Sunday Retail News Roundup
Directors should possess a deep understanding of their industry, acquired through practical, hands-on experience defined as technical expertise, market insight, industry networks and other specialist skills and attributes. Tesco had so lost touch with its business roots that not one serving non-executive director had direct experience in grocery retailing. A world-leading British business went badly wrong. The board of Whitbread has 10 directors not one of the six non-executive directors has any previous experience working in the hotel, coffee shop or pub trade which is what Whitbread’s business actually is. Nor do the chairman, the chief executive or the finance director. Shows such contempt for the tens of thousands of staff working in the field at Premier Inn, Costa and Whitbread’s pub restaurants. It is as if the understanding of the craft of hospitality possessed by their 50,000 employees counts for nothing. Whitbread has been making and serving food and drink since 1742. It has prospered for almost 275 years by employing people who know their stuff. When it came to hiring a new chief executive, instead of looking for one of the 2.5m people working in the hospitality sector, in 2015 the Whitbread board chose to recruit a bank manager.
Leon, healthy-living restaurant chain and rapidly expanding purveyor of fast food, has 43 restaurants, mainly in the capital and southeast England. In 2015, sales grew 48% to £37m and are expected to have risen sharply again in the past 12 months. The boss of KFC in Britain has said he wants to be more like Leon. Salad, fruit and carrot sticks have started to appear on the menus in McDonald’s. The high street has also changed dramatically since 2004. Back then, Woolworths was still trading and most towns had a Blockbuster video store. Now the whole high street is food. Later this year Leon boss, John Vincent, will take the chain’s lean, clean green shakes and falafel hot boxes to America land of the burger and the 60in waist.
Mail on Sunday.
A retailer selling personalised baby and child products has secured £5 million for expansion into the US. Prince George was wearing a dressing gown and slippers from the firm, My 1st Years, when he met US President Barack Obama last April. Founders Daniel Price and Jonny Sitton launched the company, which has a £7 million turnover, in 2010 and have since extended the product range to include bath robes, clothing, bedding, storage, suitcases, backpacks and toys. The latest growth funding round was led by investor Beringea and supported with funds managed by investment group Hargreave Hale. Previous funding was secured from high net worth individuals, including Lord Alliance, co-owner of fashion group N Brown. It brings the total raised by My 1st Years to £7million. The company launched in Harrods last month and has also partnered John Lewis and Selfridges.
Fred Done has added to his estimated £1.3 billion fortune by taking a £10.2 million dividend from the firm he set up in 1967. Accounts just filed for the Betfred Group, owned by Done and family, revealed the £10.2 million payout as well as a jump in turnover for the year to September 25, 2016, from £526 million to £579 million. £10.8 billion was gambled last year via Betfred, which owns 1,358 betting shops and the on-course pools betting business, the Tote. It also has an online operation. After paying betting and machine gaming duties and a £10.2 million horse-racing levy, plus costs and other expenses, Betfred Group recorded pre-tax profits of £32.4 million. It recently acquired 322 more shops for £55 million, which came on the market after the merger of Ladbrokes and Gala Coral.
A last-minute rush for Christmas presents, which lifted retail sales in December, was a silver lining to what was otherwise a bleak year for the British fashion market, according to the latest figures. The British Retail Consortium revealed that retail sales in December were 1 per cent up on the year before on a like-for-like basis. Retailers including Marks and Spencer unveiled upbeat figures for the holiday season. But results from Kantar Worldpanel, a leading analyst of shoppers’ behaviour, reveal that the British fashion market, including clothing, footwear and accessories, saw sales for the whole of 2016 fall 2 per cent on the year before.
An investment fund backed by ex-BBC boss Greg Dyke and former Diageo chief Paul Walsh has secretly bought a major stake in British burger chain Hubbox. Provenance Investment Partners took a chunk as part of a deal that values the restaurant group at around £5 million. Hubbox was set up in 2003 by restaurateur Richard Boon in St Ives, Cornwall, with a view to serving American-style food, sourced from local farmers and bakers. Boon had sold a stake to the private equity firm for £2.2 million to help fund expansion of Hubbox, which won a national burger award in 2015 for its Big Kahuna.
British firms were each subjected to an average of almost 230,000 cyber attacks in 2016. They come in a variety of formats, from fake invoices to excel documents and attachments and the average volume of attacks hitting individual company firewalls passed the 1,000 per day mark for the first time in November. The Payment Card Industry Security Standards Council suggest that UK firms could face up to £122 billion in fines for cybersecurity breaches in 2018.
Goldman staff in BHS probe should donate to pension fund. Among the top earners at Goldman Sachs investment bank’s London office will be the former co-chief Mike Sherwood, who faced questioning from MPs last year over the bank’s role in the BHS scandal. He landed a $21 million pay and bonus package last year, worth £15 million at the time. But Sherwood, along with other London-based staff at the bank, will further benefit this year from the slump in the pound. Huge payments to bankers who worked on the BHS deal could prove particularly controversial. Frank Field MP, chairman of the Work and Pensions Select Committee which quizzed the Goldman bankers on the deal, said this gives them an ideal opportunity to donate something to the pension funds, to make partial amends for the failure to give effective advice.
Mary Portas is urging the Government to overhaul the archaic business rates system. The so-called Queen of Shops, who was commissioned by former prime minister David Cameron in 2011 to review the state of the high street, has met Business Secretary Greg Clark to press for a freeze on looming rates rises. Ms Portas said that the business rates system was the biggest catastrophe facing retail. High street shops’ bills will rise by £1.56bn out of a total projected rise of £2.26bn for the retail sector through inflationary rises.
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