Retail round up the Sunday papers
Peacocks banks to collect £69m despite retailers pension shortfall, Takeover talk boosts M&S shares, Russia is next stop for UK shops, Two-week deadline for JJB to sort out its debt problems, Olympics take a slice out of Pizza Hut, Golden August and boosts spirits and economy in 'Olympic bounce', Maverick's bid to beat booze law sparks fury, B&Q chief tells of secret trials and his growth masterplan, Stores are on standby for a smartphone Christmas this year, Shopkeepers calling for a lifeline from supermarket tax, Going fast. . . markets that were meant to save the ailing High Street, Pizza man eyes hottest meals, M&Ss future: pillow gizmos
Barclays and the Royal Bank of Scotland are to share in a £69m return from the collapse of Peacocks, despite the retailer’s pension fund being left with a £15.8m shortfall. The two banks – part of a 17-bank syndicate which backed the clothing retailer before its collapse in January – are to receive a likely pay-out from administrators of just over 51p in the pound as a result of funds reclaimed. In comparison, unsecured creditors, including the staff pension fund, suppliers and HM Revenue & Customs will receive just 0.28p in the pound.
Shares in Marks & Spencer jumped 8.3pc after speculation that private equity firm CVC had approached the retailer's management team about a buy–out. The high street retailer has been the focus of increasing market speculation in recent weeks after a number of banks began exploring options for a possible leveraged buy–out. Despite a denial from CVC that it was pursuing M&S, shares in the retailer still ended the day up 4.3pc, closing at 371.7p.
Debenhams will launch its first store in Russia this Saturday and has "big plans" to roll out more shops in what is set to become Europe' biggest retail market. The department store chain will open a 35,000sq ft shop – about half a football pitch – in Moscow's Mega Belaya Dacha mall via its franchise partner, Debruss. The store will showcase beauty and cosmetics ranges, homewares and all its exclusive Designers at Debenhams range. The UK retailer has already advanced plans for more stores in Russia, which is set to become Europe's biggest retail market by 2013-2014.
JJB Sports has less than two weeks to finalise a restructuring plan to safeguard its future. The troubled sportswear retailer's management is understood to have a deadline of 5 September to submit a proposal to the board, amid dire trading figures and rising debts. Wigan-based JJB warned in July that it needed fresh funds before the end of the year. But it had been thought the beleaguered retailer had until 29 September – the rent day for the final quarter – to put itself on a firmer financial footing. The earlier deadline suggests JJB's predicament could be more serious. But it is unclear if the time frame has been imposed by Lloyds Banking Group, the retailer's main lender, or by the group's management.
Pizza Hut UK suffered widening losses last year and has warned that the Olympics had dampened otherwise improved trading this year, as families watched TV rather than visit restaurants. Pizza Hut's owner Yum Brands earlier this year asked accountant PricewaterhouseCoopers to sell the British business to a "master franchiser" – Yum would still receive royalties – after a poor 2011. There are still a handful of potential private equity buyers, thought to include Endless, Rutland Partners and Risk Capital.
Evidence of an "Olympic bounce" in consumer confidence, as Team GB's record gold medal haul lifted national spirits, is expected this week despite the general weakness of the economy. GFK/NOP's closely watched index has been stuck deep in recession territory for more than a year, remaining at minus-29 for the past three months. And consumers are also back in recession after the Office for National Statistics reported a second successive quarter of falling household spending between April and June.
Mail on Sunday
A furniture shop owner who is causing uproar among local pub owners by giving away alcohol says he plans to spread his ‘revolution’ across the country. Former limestone salesman Simon Atkins, 42, has opened a shop called Innsatiable in Farnham, Surrey. It hands out free drink from noon until midnight every day. Customers can buy furniture, get free drinks and – if they want to – buy beer mats for £2.75 each. By setting up the business this way, according to Atkins, he doesn’t need a personal or premises licence and he is not tied to pub prices. ‘Pubs and breweries are ripping people off by charging such high prices,’ he told Financial Mail. ‘People think my idea is fantastic. I’m not breaking any laws. All duty is paid on the alcohol. It’s all legal and even the police drink here when they’re off duty.’
It was the most public of endorsements. Only two years ago, Ian Cheshire, along with several of Britain’s top bosses, put his name to an open letter supporting George Osborne’s plans to cut the deficit. Now the chief executive of Kingfisher – owner of the B&Q DIY chain – is not so sure that the Chancellor has got it right. ‘We have had a lot of practice at recession and at the moment I find it hard to imagine economic growth will come back,’ he says. Cheshire is tipped to become one of only four retail bosses after Sir Terry Leahy at Tesco and Marks and Spencer’s Sir Richard Greenbury and Sir Stuart Rose to hit profits of £1 billion-plus. But in the short term, he says: ‘The past three or four months have been unbelievably awful. It is safer to assume that the economy is not about to improve and we must just start from there.’
Retailers are standing by for a boost in business from customers ordering by smartphone this Christmas ahead of an expected surge in the use of 4G phones next year. They are already gearing up their stores for Christmas. Harrods launched its Christmas department last month, including a box of crackers with silver-plated gifts for £1,299, while Debenhams is expected to unveil its festive range within weeks. (Don't miss the Retail Bulletin's Mobile Retailing Summit 26th September 2012. Full details here http://www.mobile-retailing-summit.co.uk
Small shops want town halls to be allowed to levy higher taxes on supermarkets and out-of-town shopping centres to help cut the burden of business rates in the High Street. The call for a supermarket tax will come this week from the Association of Convenience Stores and follows legislation by Communities Secretary Eric Pickles allowing councils to reduce rates on some of the most beleaguered High Streets. The association, which represents more than 35,000 shops, is concerned that the Government is preparing for another rise in business rates. That is expected to lead to more closures.
They are being touted as the vibrant cure for Britain’s struggling High Streets. But as City investors look to capture the buzz generated by street markets, there are wider fears that they are in fact in dramatic decline – and can be expensive for council tax payers. ‘The number of markets across the country is declining,’ said Graham Wilson, chief executive of the National Association of British Market Authorities. Eight years ago the National Market Traders Federation had 40,000 members. That has fallen to just over 30,000 today. While there are successful markets in some areas of Britain, ‘in others, because of a lack of investment, markets are failing,’ Wilson said.Many blame the fact that one key element of many traditional markets – cheap clothing – has been lost under the assault of discount clothing retailers such as Primark and TK Maxx.
The former finance director of Pizza Express is teaming up with Lloyds bank to invest in new restaurant chains. Paul Campbell is setting up a £20m fund through his vehicle Hill Capital in partnership with LDC, the high street bank’s buyout unit. They will buy into restaurant businesses with a small number of outlets where they think there is substantial growth potential. They are expected to invest £1m to £4m in each deal.
Marc Bolland is hoping a gizmo that helps shoppers find the perfect pillow and a deli counter with more than 100 new types of fresh meat and cheese will lure people back to Marks & Spencer.On Wednesday, the chief executive of M&S will open a giant new store in Cheshire Oaks, near Chester, with his top management team. The 148,000 sq ft store is the flagship for Bolland’s £500m refurbishment programme. It displays “all of the latest thinking”, according to one insider.
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