Retail round up - The Thursday papers
The Daily Telegraph
Reckitt Benckiser, the consumer products giant whose range includes Dettol disinfectant and Lemsip, raised its earnings forecasts for the year as shoppers kept buying its branded products despite the squeeze on spending.The company now expects sales to rise by 5pc to 6pc and profit to increase by 10pc to 11pc, up from targets of 4pc and 8 to 10pc respectively.Bart Becht, chief executive, said the company continued to increase its market share in Western Europe, despite the recession driving demand for supermarket's own-brand goods.Full article here.
Tesco, Britain's biggest retailer, has called on Alistair Darling, the Chancellor, to postpone the rise in VAT due at the end of this year, urging him to chose a "more sensible date".Tesco is the latest in a long line of retailers and businesses to back the campaign by the Daily Telegraph to delay the rise from 15 pc to 17.5 pc on January 1.Leading figures in the retail and hospitality industry, including Sir Philip Green and Sir Stuart Rose, have argued it will be an "administrative nightmare" to implement the change not only on a Bank Holiday, but also at the busiest time of the year for restaurants, hotels and shops. Full article here.
Car-parts and bicycle retailer Halfords has launched a campaign for VAT on children's bikes and cycling equipment to be cut to 5pc.David Wild, chief executive, said that such a reduction – from current levels 15pc – would help to improve children's health and boost the economy. Halfords has had meetings with MPs and will launch a consumer campaign to back the push next month.Mr Wild said: "The average child needs five bikes during childhood as he or she grows up and yet they are charged full VAT. There is a strong argument to drop this."
UK house prices rose for a third straight month in July, according to the latest survey from Nationwide, which said it's now a 'reasonable' prospect that prices end 2009 higher.The average price of a UK home climbed 1.3pc in July, according to the latest figures from Nationwide Building Society released on Thursday. That leaves prices up 2.6pc over the last three months - their best run of gains since the start of 2007.Martin Gahbauer, chief economist at Nationwide, said that the chances that prices gain for the year is "not an unreasonable prospect given the momentum now in the market." While prices remain 6.2pc down compared with July last year, they are now up 1.3pc so far this year, according to Nationwide. Full article here.
Lombok, the 19-store upmarket furniture retailer, has been bought out of pre-pack administration by a private equity-backed consortium after it became the latest furniture chain to collapse.The new consortium, led by the turnaround specialists Privet Capital and Paradigm, and Lombok's management team, will take the retailer forward with 14 stores, but will shed 5 outlets. Lombok appointed the accountancy firm KPMG as administrator yesterday.The deal secures 124 out of 161 jobs at the retailer – and protects the deposits and delivery of all orders placed by customers. Pre-packaged administration allows a company to enter administration and then to be quickly bought by new owners with reduced liabilities. For retailers, this typically enables them to ditch unprofitable stores, a process that has generated anger among landlords.Full article here.
HMV shares fell more than 2 per cent yesterday as the City digested the news that Simon Fox, the man who has been instrumental in the reshaping of the retailer, could shortly be moving into the world of broadcasting.History may be about to repeat itself. ITV is arguably the toughest job in its sector, a label that could have applied to HMV when Mr Fox, 48, took the helm in 2006. Then the retailer was threatened with the rise of online sales, digital downloading, competition from supermarkets and increasing costs.But fast-forward three years and following an "extreme makeover" that has seen greater product innovation as well as a slimming down of the business, Mr Fox is widely credited as having nursed the company to better health. Full article here.
Visa, the world’s largest electronic payments network, on Wednesday reported higher third-quarter profit as consumers increasingly turned to credit, debit and charge cards to pay for goods and services.Net income grew 73 per cent to $729m, or 97 cents a share, in the three months ending June 30, from $422m, or 51 cents a share a year earlier, the company said in a statement. Excluding the impact from the sale of the company’s stake in VisaNet do Brasil, adjusted quarterly net income was $507m, or 67 cents per share. Full article here.
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