Sunday Retail News Roundup
Tamara Mellon turned Jimmy Choo into a $1bn global powerhouse. Then she set up her own brand to create luxury fast fashion. But after two years of chaos the venture is on its knees and its backers are facing big losses. Mellon sold her stake in Jimmy Choo, the ultra-chic shoe brand she built up with the eponymous designer, for £85m. A clause that meant she could not work for a rival was about to expire. Leveraging her position as a business ambassador for David Cameron’s government, she started sounding out high-profile investors about a new venture. The idea was simple — and at first glance compelling: create a luxury fast-fashion brand, a high-priced version of H&M or Zara. The label, named after her, was launched in America in late 2013 amid a whirlwind of interviews and raunchy photoshoots. But now Mellon’s dreams lie broken like a cheap stiletto. Three weeks ago, her company asked a Delaware court for protection from creditors under Chapter 11 of the US bankruptcy code. The documents reveal that millions of dollars are owed to suppliers, designers, PR agencies and credit card operators. A hearing next month will determine whether plans to restructure the business are viable. Some of the biggest shareholders face enormous write-downs on their investments and are known to be considering legal action. The creditors — among them tiny Italian leather suppliers and a Hong Kong designer — face an anxious Christmas. The descent from aspiring global brand to Chapter 11 has been both rapid and chaotic. In the space of two years, Mellon has been through three chief executives and three finance directors. She now acts as chief executive and chairwoman. Insiders who have worked for Mellon in the company’s plush offices, clad in white leather, above Barneys department store in New York complain of erratic behaviour. It could not be more different from how it all began. In 2012, Mellon was a hot property, the shoe queen who had turned Jimmy Choo into a British luxury powerhouse. She found it easy to attract funding, often charming male investors at dinners of the great and the good. To start her new business, Mellon raised $24m, which was to be paid in two tranches. Among the big hitters who stumped up cash were David Ross, co-founder of Carphone Warehouse, Icap boss Michael Spencer, who invested through his private investment fund, Tory grandee Lord (Jonathan) Marland and Index Ventures, the tech fund best known for backing LoveFilm and Candy Crush maker King Digital.
Joules owner set for £110m float bonanza. A fashion designer who started out selling wellies at country fairs 25 years ago is set for a £110m bonanza after pushing the start button on a stock market float. Tom Joule, 47, is working with investment bank Rothschild to list his family-owned clothes company early next year, insiders said. Joules, known for its bright patterned clothing and wellies, was set up in Leicestershire in the 1980s. Joule bought the business from his father in 1999 and began selling pink wellies at equestrian events before opening his first store in Market Harborough 15 years ago. Since then, the company has opened more than 100 outlets in Britain, mostly in country towns. It also sells its products through Harrods and John Lewis. Management met City institutions last week to gauge the appetite for a float. Sources said the initial meetings valued Joules at more than £140m, potentially making Joule’s stake worth £110m. He and Rothschild declined to comment. Last year, revenue increased by 22% to £117m, earnings before interest and tax grew by 18% to £10.7m, while international sales rose 65%.
One of Britain’s oldest wine merchants has slumped to a big loss as sales of high-priced bordeaux failed to live up to expectations. Berry Bros & Rudd, which started trading in 1698, reported an operating loss of £4.2m for the 12 months to March 31, more than doubling the deficit from the previous year, on sales of £140m. Sales of bordeaux en primeur — fine wine bought by investors before it is bottled — were “much lower than expected”. It also struggled in the Far East. The final dividend was halved to 220p. The wine merchant counts HSBC deputy chairman Sir Simon Robertson and former Allied Domecq and Smiths boss Philip Bowman among its directors. It sold whisky brand Cutty Sark to Edrington in 2010 and has since attempted to reinvent the business with a focus on premium wines and spirits. Berry Bros recently hired Tesco’s former director of wine, spirits and beer as chief executive. Dan Jago left the supermarket giant in the wake of its £263m accounting mis-statement. He was one of a number of senior staff suspended during the scandal, although he was soon reinstated.
