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Retail round up - the Sunday papers

Laura Ashley accused of bullying, Diageo's Paul Walsh cracks China, Kit Kat Chunky bars recalled after plastic is found, Tesco to accelerate global investment in digital technology, Hilco in talks with suppliers about securing HMV deal, Blockbuster rescued, Kingfisher flounders in snow, Truphone to target cheap domestic calls, Fears grow for London port project, Small firms that can’t mention Olympics, Retailers call for more help to stop shops quitting town, Lidl keeps its UK tax bill secret, Design classics from past could soon be granted extra protection, Whitworths cooks up £100m sale, Bench presses for sale


Retail round up - the Sunday papers

Sunday Telegraph

Laura Ashley has been accused of “bullying” suppliers after it emerged that the retailer has demanded they pay back 10pc of the value of orders it had already agreed with them. In a letter seen by The Sunday Telegraph, the home furnishings company sought an “immediate cost price reduction of 10pc” including on “orders already placed”. The company blamed the “increasingly competitive” UK retail environment. It also said that if suppliers met its demands it would mean the company would not have to resort to “reviewing our supplier database”.

Diageo’s CEO visited China last week to catch up on plans to become a major player in Asia.  In China, Diageo operates with a joint venture – MHD – with Moët Hennessy, part of Bernard Arnault’s LVMH group. The agreement dates back 22 years and leaves Diageo holding 34pc of Moët Hennessy. The venture allows Diageo to piggyback on MH’s luxury products experience, combining the marketing of Hennessy cognacs and Moët & Chandon Champagnes with Johnnie Walker products and other Diageo brands, such as Guinness.

Nestlé has recalled four varieties of Kit Kat Chunky bars after pieces of plastic were found by seven people. The company said the 48g Peanut Butter, Hazelnut, Choc Fudge and Caramel flavoured chocolate bars were being recalled "to avoid any risk whatsoever to our consumers".

Tesco’s chief executive has pledged to step up its investment in digital services around the world as the supermarket group battles declining sales in traditional stores. Philip Clarke said the company will launch new digital music and book services in the UK, expand online food shopping into Bangkok and Shanghai, and launch Clubcard into China via a digital format. Mr Clarke said the retailer is to invest $750m (£492m) in technology this year, three times more than in 2010.

A deal to rescue HMV could be struck within ten days as restructuring specialist Hilco tries to strike an agreement with record labels and film studios. HMV collapsed into administration in January and since then more than 100 stores have closed, costing thousands of jobs. Deloitte, the administrator, had being aiming to agree the sale of HMV by Monday, March 25, the day retailers pay rent for the next quarter.

Blockbuster, the DVD rental company, has been rescued following a deal with restructuring group Gordon Brothers Europe. The deal will save 2,000 Blockbuster employees and 264 stores after the retailer collapsed into administration in January. A deal between Gordon Brothers and Deloitte, the administrators to Blockbuster, was agreed on Friday night and confirmed on Saturday afternoon.

Independent on Sunday

The group behind the DIY chain B&Q will cap a year to forget when it posts a fall in profit this week. But Kingfisher, which has more than 1,000 stores in eight countries, could have a more upbeat message on the prospects of it returning cash to shareholders. The group is expected to report an 11 per cent decline in profit to £714m over the year to February, according to Deutsche Bank.

Truphone, the British telecoms group which focuses on business customers, will target the general consumer market by the end of this year.  The Group, which is almost one quarter owned by Russian billionaire Roman Abramovich, is looking to expand into Germany, Spain and Poland this year and then is likely to try to win over the public.

Concerns are mounting over the commercial strength of what will be Europe's biggest logistics park, itself a major selling point of the £1.5bn London Gateway superport now being built 25 miles from the capital. Port owner DP World – part of the Dubai World empire that was so battered by the global economic crisis – has been in negotiations for about a year with the retail giant Marks & Spencer and freight group Uniserve. However, contracts for them to take huge warehouse space at the park have still not been signed.

Mail on Sunday

British firms that helped to build the London 2012 Olympic venues or supply the event are being gagged from using their links to the Games to promote their business, or even to publicly admit their involvement.A row has broken out between the British Olympic Association and smaller suppliers, many of which believe they are being held to gagging contracts at the insistence of the big corporate sponsors.The spat has prompted Shadow Business Secretary Chuka Umunna to call for the gags to be removed so that the firms can boast of their involvement to help boost exports.

Retailers and town centre groups will tomorrow urge the Government to step up attempts to halt the decline in Britain’s high streets by clamping down on out of town developments. Financial Mail has been told that groups plan to use the first High Street Forum meeting with Local Government Minister Mark Prisk to demand a focus on ‘harder policy issues’ such as planning, lower parking charges and business rates that could help resuscitate local shops.

Lidl has failed to make public its UK tax bill, which is shrouded in a web of holding companies between Britain and its home in Germany. Lidl UK, the group’s British subsidiary, reports a turnover far below the £3 billion estimated by analysts – of just £202 million. This is matched by almost exactly by administrative expenses at the company. Lidl reports a tax bill of about £12,000.

Design classics from  the past could soon be granted extra protection under a British law that stops mass-market copies of iconic products. The law will mean design copyrights will be extended to 70 years, instead of the current  25-year protection. It could even force McDonald’s to find a new design for the chairs in its British restaurants.

Sunday Times

A snack-food maker that started life as a flour mill 125 years ago is being lined up for a £100m sale. Whitworths, which claims to be Britain’s biggest healthy snacks business, is being offloaded by its private equity owners. Founded on the banks of the Nene in Wellingborough, Northamptonshire, in 1886, Whitworths supplied flour to local bakers for the first 50 years of its life.

Bench, the fashion label worn by stars including Lady Gaga, could soon change hands in a deal worth about £100m. Americana, the Manchester-based group behind the brand and its sister label Hooch, has hired Canaccord Genuity to carry out a strategic review. A sale of the group is one option.


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