Sunday Papers Roundup
Electricals giant AO drives sales surge through social media, Investigation into Tesco's £250m profit shortfall unearths 'corruption' of culture, HMV stages £17m comeback, Osmond rediscovers taste for restaurants with Strada feast, Greene King to raise Spirit bid, Tesco ignored first warning of missing £250m, Don't shred a thing, new Tesco chief warns staff as profit shortfall probe digs deeper, Debt-laden Pret a Manger turns £500m sales into a loss amid hefty interest payments, Sitting pretty at Made.com as furniture website's sales hit £26m
AO has cited Facebook as a major sales driver for its washing machines and other white goods. The listed electricals retailer now posts daily on the social networking site and has generated 1.6m “Likes” on its official Facebook page. “That’s double the number of likes that John Lewis has,” founder John Roberts, 41, told the Telegraph. “When you think we only sell electricals, that’s quite an achievement.”
The investigation into a £250m black hole in Tesco’s profits is centring on the culture of the retailer, with concerns that managers may have been pressurised into using improper practices. A source said there were fears there had been a “corruption of virtues” among staff and that the key to the investigation was establishing “what led people to do these things” and “why people didn’t say things earlier”.
HMV is staging a dramatic fightback, less than two years after it was saved from collapse. Annual accounts seen by the Telegraph show that the high street chain racked up nearly £17m profit in the 11 months after it went into administration. The retailer went under in January, 2013, with £170m of debts threatening the closure of 223 shops and the future of more than 4,000 jobs.
Hugh Osmond will make a return to the restaurant industry this week — 13 years after leaving Pizza Express — with the £37m purchase of the Italian dining chain Strada. The entrepreneur, who made his first fortune from Pizza Express after helping bring it to the stock market in 1993, is buying the Strada brand and 43 branches from Café Rouge owner Tragus. He said further funds would be invested in expanding the chain.
Green King the pub operator and maker of Old Speckled Hen beer, is weighing an improved £700m offer for rival Spirit, owner of Chef & Brewer. Rooney Anand, chief executive of Greene King, had an all-share offer of 100p rejected by Spirit this month. It valued Spirit at £661m. Senior City sources said he was likely to return with a higher offer. Analysts have suggested Greene King would need to bid at least 110p per share to succeed.
The insider who blew the whistle on Tesco’s £250m accounting scandal tried to raise the alarm when Phil Clarke was still in charge but was ignored, The Sunday Times can reveal. The whistleblower, an accountant reporting to UK finance director Carl Rogberg, raised concerns with superiors but “failed to get traction”. The disclosure raises new questions over potential governance failings at Britain’s biggest grocer.
Mail on Sunday
Tesco chief executive David Lewis has ordered staff not to shred or delete documents as lawyers and accountants probing the huge profit shortfall at the supermarket giant conduct dozens of interviews. The investigation into the accounting scandal is likely to reach back into historic accounts and fears are mounting that the group could be forced to restate its results from last year. Tesco’s profits for 2013 were £3.3billion, but forecasters predict that this year’s figure could be down by more than a third to £2.1billion. The Serious Fraud Office and Parliament’s Business Select Committee are both watching the situation closely.
It made 64million sandwiches, 47million cups of coffee and sold 4million bananas in 2013. But the one thing Pret a Manger didn’t make was a profit, because once again the sandwich chain’s operating profits were wiped out by hefty interest payments. Accounts just filed for its parent company PAM Group show that turnover for the year to January 2, 2014 rose by 15 per cent to £509.9million, topping the half billion pound mark for the first time, giving a group operating profit of £40.1million.
Sales at online furniture retailer Made.com are soaring as shoppers flock to its website, which specialises in contemporary designs. The company, based in Notting Hill, West London, and backed by Lastminute founder Brent Hoberman, said sales in its last financial year rocketed 68 per cent to £26.2million. Chief executive Ning Li said momentum since the year end in December has continued as investment in a mobile and tablet-friendly website has paid off.
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