Sunday News Roundup
Richard Glynn faces axe if digital business is unable to capitalise on football tournament. Ladbroke's investors have warned the struggling bookmaker’s chief executive, Richard Glynn, that he faces the axe in August unless he hits six key “milestones” by the World Cup to overhaul its underperforming digital business. Mr Glynn faces a race against time to ensure the bookie’s online division is in a sufficiently strong position to capitalise on the World Cup, although investors are aware that the benefits of a partnership with the gaming software firm Playtech will not starting filtering through to Ladbrokes’ financial results until the second half of the year.
Gaming chiefs say facts are being ignored in emotional focus on problem gambling. In 1961, the UK Government took the decision to legalise off-course betting shops because it was understood that effective regulation was far better than prohibition. Today, a visit to the local bookies remains a safe and popular pastime for eight million customers each year and our industry has evolved over time as new forms of gambling have become popular, including gaming machines since 2002.
Web property chiefs inject cash into site for buying new cars from franchised dealers. The founder of property search website Zoopla has invested in a website which aims to help car buyers in the way he has helped house buyers. Alex Chesterman, founder and chief executive of the online property giant, is one of three Zoopla directors to have helped to inject £1.3m of funding into carwow. Carwow, which was founded by 27-year-old James Hind, began life as a car research site but has morphed into a platform to help buy new cars from franchised dealers.
Brown-Forman could fill gap in “brown spirits” cabinet, Bacardi chief suggests. Bacardi, the world’s largest privately-owned spirits group, is lining up a move in the bourbon market, with Jack Daniels owner Brown-Forman suggested as a possible target. Ed Shirley, chief executive of the Bermuda-based group, said in an interview with The Sunday Telegraph the company wanted to fill a gap in its drinks cabinet for “brown spirits”.Industry consolidation is continuing with Japan’s Suntory agreeing to buy America’s Jim Beam bourbon brand earlier this month and Scotch whisky group Whyte and Mackay put up for sale by India’s United Spirits.
About 1,600 jobs at Internacionale, the women’s high street fashion chain, are expected to be axed as it prepares to appoint administrators this week. The retailer is likely to be wound down after it was taken over by Jason Granite, a former City trader who specialises in snapping up troubled businesses. Granite took control of the company, and its 110 stores, after buying the loans of its controlling shareholders in a cut-price deal. He is planning to bring in PwC, the accountancy giant, as administrator tomorrow.
A husband and wife from Coventry have netted tens of millions of pounds by selling a stake in their sports nutrition business to private equity. Alan and Juliet Barratt, who started Grenade five years ago, sold a majority share to the buyout group Grovepoint Capital in a deal valuing it at £35m. Bradley Fried, one of Grovepoint’s founders, will become chairman. Grenade sells fat-loss and muscle-gain products with ingredients such as algae, green tea and cayenne pepper. Fried said it had the potential to replicate the success of Maximuscle, the protein shake maker built up by private equity before being bought by Glaxo Smith Kline.
One of Tesco’s biggest investors has defended Philip Clarke, the supermarket chain’s chief executive, as he prepares to abandon a key profit target. David Herro, chief investment officer at Harris Associates, the Chicago-based asset manager, said the aim of delivering a 5.2% profit margin was “too monolithic, especially in the short and medium term”. Clarke pledged to hit the number two years ago after Tesco’s first profit warning. On Tuesday, Clarke and his top team — including the under-fire finance director, Lawrie McIlwee — are due to give investors a strategic update.
The chief executive of LK Bennett has been ousted after the fashion retailer’s private equity owners were forced to pump in millions of pounds in a refinancing. The womenswear chain confirmed this weekend the departure of Didier Drouet, who had been in the role for little more than a year. Robert Bensoussan, chairman and co-founder of Sirius Equity, one of LK Bennett’s investors, has taken on executive duties. The move comes after Lloyds Banking Group stepped down as the company’s main lender last summer. It was replaced by Burdale, which often acts as a lender of last resort. Sirius and Phoenix Equity Partners had to inject extra cash in the deal.
Patisserie Valerie is drawing up plans for a float that could value the cafe chain at more than £150m. A listing would deliver a big profit for its majority owner, Risk Capital, the investment firm co-founded by Luke Johnson, the entrepreneur and former Channel 4 chairman. Johnson bought the chain in 2006 in a deal worth a reported £8m. At the time it had 11 branches and was breaking even on sales of about £5m. Today, it is on course to generate earnings before interest, tax and other charges of £14m this year from about 90 outlets across the country. Patisserie Valerie, which opened its first branch in Soho in 1926, is understood to be working with Canaccord Genuity, the stockbroker, and could list in late spring.
Mail on Sunday
Supermarket giant Morrisons’ beleaguered management team is preparing to mount a fightback that includes plans to return up to £1billion to shareholders. Sources said the company is in the final stages of identifying property assets in its £9billion portfolio to sell on the open market and then lease back, in order to pay a one-off dividend. Morrisons, which declined to comment, is struggling with falling sales and has been criticised for being slow to react, as customers favour convenience stores and online delivery. It is also being squeezed by discounters Aldi and Lidl.
The first e-cigarette launched by British American Tobacco is selling well, the giant is expected to reveal in its full-year results this week. But the Vype won’t contribute to profits of up to £5.7billion. BAT introduced the Vype last summer and has a multi-million pound TV and print advertising campaign with the slogan ‘experience the breakthrough’. Tobacco advertising was banned a decade ago.
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