Retail round up the Sunday papers
Sale on cards for £150m Paperchase, Will.i.am calls the tune, How Tesco put the squeeze on suppliers, Wheels of fortune, M&S sales melt as high street feels the heat, Tesco turmoil grows as key executive quits, Hotel Football to suffer from Manchester United's exit from Champion's League, Tesco audit chairman set to leave as director, Princess Diana's wedding dress designer crowdfunds her comeback, Spill the beans on secret payments from suppliers, supermarkets told, Keep Wonga logo off kids' replica football shirts, Help young entrepreneurs to save the high street
The owner of Paperchase is considering a £150m sale of the card and stationery retailer after receiving several bid approaches. Primary Capital has owned Paperchase since 2010 when it backed a management buyout of the business from Borders, the American bookstore chain that has since collapsed. Paperchase, led by chief executive Timothy Melgund, has grown strongly over the past four years. It has 110 stores in Britain and 28 concessions — roughly double the number of outlets at the time of the buyout.
Pop star Will.i.am is expected to sign a deal with the British streaming business 7Digital, which will power a music service on a smartwatch to be launched by his gadget business. It is thought the AIM-listed company has been in talks with representatives of the singer and music executives over the past few weeks to hammer out the details, according to record industry sources. The deal would be a coup for 7Digital, which has worked with other big names such as Samsung, T-Mobile and BlackBerry.
Since overtaking J Sainsbury as the market leader in the mid-1990s, Tesco has rarely shied away from using its scale to extract cash and concessions from suppliers — taking groceries off the shelves when it wants to drive home a message. In some cases, as when Premier tried to pass on rising commodity costs, it has done so to keep down prices for consumers. In others, it has acted to boost its own bottom line.
A slowdown in sales did not stop Britain’s biggest online bicycle retailer from coasting to profits of nearly £5m last year. Cost cuts, efficiencies and improved margins helped to swell profits at Chain Reaction Cycles to £4.8m from £861,000 a year earlier, although sales fell 6% to £144.9m. Two-thirds of the family business’s sales were made in Europe.
Warm autumn weather has taken its toll on Marks & Spencer, which is set to report disappointing sales next month following alarms at its retail rivals Next and N Brown. Citi, one of M&S’s house brokers, said general merchandise sales in the three months to September 29 were now expected to have fallen by 4%, far worse than the 1% drop previously pencilled in. Citi added that M&S would continue to be hurt by the shift away from high street shopping to the internet, branding the shares a “hold”. It cut the company’s full-year profit forecast by 1.5% to £650m.
Tesco has been hit by the departure of another senior executive with the resignation of its company secretary, Jonathan Lloyd. The exit of Lloyd, who was responsible for advising the board on legal and governance issues, will add to the turmoil at Britain’s biggest supermarket. Tesco is reeling from a sales slump, management upheaval and the discovery of a £250m black hole in its profits. Audit committee chairman Ken Hanna is also said to be stepping aside, with his departure set to be announced soon.
Ryan Giggs, former Manchester United winger turned assistant manager for the club, is about to open Hotel Football in the shadow of the Old Trafford Stadium in Manchester. The launch follows hot on the heels of Café Football, which opened last December in London’s Westfield shopping district. His cafe has proved the demand for football-themed hospitality, netting £1.8m in its first year.
The chairman of Tesco’s audit committee is set to step aside as a non-executive director as Britain’s biggest retailer revamps its board following the discovery of a £250m blackhole in its profits. The departure of Ken Hanna, who dismissed warnings from Tesco’s auditor about the risk of its commercial revenues being manipulated, is expected to be confirmed before the end of the year.
The designer who found fame with Princess Diana’s wedding dress is hoping to make a comeback to the high fashion scene by raising £1.5m in crowdfunding. Elizabeth Emanuel also dressed Elizabeth Taylor and Joan Collins in her heyday but has maintained a lower profile since losing the rights to trade under her name in the mid-1990s.
Mail on Sunday
Shareholders and investor groups are demanding that supermarkets provide more information about their contracts with suppliers, and the impact of hidden payments. The payments, which The Mail on Sunday revealed last week can contribute as much as a third of supermarket profits. They include dozens of supplementary charges and payments levied by retailers on their suppliers. Suppliers pay target-driven bonuses but also fund promotions and can even provide money for new stores.
Wonga and other payday lenders’ names should be taken off replica football shirts worn by children amid a crackdown on lending practices by the financial regulator, a group of MPs has demanded. The move would bring payday lenders in line with the alcoholic drinks and gambling industries, which have prohibited the use of brands on children’s replica shirts. The demands follow remarks by Wonga chairman Andy Haste, who said he did not want to target the ‘vulnerable and the young’.
Boarded-up Britain could be a thing of the past if barriers preventing young people from starting new high street businesses are removed, according to the founders of a scheme to give young people access to vacant units. Last week it was revealed in a report by accountancy firm PricewaterhouseCoopers that more than 3,000 shops closed in the UK’s 500 main shopping centres in the first six months of the year.
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