KPMG is to beef up its ethical practices, days after the chairman of the Treasury select committee called for an investigation into the accountancy giant. It plans to assess its “overall ethical health” at least once a year. “We must expect our work to face real and searching scrutiny,” said Simon Collins, chairman of KPMG. “That means standing up to the sort of challenge that a patient in the NHS or a soldier on the front line might bring.” KPMG was named in a Bank of England report for its role in auditing failed lender HBOS.
Amazon is planning to start its own airline to shuttle goods between its fast-expanding network of warehouses. The online retail giant has held talks with a number of leasing companies, with a view to building a fleet of 25 aircraft. The aim would be to reduce Amazon’s reliance on traditional air freight carriers. The company is already taking greater control over the shipping and packing of goods, and is using its own trucks, drivers and couriers to deliver to customers’ doors.
One of China’s largest conglomerates has ended its interest in Kleinwort Benson. Fosun, which owns 5% of tour operator Thomas Cook, bid €675m (£492m) for the Anglo-German wealth manager in July. However, French private bank Oddo & Cie made a €760m offer last month. The billionaire who controls Fosun disappeared for several days this month. After he re-emerged, Guo Guangchang said he had been “assisting” the authorities in their anti-corruption drive.
British Airways has admitted it plays the system at Heathrow by “tactically cancelling” flights so it can hang on to lucrative runway slots without having to fly more planes.The carrier, owned by International Airlines Group (IAG), has been gradually strengthening its dominant position at the London hub through deals such as its 2012 takeover of BMI. By next summer it will have almost 53% of the take-off and landing slots at Heathrow, one of the world’s busiest airports. BA recently acquired another 11 pairs of slots following the closure of Virgin Atlantic’s Little Red domestic service and the collapse of Russian carrier Transaero. Most of these slots had been mandated for use on UK routes, as part of a European competition ruling on the BMI takeover. However, BA is now free to use them as it wishes after the failure of the two rival carriers. Under the rules that govern runway slots, airlines are obliged to use them 80% of the time or lose them to another carrier. With slot pairs at Heathrow changing hands for as much as £40m, BA is reluctant to let them go. Willie Walsh, the boss of IAG, recently told analysts: “The [Little Red] slots have reverted to us and we are required to use them or lose them. So we’ve increased some domestic capacity but we are looking at tactical cancellations across the network to operate within the 80: 20 rule so as to minimise the overall increase in capacity.” During the summer BA quietly cancelled a daily round-trip between Heathrow and New York plus a clutch of short-haul routes. In the spring it will launch new routes, mainly to leisure destinations in Europe, and Walsh said that, by using the “same sort of criteria”, it would only slightly increase short-haul capacity. While BA’s tactics are within the rules, they raise questions about whether Heathrow’s runway capacity is being used effectively. This month the government delayed a decision on whether to build a third runway at Heathrow — which Walsh has labelled a “monopoly airport” trying to build a “gold-plated” runway.
