Retail round up The Sunday papers
Comet collapse leaves taxpayer with £26m loss, Carlsberg ramps up pressure on PM over alcohol price plan, Pop-up shops are licking the high street blues, Mothercare chief faces investor backlash over £6.7m bonus deal, American vulture fund swoops on stricken HMV, Thomas Cook chief jets to £3m payday, Harvey Nichols in rent row, Inflation eases in run-up to Christmas, Tapas chain taps banks new kitty, Up to 80% off in High Street sales frenzy, Shoppers are profiting as loyalty points make prizes, Online grocer nets German backing, H&M comes under pressure to act on child-labour cotton
Stricken electrical retailer Comet collapsed under almost £200m of losses which will leave the taxpayer facing a £26m hit. Secured creditors, led by the financial investors who backed Comet, are expected to receive a return of 34p in the pound, while unsecured creditors, including HM Revenue & Customs which is owed £26.1m, will receive nothing. The true extent of the financial picture surrounding the administration of the 236-store chain will be laid bare in a detailed report expected to be published by administrator, Deloitte, tomorrow . The report will also explain that 85% of trade suppliers who had goods on credit with Comet at the time of its administration have claimed retention of title, leading to an estimated £40m of payments to suppliers.
Danish brewer Carlsberg has become the latest drinks group to oppose government proposals to introduce minimum unit pricing for alcohol to tackle Britain’s binge-drinking culture. Plans for a 45p-per-unit minimum price were set out last month and have the support of the Prime Minister. They would mean beer could not be sold for less than 90p a can while wine would cost at least £4.20 a bottle. The Sunday Telegraph reveals today that political pressure is growing on the Prime Minister from Cabinet colleagues to abandon the policy.
Independent on Sunday
Whether it is retailers seeking to maximise sales ahead of Christmas or seeing if their wares will sell before launching, pop-up shops are literally popping up everywhere in "Austerity" Britain at a time when one in seven town-centre shops are empty. The transient nature of these stores means that there is a lack of hard evidence over this trend. But Matthew Hopkinson, director at the retail research specialist Local Data Company (LDC), says: "I definitely think the number of pop-up shops has increased over the last year, as it has over recent years." Also, retailers and their landlords are coming up with new ideas on how to market pop-up shops. For instance, the struggling entertainment retailer HMV has opened 15 of them before Christmas, but, for the first time has put its name on the fascia.
Mothercare's chief executive, Simon Calver, is bracing himself for a backlash over his highly incentivised pay package, which could see him pocket £6.7m, including £4.8m in shares. The former LoveFilm boss faces shareholders at a general meeting next week who have been advised by the activist investor group Pirc to vote down his remuneration deal, in echoes of the "shareholder spring" from earlier this year. His deal includes a maximum payout of three times his salary if strict profit and share price targets are met by 2015.
An American vulture fund is plotting to seize control of HMV after the high street chain’s warning that its future is hanging by a thread. Apollo Global Management, one of the biggest investment funds on Wall Street, has secretly snapped up a chunk of the retailer’s loans. The investment puts it in a strong position to take over the business as it teeters on the brink.
Harriet Green, the new boss of Thomas Cook, could receive a pay package worth nearly £3m for her first year at the tour operator. Her contract, seen by The Sunday Times, shows she will receive an annual salary of £680,000 and could earn a performance-related bonus of up to £1.5m. The bulk of any bonus would be paid in cash, although 25% would be in shares and deferred for three years. The company can claw back this portion of the award.
Harvey Nichols is squaring up to one of London’s oldest aristocratic estates over plans for a rent rise at its flagship Knightsbridge department store. The freehold is owned by the Cadogan Estate, a private property empire valued at £3.5bn and controlled by the family of Charles Cadogan, the 8th Earl Cadogan.
Hard-pressed households seem to have received a timely boost, with the recent jump in the cost of living expected to have eased in the run-up to Christmas.It is anticipated that official data out on Tuesday will show that the rate of inflation slipped from 2.7% in October to 2.6% in November, bolstering the buying power of consumers during the festive season. The slide in the consumer prices index (CPI) will come as a boon for families, who have been hit with inflation-busting gas and electricity rises over recent months.
A fledgling Spanish restaurant and bar chain has raised £3m for expansion from a fund set up by high street banks in the wake of the credit crisis. Camino, founded and run by entrepreneurs Richard Bigg and Nigel Foster, has secured the money from the Business Growth Fund so it can treble in size. The growth is expected to create up to 250 jobs.
Mail on Sunday
The January sales used to be as much a part of the Christmas fun as buying presents and decorating the tree. But fierce competition, deep discounting and low-cost online competition are putting paid to the annual rush for a bargain. Expect price cuts of to 80% at some stores, even before Christmas has arrived. Retailers will this week slash prices to historic lows to ensure they are not left with unwanted stock on January 1. High Street bosses want to empty shelves by Friday, leaving as little as possible for the January sales they fear may only last a matter of days, Financial Mail has learnt.
More than one third of goods stocked by clothing and food retailers have been discounted in recent weeks as stores target bargain-hungry shoppers in the festive rush. The discounting phenomenon, which has surged during the recession, means Britons can save hundreds of pounds when paying for gifts and Christmas celebrations. According to researcher Kantar Retail, 40 per cent of all groceries are being sold on promotion or on special offer. In some food categories that rises to 80 per cent.
Online grocery start-up Hello Fresh has secured a seven-figure investment from Vorwerk Ventures of Germany. Hello Fresh, which has subsidiaries in seven countries including Britain and Germany, delivers boxes of fresh, locally sourced ingredients from independent suppliers to subscribers’ homes. But uniquely, these come with tailored recipes for meals. In Britain, the cost starts at £36 a week for three meals for two people, rising to £129 a week for a five-meal box for six people.
One of Britain's most popular fashion chains is under pressure to sever its links with clothing suppliers that buy cotton from Uzbekistan, where large quantities are harvested using child labour. H&M, the giant fashion chain which uses football star David Beckham and singer Lana Del Rey in its advertising campaigns, has signed a pledge to "not knowingly" source cotton from the central Asian country in response to concern from human rights groups.
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