Retail round up - the Sunday papers
High street eyes £1bn lift as China visa curbs eased, Sainsburys sales slip in price war, EE 'to end links with Carphone Warehouse', Short-sellers circling over AO World, Sainsburys sales dip again as King bows out, Leighton steps down from Music Magpie board, South African retail billionaire to launch UK stores assault, City gambles on share falls as top retailer bosses quit, Boohoo to unveil first results as Asos ends week in tears, Spending at discount stores soars 23% in a year, new rules critics fear an extra 500 pubs will close, Hema arrives in Britain
EE is poised to pull out of its relationship with Carphone Warehouse in a move that threatens the retailer’s £3.6bn merger with Dixons, The Telegraph can disclose. Britain’s largest mobile operator will conclude a review of its consumer retail strategy “within weeks”, sources said, with a complete withdrawal from Carphone Warehouse the potential result.
Short-sellers targeting the flood of freshly floated retail businesses have trained their sights on white goods group AO World. The company raised eyebrows when it floated with a £1.2bn valuation in late February and short positions, which have increased steadily since it listed, peaked last week, when AO World reported its maiden set of full-year results, according to data compiled by Markit.
Justin King is to step down as chief executive of J Sainsbury’s on the back of a second expected quarterly sales dip. The retailer is this week expected to report a decline in like-for-like sales of between 1pc and 1.5pc for the last three months. This would be the second consecutive quarter of falling sales for Sainsbury’s, which had previously enjoyed nine years of unbroken sales growth under Mr King, who leaves the retailer next month.
Sir Stuart Rose is working on a refresh of Ocado’s board in a bid to comply with corporate governance requirements. Sir Stuart, who took over as chairman of the online grocery delivery business in May 2013, is attempting to increase the number of non-executive directors on the board at the same time as looking to replace two of the directors who have served on it for the longest period of time.
Allan Leighton, the original City pluralist, has stood down as chairman of the company behind Music Magpie because of time commitments. Mr Leighton, the former Asda chief executive who went on to chair the Royal Mail, has resigned as chairman of Entertainment Magpie. The business is the holding company behind Music Magpie – the online firm which buys back everything from unwanted CDs to old pairs of jeans.
Mail on Sunday
South African retail billionaire Christo Wiese has set up a British shell company to prepare to launch a series of takeovers of stores groups. The company, Pepkor UK, is named after Wiese’s retail investment group Pepkor which owns leading retail chains across the globe. The British operation is being headed by former Asda boss Andy Bond and his business partner Mark Elliott.
Stock market speculators are gambling heavily on share price falls at some of Britain’s leading retailers as price wars and online competition continue to pile pressure on the store groups’ profits. The groups most under the spotlight are those where a change of leadership is casting doubt over the company’s prospects. Investors are gambling on falls – known as shorting the shares – at WH Smith, Sainsbury’s and luxury goods firm Burberry. In all three cases, increasing market doubt comes alongside the departure of a respected chief executive.
Online fashion retailer Boohoo is hoping to distance itself from troubles at rival Asos when it makes its maiden results presentation to the City this week. The Manchester-based firm, which floated in March, is expected to confirm profits of about £15million on sales of £109million. City analysts believe sales at the firm could double in the next two years.
Discount stores continued to enjoy soaring sales last month as shoppers deserted the big chains for cheaper rivals, according to the latest figures on consumer spending from Barclaycard. Spending at discount groups rose 23 per cent in May on the same month a year before. The number reveals the challenge faced by bigger supermarkets and department stores. Barclaycard does not reveal which firms are in its discount category, but they are likely to include Aldi and Lidl, TK Maxx and larger ‘pound shop’ groups.
More than 500 pubs could close as a result of Government plans announced last week to give landlords greater power to negotiate with pub groups, according to the Department for Business. The figures were leapt on by critics of the plans. But supporters of the reform, led by the Campaign for Real Ale, claimed the plan could cut 60p from the price of a pint of beer.
The Home Office is poised to ease visa restrictions on Chinese visitors next week as travel agents claim that the British system is still putting off tourists. Britain is believed to be missing out on more than £1bn a year because high-spending visitors from the Far East find it onerous to obtain visas to come into the country.
The gloom surrounding Britain’s supermarkets will deepen this week when J Sainsbury, which has fared the best of the big four in recent months, is expected to report a rare fall in sales. Analysts expect the chain to say that like-for-like sales — a measure that strips out the effect of new space — fell in the first quarter of the financial year by between 1% and 1.5%.
Independent on Sunday
Prepare for the phrase "going Dutch" to mean something altogether different from this week when Hema, a Dutch value retailer with a flair for design, opens its first UK outlet, with plans for plenty more over the coming months. Hema's arrival will pose a challenge to the Scandinavian stalwart Ikea and newcomer Tiger of Denmark because the Dutch store offers customers similar bargains and easy-on-the-eye designs.
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