Sunday Retail News Roundup
Goldman Sachs BHS grilling, Dont listen to lawyers, Watchdog forces banks to push rivals cheaper deals, BHS £1 deal led to £8million fees, Chilango VAT stand-off taxman wins, Topshop protesters London demonstration, Tesco brand was badly dented, Asda adds Yorkshire grit to low prices.
Goldman Sachs has been ordered by parliamentary inquiry to account for its role in Sir Philip Green’s disastrous £1 sale of BHS. Anthony Gutman, one of the top London bankers, will face questions from MPs on his part in the deal. Such scrutiny will be awkward for Goldman, which prides itself on giving discreet advice to blue-chip clients. A joint business and work & pensions committee is also understood to have called senior figures from law firms Linklaters and Nabarro, and the accountants Deloitte and PwC, all of which advised Topshop billionaire Green in some capacity. The law firm Olswang and accountants Grant Thornton, the main advisers to Dominic Chappell, the serial bankrupt who bought BHS, only for it go into administration last month, will also appear on a separate date. Green’s advisers are due to appear in parliament on May 23, when MPs also plan to grill key directors of Green’s Arcadia retail empire.
Thomas Cook boss Peter Fankhauser apologised for two tragic deaths, ending nine years of corporate silence. Thomas Cook does not sell holidays in stately homes or castles, but when Peter Fankhauser took over as chief executive of Britain’s second-largest tour operator 18 months ago, he began to feel like he was in one, a haunted one. “There was a ghost in the company that affected everyone,” he recalls.
Banks will be forced to help customers find cheaper overdrafts and loans as part of a crackdown on the big four lenders. The Competition & Markets Authority (CMA) is expected to demand this week that banks fund a price-comparison service. The recommendation will be part of the latest findings of the investigation into the dominance of the big four, Barclays, HSBC, Lloyds and Royal Bank of Scotland.
Mail on Sunday.
City advisers behind last year’s controversial £1 takeover of BHS reaped more than £8million for their work. Law firm Olswang was paid £3.7million and accountants Grant Thornton earned £4.4million in just 13 months, working for the store group’s new owner Retail Acquisitions (RAL). The sums include £1.2million each as a success fee for arranging the deal, but the rest was earned for other advice to the new owners, whose plans ended with BHS collapsing into administration two weeks ago.
The taxman has won a £1million VAT stand-off with fast-growing Mexican restaurant chain Chilango over whether burritos are hot or cold snacks. A judge ruled against the chain, which claimed its burritos, tacos and other items were cold food. Sold to be taken away cold, they are zero-rated while VAT of 20 per cent is due on hot food to go. Tribunal judge Barbara Mosedale decided that customers expected hot food. The fact that parts – guacamole, sour cream and salsa were cold did not justify zero-rating.
Protesters in central London blocked traffic in a demonstration against Topshop and Sir Philip Green, the chairman of the Arcadia group that owns the store. After congregating outside the company’s flagship store in Oxford Circus, between 150 and 200 protesters from a number of organisations stood in the road stopping buses and cars and chanting, “Topshop, shame on you”. The demonstration was organised as part of a campaign for a real living wage for cleaners at the fashion retailer.
Just six months after Dave Lewis, boss of Tesco, warned that UK retailers face a “potentially lethal cocktail”, BHS collapsed into administration, leaving the high street with its biggest failure since the financial crisis. There are clearly unique circumstances surrounding the demise of BHS, but Lewis’s warning about business rates, the national living wage and the apprenticeship levy was, without doubt, prescient. Today, he says, there are “some pretty big macro "challenges” ahead for retailing.
TV chef James Martin recently rustled up a strawberry gateau with Asda boss Andy Clarke at the InterContinental Hotel on Park Lane in London. The mini Bake Off event did not perhaps have the ratings of Martin’s former show Saturday Kitchen, but it cemented his new partnership with Britain’s number three supermarket. The chain is hoping that the hunky Yorkshireman can do for Asda what Jamie Oliver’s cockney charm did for Sainsbury’s. Things have been getting pretty hot in the kitchen of late for Clarke, as a resurgent Tesco and the rapacious growth of discounters Aldi and Lidl pick off Asda’s shoppers.
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