout firm as a preferred bidder. The deal is likely to value the fashion brand at between £70m and £80m and could complete in the next few weeks, said sources.
Sunday Times
Two of Britain's biggest furniture retailers are this weekend in crunch negotiations in an attempt to survive an economic downturn and deteriorating conditions on the high street. The Sunday Times has learnt that SCS Upholstery has appointed advisers at Ernst & Young to restructure the troubled company. However, if these fail, KPMG has been lined up as administrator. The move comes as one of its main rivals, Land of Leather, nears a rescue package that should ensure its future. Last week, shares in SCS lost half of their value and plunged to an all-time low after the company said that five of its sofa suppliers had had their credit insurance removed. Its market value on Friday stood at £3.5m, a fraction of its all-time high of about £190m less than two years ago.
Fashion trader Asos is aiming to double turnover within three years with the launch of an online discount operation in September. The e-tailer, which will sell brand names such as Ted Baker, Ralph Lauren, Religion and Diesel at a 75% discount, aims to get a significant slice of the £2.7 billion market currently dominated by TK Maxx. The venture, Asos Red, which will be a subsidiary of the main Asos site, has already poached two clothing buyers from TK Maxx and is in negotiations with a number of top-name brands.
The new chief executive of Entertainment Rights - the company best known for Basil Brush and Postman Pat - is raiding his toy cupboard in an attempt to trim group debts. Nick Phillips is considering the sale of Big Idea, owner of a string of American children's characters - including Veggie Tales, a group of animated vegetables designed to appeal to the Christian youth market. Entertainment Rights was sitting on debts of £107m at the year end, against its market value of £51m.
Financial Times Sat/Sun
McDonalds has abandoned the concept of “one price fits all” and hired consultants to advise on which regions are willing to pay more as it tries to recoup higher food costs. Steve Easterbrook, chief executive of McDonald's UK business, said: “We wanted to provide some science to the art of menu-board price changes.” McDonald's has hired Revenue Management Solutions, an international consultancy group, to survey how price-sensitive customers are in Britain and recommend where and on what menu items it can raise prices by 10p-20p.
Laura Ashley, the chain that is stalking Moss Bros, raised its stake in the men's wear retailer just before it re-ported deteriorating trading. Moss Bros was the subject of an abortive takeover proposal from Baugur earlier this year, which was stopped last month after the Icelandic investment group became concerned that the deal would be blocked by Laura Ashley. The men's wear chain announced that Laura Ashley, which has previously tried to acquire Austin Reed, has now amassed a 10.05 per cent stake in Moss Bros. However, there has still been no talks between the two companies.
The Mail on Sunday
TK Maxx plans to open more than 100 home furnishings stores over the next three years to cater for increasingly cash-conscious shoppers. The company already has more than 200 clothing stores and has just opened six HomeSense shops in as many weeks. The stores will follow the same cut-price model as TK Maxx.
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