Sunday Papers Roundup
Melon juice start-up secures Ocado deal, Key Tesco investor cuts stake, RAC gears up for £2bn listing with offer for members, Iceland Foods in £950m refinancing, Reality check for UK supermarkets, Co-operative members back radical shakeup to 'rebuild business' , Now replace me, says Co-op chief Ursula Lidbetter after members back reforms to modernise the troubled mutual, Savers chain celebrates a sales bonanza as promotions attract cash-strapped shoppers, Sainsbury's in fashion offensive as it begins to sell clothing range TU online, Tesco needs radical and imaginative solutions to stop its decline, Conrans meal deal, Blank sheet for new Tesco chief, Ryanair looks to use Airbus on routes to America, Daves battle to save Tesco
The Middle Eastern staple has been brought to the UK by Mello founder Rose Aldean. The young company, founded by the 27-year-old, is the first raw melon juice brand in the UK, and will sell two varieties through the online supermarket: cantaloupe and watermelon. The deal is expected to generate as much as £100,000 in revenue for Mello in its first year. Further contracts with Whole Foods Market, Planet Organic, Harvey Nichols and other independent stores will take sales to £150,000.
Chief investment officer of Harris Associates, a US investment fund which was Tesco's seventh-largest shareholder, said it has sold two thirds of its stake in the struggling supermarket. David Herro, which until the sell-off was Tesco’s seventh largest shareholder, said that he had reduced the investment from about 3pc of the business to about 1pc in the absence of a clear strategy. “We have sold, in the last month, probably two thirds of our position,” he told The Sunday Telegraph this weekend.
Car breakdown business RAC is hoping to cash in on its base of loyal motoring members by including a retail offering when it pushes the button on a stock market listing in the coming weeks. RAC, founded as the Royal Automobile Club in 1897 by motor enthusiasts, has 8.2m total members, with 6m having bought policies directly from it.
Iceland Foods has returned to the public markets for the first time in almost a decade as the result of a £950m refinancing. The food retailer, run by founder and chief executive Malcolm Walker, has completed the major refinancing to repay loans issued at the time of his management buy-out of the business in 2012.
A profits warning on your last day is not the way any chief executive envisages leaving a company. But after 40 years at Tesco, that is what happened to Philip Clarke on Friday.The outgoing Tesco boss was said to be at a “family engagement” on the day, so was not in the office as Britain’s biggest retailer issued a brutal profit warning and cut its dividend by three quarters.Sir Richard Broadbent, Tesco’s chairman, has said that Clarke will be “available” to new boss Dave Lewis until January.
A radical shakeup of the crisis-hit Co-operative Group has been backed overwhelmingly by its members at a special general meeting in Manchester on Saturday. More than four-fifths voted in favour of the plans, which were drawn up after the mutual last year announced a record £2.5bn loss.The plans include reform of the food-to-funerals group's governance, with elected directors largely replaced by professional business people on a smaller board and a move to a one-member, one-vote system.
Mail on Sunday
Ursula Lidbetter, chair of the Co-operative Group, is to make finding her own replacement her top priority after delegates to a special meeting voted for sweeping reforms to the organisation’s board. Hailing yesterday’s vote as a ‘momentous and defining moment’ for the Co-op, Lidbetter said the new chairman was crucial as they would implement the reforms. The meeting in Manchester voted 83 per cent in favour of the reform package to see the group’s board shrunk from 20 to 11 members.
Discount health and beauty group Savers is enjoying booming sales as its cut-price offering attracted cash-strapped shoppers. Savers – seen as the Aldi or Lidl of the health and beauty sector – saw sales jump by 15 per cent last year to £247million, according to accounts filed at Companies House. Profit at Savers increased 30 per cent to £9million. The chain, with 253 stores, belongs to Hong Kong-based Hutchison Whampoa, which also owns Superdrug but aims at bargain-conscious shoppers.
Sainsbury's began selling its clothing range on the internet this weekend as part of a plan to turn its fashion lines into a £1billion business. The supermarket’s fashion label TU will itially be available only to some customers in the Midlands, but a UK-wide launch is expected next year. Sainsbury’s non-food director James Brown said the brand has received significant investment and the number of in-house designers has been doubled to about 30.
The scale and pace of the revolution in retailing is becoming ever clearer as Tesco’s latest profit warning and the accelerated exit of its chief executive demonstrate. For stores groups caught up in this turmoil there is no simple answer and no one-size-fits-all solution. This is a time of fragmentation, most obviously in the way the supermarket giants are being challenged by Lidl and Aldi. But this fragmentation is happening all over the place in retail.
The retail and design consultancy founded by Sir Terence Conran swung into profit last year thanks to the sale of its restaurant investments. Conran Holdings was boosted by a one-off gain of £6.4m from selling its stake in D&D London, operator of top restaurants such as Pont de la Tour, Sartoria and Quaglino’s. Accounts for Conran Holdings, the first since the designer’s son, Jasper, took over the running of the business, show pre-tax profits of £4.3m in the year to March, compared with a £3.6m loss for the previous 12 months.
Tesco has given its incoming chief executive a “blank sheet of paper” to map out the company’s future, raising the prospect of radical change at Britain’s biggest grocer. Dave Lewis, head of Unilever’s personal care business, is being parachuted into the job a month early after a profit warning on Friday. Tesco slashed its interim dividend by three- quarters and reined in spending. If the final dividend is also cut that will free up £1.3bn of firepower.
Ryanair may break its exclusive tie-up with Boeing by ordering Airbus jets to start transatlantic flights. The Irish carrier, which is developing plans for a low-cost service between Europe and America, said it would fly either Airbus A350s or Boeing 787 Dreamliners, connecting airports such as Dublin, Stansted and Milan with Newark, JFK and Boston. It currently has a fleet of about 300 Boeing 737s, with another 180 of the aircraft on order.
Another profits warning has forced the supermarket giant’s new chief to arrive a month early. On Friday, after data showed Tesco’s sales fell 4% in the past three months, Britain’s biggest grocer issued a severe profit warning. Tesco slashed its interim dividend by three-quarters, curbed spending on IT and store refurbishments and said its trading profit would drop nearly a third to £2.5bn. Its incoming chief executive, the Unilever hotshot Dave Lewis, cancelled a holiday and will parachute in tomorrow — a month early. Sir Richard Broadbent, Tesco’s chairman, said the raft of decisions had “not been taken lightly”.
Email this article to a friend
You need to be logged in to use this feature.
Please log in here