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Retail round up – The Sunday papers

Tesco chiefs splash £29m on private jets, Oasis owner slides into the red, Dreams seeks buyer to end debt nightmare, Food giant sale to save 6,000 jobs, Thousands of customers switch their accounts out of the big five banks, Shoppers can no longer count on finding Boxing Day bargains, Struggling Groupon bid £80m for luxury retailer, Barclays in crackdown on high pay, HMV hopes for Christmas to be its saviour, Jack Wills loses two senior executives, Tesco 'turns corner' after woeful year, Misery for retailers as recovery hopes nosedive, Small business owners' fury over new VAT loophole, Glasses Direct looks to Continent

SUNDAY PAPERS

Retail round up – The Sunday papers

Sunday Times
Tesco has racked up a bill of almost £29m on a secret fleet of private jets used to fly its top executives around the world. The supermarket giant has run a separate company called Kansas Transportation since 2005 to hire executive jets for its staff, The Sunday Times can reveal. The group’s annual report makes no mention of the company and gives no clear breakdown of the huge sums forked out on the flights.

The company behind the fashion retailers Coast, Oasis and Warehouse has made a £13.6m pre-tax loss because of restructuring costs. Aurora Fashions, which is owned by administrators to the failed Icelandic bank Kaupthing, has more than 1,250 stores in 38 countries. It took a hit from spinning off the Karen Millen chain into a separate company and disposing of its stake in Bastyan, the luxury womenswear label. The moves pushed Aurora into the red despite sales rising 4.2% to £403m in the year to last February. Underlying earnings fell 15.3% to £12.7m, according to accounts filed at Companies House.

Britain’s biggest bed retailer has been put up for sale after its banks lost patience with attempts to secure a cash injection from the owner. The lenders stepped in after Dreams failed to persuade Exponent, the private equity firm, to plough tens of millions of pounds into the business it took over four years ago. Dreams has 270 stores and 2,000 employees.

More than 6,000 jobs are close to being saved with the rescue of part of Britain’s biggest meat processor. Endless, the turnaround firm, has entered exclusive talks to buy the poultry business of Vion.  The private Dutch company, one of the world’s largest meat processors, put its British operations up for sale earlier this year amid mounting losses. The negotiations come weeks after Endless, best known for reviving Crown Paints, snapped up Vion’s pork operations, securing 5,000 jobs.

The Observer
Consumers are deserting major high-street banks in unprecedented numbers after a slew of revelations about unethical behaviour, according to data from the Move Your Money campaign. Building societies, credit unions and co-operatives have all reported a sharp rise in new business over the past 12 months as the reputation of the major banks has taken a hammering. Laura Willoughby, Move Your Money's chief executive, said: "Anger with the banks is turning into action. This year British banks have been exposed for exploiting their customers, starving the economy of credit and flouting the law." The Co-operative bank has seen the number of people switching to its current accounts jump by 43% over the past year.

The days of the Boxing Day sales bonanza could be over as customers are bombarded by bargain offers from stores in the runup to Christmas. Discounts are widely available both online and on the high street as retailers become increasingly agile at monitoring demand and altering prices accordingly.Where once a set price would remain until the shops closed on Christmas Eve – then fall sharply for the start of the sales on Boxing Day – prices now fluctuate to attract buyers. Many big stores offer large discounts on a range of items pre-Christmas to bring consumers through the doors.

Sunday Telegraph
Groupon
, the struggling US “daily deals” company, offered to buy Achica, the British luxury goods online retailer, in a deal that would have valued the company in the region of £80m. The unsolicited offer, believed to have been made in the autumn, was turned down, as the founders and shareholders deemed it to undervalue the business. But the disclosure of the approach reflects Groupon’s desire to widen its business model amid a falling share price and competition from rival websites.

Barclays is to rewrite its rules on pay and multi-­million pound bonuses in an attempt to drive down costs and stop criticisms that the bank incentivised its executives to take the wrong type of risks. The Sunday Telegraph can reveal that Hector Sants, the former chief executive of the Financial Services Authority, has been asked to play a key role in writing the new pay strategy, which will be revealed at the bank’s strategic review on February 12.

The Independent
The beleaguered entertainment retailer HMV faces a critical two day of trading before Christmas Day that could play a pivotal role in shaping whether it survives on the high street. The 238-store chain issued a “going concern” warning earlier this month and is being stalked by Apollo Global Management, the US vulture fund that has acquired more than 10 per cent of HMV’s debt.

Jack Wills has previously ridden the wave of soaring demand for its preppy clothing among Middle England teens and university students, boosted by endorsements from the popular boy-band One Direction. But the fashion retailer, which has 80-plus stores, appears to have hit choppier waters and two senior executives are leaving the chain that also has a presence in the US, Middle East and Hong Kong. Paul Woolf, the finance director, has already left the private equity-backed retailer, while Liz Hall, its head of UK stores, is to exit early next year.

Tesco will seek to get on the front foot early in 2013 with the expected hiring of a new chief executive for its UK business, amid signs its domestic operation has turned a corner after a year to forget. The world's third-biggest retailer has also appointed a new boss for its Malaysian operation: the latest in a long line of management changes. Chris Bush, Tesco's UK chief operating officer, is the favourite to take over running its UK business. He could be appointed as soon as 10 January, alongside its Christmas trading statement.

Mail on Sunday
Hopes of a December recovery in retail sales have been dashed, leaving store groups in need of an unprecedented last-minute boom to save their Christmas. Total spending on credit and debit cards in the run-up to Christmas is rising slower than inflation, according to figures compiled for Financial Mail by Britain’s leading credit card company, Barclaycard. Spending at department stores and DIY chains has shown a sharp drop. Barclaycard said total spending on cards between the start of October and December 18  was up just two per cent on the same period last year. This is lower than the 2.7 per cent rate of inflation.

The Government appears unwilling to close tax loopholes that enable retailers to avoid charging VAT to their customers. Evidence passed to Revenue & Customs by independent experts and small businesses shows many retailers are still avoiding  charging VAT on goods, such as DVDs, shipped to Britain from the EU or further afield. It follows the closure in April of a loophole allowing retailers with a Channel Islands base to send goods worth up to £15 to Britain free of VAT. However, goods worth up to 22 euros can still be sent VAT-free to Britain from other EU countries.

The firm behind online optician Glasses Direct has bought Nordic contact lens retailer LensOn in a deal said to be worth £15million. Prescription Eyewear, which owns Sunglasses Shop and myOptique, a designer eyewear site, too, financed the deal with new equity from existing investors Acton Capital Partners, Highland Capital Partners and Index Ventures, along with debt financing from Kreos Capital and Silicon Valley Bank.

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