Retail Round up - Sunday News Papers
17 June 2012 | by The Retail Bulletin
Rose returns to high street, Dixons sales defy the gloom, Lipton puts City hotels on the block for £170m, Zara boss finds London haven, Asda outshines competitors as sales for supermarkets stagnate, Retailers push for rent cut as High St fights for survival, Two more British grocery brands go overseas, Sir Ken's fears over Morrisons strategy, Profits fall at Dixons, Sweet Dreams? Refinancing edges closer, Vodafone holds for Orbis.
The Times on Sunday
Rose returns to high street
Sir Stuart Rose
has made a surprise return to the high street by becoming chairman of Blue Inc
, the fast-growing discount fashion
chain. It is Rose’s
first retail job in Britain since he left Marks & Spencer 18 months ago. He is a non-executive of Woolworths
, the South African food and clothing retailer. Last year, Rose
invested his own money in Blue Inc
, which has close to 200 stores and a 2,000-strong workforce. Fellow backers include the billionaire Reuben brothers.The business, led by Steven Cohen
, the managing director, is on track for sales of £80m and profits of £5.5m this year — respective increases of 70% and 82% from last time. Rose said: “I like backing teams that I believe in. It’s a great business that is performing well.”
Dixons’ sales defy the gloom
Dixons will this week reveal a surprise jump in sales, offering hope that shoppers’ confidence may be returning. The company behind PC World and Currys is expected to show an 8% increase in like-for-like sales for the 13 weeks to the end of May. The positive news will be unveiled alongside the company’s full-year results, but recent trading will do little to offset dismal overall figures. Analysts expect the group to report a fall of almost 20% in full-year pre-tax profits to £69.2m and a small drop in sales to just over £8 billion. Group profits have been dragged down by the poor performance of Dixons’ businesses in Italy and Greece — where losses ballooned from £18m to £30m. Sales in Britain, where the chain has about 640 stores, were helped by woes at rivals Comet and Best Buy.
Lipton puts City hotels on the block for £170m
Sir Stuart Lipton and Elliot Bernerd’s property company has put two City hotels up for sale for about £170m. Chelsfield wants to find a buyer for the venues close to St Paul’s cathedral and Leadenhall Market and has hired Knight Frank, the property agent, to handle the sale. The developer has owned the hotels for more than five years. The properties trade under the Club Quarters brand, which takes a different approach from normal hotel operators in that it tries to sign up companies and other organisations as members, offering better rates to staff of participating firms. Guests do not have to be members to take a room.
Zara boss finds London haven
The founder of the Zara fashion
chain is close to clinching a £160m property deal in London’s West End. Amancio Ortega
, Spain’s richest man with an estimated fortune of €31 billion (£25 billion), is in talks to buy 333 Oxford Street from Deka
, the German fund manager. The building is home to Zara’s flagship store and has offices above. Sources said the deal was due to be signed tomorrow. Ortega’s move comes as investors search for safe havens amid fears that Greece could quit the eurozone and Spain could need a full bailout. Property in central London has been compared to gold because of its resistance to economic shocks. Ortega, 76, has already spent more than £200m buying Oxford Street buildings since 2010.
The Mail on Sunday
Asda outshines competitors as sales for supermarkets stagnate
Asda has outshone its supermarket competitors in the battle for the Diamond Jubilee shopper, figures are expected to reveal this week. Customers are understood to have responded to its Every Day Low Prices marketing message compared with discounts offered by competitors. Recent sales figures from the chain’s three big rivals, Tesco, Morrisons and Sainsbury’s, have alerted the markets to an increasingly difficult grocery sector. Until the past 12 months, supermarkets were regarded as well insulated from the consumer downturn. The market share data released by market researcher Kantar on Tuesday is expected to show Asda led the pack in the four weeks to June 10.
Retailers push for rent cut as High St fights for survival
Retailers will push for further cuts in their rent in what has been identified as a fundamental issue in the drive to save Britain’s shops. The landlord to Allders in Croydon, south London, which claims to be Britain’s third-largest department store and which went into administration last week, has agreed an indefinite rent-free period if a new owner can rescue the store. Minerva is understood to want to maintain the area around Allders for retail while it pursues development plans for the site.
Two more British grocery brands go overseas: Sarson's vinegar and Haywards pickles are gobbled up by Japan's Mizkan
Their vinegar and pickles have been staples on chip shop counters for more than 150 years. Now the quintessentially British brands Sarson’s and Haywards have become the latest UK food brands to fall into foreign hands. The leading vinegar brand and pickles businesses were today sold by Premier Foods to Japanese firm Mizkan in a £41 million deal. The agreement is just the latest in a long line of sales of Britain’s favourite food brands to foreign companies in recent times.
Sir Ken's fears over Morrisons strategy
Sir Ken Morrison, the former chief executive of Morrisons, has warned that the retailer’s management team risks losing touch with its customers if it continues to take the shops too upmarket.Sir Ken, who ran the supermarket business for 55 years, said he was confused over what the current management team was trying to achieve.He told The Sunday Telegraph: “Morrisons was a company with very clear objectives. Those objectives now are just a little bit more difficult to perceive. You can’t compete with everybody.” His criticisms will have bite because the company is experiencing a serious wobble in its sales growth and market share. In May it said its underlying sales had fallen for the first time since the departure of Sir Ken in 2004.
Profits fall at Dixons
New boss James set to boost customer service investment
The new chief executive of Dixons Retail will flesh out his strategy for the Currys owner this week, with full-year profit expected to be down by a fifth. Sebastian James will provide an update on the early impact of the Euro football tournament on sales of TVs and laptops, but that comes too late to rescue poor figures. However, they are still likely to compare favourably with those from Home Retail's Argos and the former owner of the Comet chain this week.
Sweet Dreams? Refinancing edges closer
Dreams, the struggling bed retailer, will move a step closer to a refinancing package this week when advisers to its banks make presentations on the management's strategic plans. The 270-store retailer's main lender, Royal Bank of Scotland, instructed the accountancy firm Grant Thornton and Pragma Consulting to conduct due diligence on the business plan of Dreams' chief executive Nick Worthington and chairman Steve Johnson.
Vodafone holds for Orbis,
Vodafone has a history of getting its own way in takeovers – so the form book suggests we should back the mobile phone giant to complete its £1.04bn offer for Cable & Wireless Worldwide when shareholders vote on Monday. Still, there remains a small chance of a poor reception for the 38p-a-share bid from some fund manager called Orbis. For reasons best known to itself, Orbis has been building a 19% stake in CWW – more than doubling its stake at an average of 53p a share over the past two years. Its clients will take a painful hit if the current offer goes through, but at least the chunky holding means it could conjure up some interference, as Vodafone needs 75% of the vote.
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