Retail round up Â– The Sunday Papers
Virgin Media on the hunt for new stores, Bank cash vital to Blacks Leisure, Tesco back electric cars, Vodafone climb-down over bonuses, edible identity tags on the menuSunday Telegraph
Virgin Media is planning to blitz the high street with about 50 new own-branded stores, to exploit the cheaper rents and incentives on offer to landlords. In a year when as many as one in every 10 high street shop is expected to stand empty, the group intends make the most of cheaper high street prices and expand its presence in key city locations, including two shops in prominent sites in London's West End. Virgin Media has already tested the appetite for a presence on the high street, opening stores in Birmingham, Plymouth, Bromley, Leeds and Leicester. The expansion will see Virgin Media stores in up to 80 locations within the next year.
The Independent on Sunday
Anger from British staff at Vodafone, the London Stock Exchange's fourth- biggest company, has forced the telecom giant's UK management into an embarrassing climb-down over plans to scrap bonuses. Just weeks after the group posted pre-tax profit for the year to the end of March of £4.1bn, Vodafone is paying its UK staff bonuses equal to 2 per cent of their basic salaries. It is not known the total amount this will cost the company.In March, Guy Laurence, Vodafone's UK chief executive, infuriated the company's 10,000 British staff by telling them bonuses would be scrapped, irrespective of performance, and salaries frozen. But in a confidential memo sent to staff last Thursday, Mr Laurence told them that he had "some good news which I know you'll be interested in. 'Over the past few months I've seen some changes in our company which are really good signs," he said. "There's now a general acceptance that we are in a turnaround situation and that this requires change. There's no doubt that people are starting to take this seriously and taking action. Having discussed this at length with my management team we feel it is important to recognise the work that went into last year ... therefore we have decided to make a one-off bonus payment of 2 per cent of your average basic salary.'
Financial Times Sat / Sun
Blacks Leisure fell deeper into the red after another tough year for its struggling boardwear business but vowed to press on with its restructuring, providing that Lloyds Banking Group agrees to lend the owner of Milletts more money. Neil Gillis, who was parachuted in as chief executive 18 months ago before embarking on a plan to cut costs, offload the boardwear business and revitalise the tired Blacks and Milletts brand, said much now depended on how successful the retailer was in extracting more cash from its bankers. It is in talks to put in a new credit line, having extended its £35m ($57m) facility to the end of August, and also needs Lloyds to lend it at least £7m to press on with converting its boardwear stores - trading as Freespirit and O'Neill - into Blacks or Milletts outlets.
Tesco is backing electric cars. The food retailer is to start providing charging facilities in its car parks for battery-powered vehicles. The new initiative, which will start in London, could be rolled out nationally if it proves a success with customers. It underlines the priority that all retailers are placing on promoting green issues. Sir Terry Leahy, Tesco's chief executive, told The Sunday Times: 'As Arnie Schwarzenegger, the governor of California, has said, 'you have to make it cool to be green'. Businesses have to show how the consumer can make a difference.' Tesco will test the electric-car facility at two stores. The intention is to recharge a battery within two hours, but it is in talks with several companies to see if this can be shortened.
Borrowings have ballooned at Kwik-Fit,forcing it to warn of a risk of breaching banking covenants. The private-equity owned company, which supplies 5m tyres a year in Britain, saw net debt rise by £96m to £822m last year. A third of its loans are in euros, which have appreciated sharply against sterling. At the same time, Kwik-Fit's earnings from the Continent have been hit and the carrying value of its loss-making German business has been written down to zero. The company, which is chaired by David Reid, the chairman of Tesco, warned it was vulnerable if the recession knocked earnings growth and the pound remained weak against the euro.
The company behind one of the best-selling handbag brands in the UK is to double in size by snapping up a rival marque in a deal worth up to £15m. Synova Capital, a buyout fund chaired by one of Britain's wealthiest men, Poju Zabludo-wicz, already owns the Fiorelli brand after buying its owner, Lunan Group, last summer. It will announce the purchase this week of rival brand Nica for an estimated £10m to £15m. The fashion group, since renamed TLG Brands, will have sales at retail of about £50m following the deal. Profits at the group are also expected to rise significantly.
The Mail on Sunday
Many thought they had seen the last of High Street retail investor Baugur after its Icelandic bank backers finally lose patience in March and pulled the plug on its estimated £1 billion debt. Bur the firm's top two executives have quietly clawed back influence at several businesses previously controlled by the group. Former Baugur chief executive Gunnar Sigurdsson has been reappointed to the House of Fraser board after stepping down last year, according to a filing last week at Companies House.
Microscopic edible identity tags are to be launched as the latest weapon for luxury goods manufacturers and food and drug makers in a £600 billion-a-year battle against counterfeiters. Smiths Group, which makes everything from airport luggage scanners to medical devices, has developed the revolutionary security markers that are smaller than the diameter of a human hair. They are the first edible and intelligent tags and will help companies protect their brands and the integrity of their supply chain.
Top-level official talks have been held to plan a crackdown on unscrupulous operators who mislead customers into believing they can walk away from their debts. People struggling with their borrowings can pay £1,500 in fees for every separate credit agreement, believing a legal loophole will wipe the slate clean, only to learn later that their debts still stand. But the fees are not refunded. And with an estimated 100,000 cases, the business could be worth £150m.
Waste management group Shanks has won a prestigious contract to recycle Marks and Spencer's daily surplus food from its 600 stores and turn it into fertiliser for farmers and biofuel for green energy.
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