The controversial Israeli billionaire who bought London’s Camden Market is backing an audacious plan to take over the football pools. Teddy Sagi, whose recent attempt to buy spread-betting company Plus500 was rebuffed by regulators, is a big investor in Netplay, a London-listed tech outfit that has made a behind-the-scenes offer to buy the pools from current owner Sportech. The two sides are understood to have begun talks already — just a few weeks after Sportech ended another set of takeover discussions with a Canadian rival, Contagious Gaming. Experts said the pools could be worth up to £100m. It is understood that Netplay’s initial offer is some way below this figure. Sportech and Netplay declined to comment. A deal would mean another change in ownership for the football pools, which Sportech brought under one roof by snapping up three rival operators: Littlewoods Gaming in 2000; Zetters in 2002; and Vernons in 2007. The pools were launched in 1923 and at the height of their popularity were played by 10m people a week. The aim is to predict the results of matches in England and Scotland. However, they have fallen into obscurity in recent years as punters have switched to games with higher jackpots, such as the national lottery, and easily accessible football betting games on mobile apps. About 300,000 people still play regularly. According to Sportech’s latest annual report, the pools brought in revenues of £38m last year, generating earnings before interest and tax of £16.6m, down 5% on 2013. The Netplay approach follows the attempt by Contagious Gaming to buy the entire Sportech business. In early November, Sportech said it would focus on developing its existing businesses after breaking off the discussions. Sources said Sportech has received several tentative approaches since then. Its latest suitor, Netplay, counts Sagi as one of its biggest backers. He is best known in Britain for creating betting firm Playtech and then listing it in London. Sagi hit the headlines last month when Playtech’s £460m takeover of Plus500, the financial trading firm, was abandoned. The Financial Conduct Authority, the City watchdog, raised concerns over the deal. Sportech’s largest investors are keen to sell the pools, which they regard as a steady but declining source of income. The pools account for about a third of the Sportech business. A sale would leave Sportech with a gaming software operation, mainly focused on America. Offloading the pools would allow the company to move its stock market quote from London to America’s Nasdaq exchange, insiders said. portech’s share price has slumped in recent years, closing at 57p on Friday after reaching a peak of 107p in March 2013. The company now has a market value of £116.7m. Shares in Netplay closed at 7.38p, giving that company a market value of £21.8m.
Private equity backs Le Bistrot Pierre. The private equity investor behind Crew Clothing has bought a juicy stake in a fast-growing chain of French restaurants. Livingbridge has invested £9.8m in Le Bistrot Pierre, which was founded by two Nottingham schoolfriends in 1994 and now has 14 restaurants. The investment is thought to value the chain at about £20m. Le Bistrot Pierre made a profit of £2m on revenue of £18m in its most recent financial year. It plans to open two restaurants in the next six months — in Birmingham and Swansea — with further “significant expansion” planned after that. Private equity funds have dined out on restaurant deals this year as mid-market chains continue to attract big valuations. Yo! Sushi was sold to Mayfair Equity Partners last month for £81m, and BC Partners bought Côte Restaurants for £250m in the summer. Next on the block, it is expected, will be American burger restaurant Ed’s Easy Diner and upmarket café chain Bill’s. Livingbridge, which earlier this year changed its name from Isis Equity Partners, bought a 25% stake in Crew in 2006 as part of a £7.7m deal.
Ambassador Theatre Group has struck a deal to revamp New York’s historic Hudson Theatre as its transatlantic expansion gathers pace. ATG is Britain’s biggest theatre owner, with top venues including the Lyceum and Apollo in London’s West End. It has agreed a multimillion-pound deal with property owner Millennium & Copthorne Hotels to refurbish and run the Broadway playhouse, which hosted The Tonight Show in the 1950s. Rosemary Squire, ATG’s joint chief executive, said the company would continue expanding overseas in the next few years. “Deals like this almost never come up. We’re working to expand in all areas, particularly in Australia, where we just opened our first theatre [Sydney’s Theatre Royal].” Three months ago ATG acquired ACE Theatrical Group, which owns venues in Texas, New Orleans and New York. Two years ago it bought Foxwoods Theatre, the biggest on Broadway, which has been renamed the Lyric. ATG, backed by the American private equity giant Providence, is also on the lookout for deals in continental Europe.
Tamara Mellon's fashion label has been thrown a $10m lifeline by a US private equity firm just weeks after filing for bankruptcy protection. San Francisco-based NEA, which describes itself as a venture capitalist, will provide $10m of a $14m (£9.4m) cash injection — part of a reorganisation plan put forward under America’s Chapter 11 bankruptcy law. Mellon, who helped to build Jimmy Choo into a global fashion brand before leaving in 2011, will invest $2m herself and other existing and new investors will provide the remaining $2m. Mellon once scorned the private equity community, speaking of “ruthless opportunists who want to cash in, no matter what the cost to the business or the people working in it”.
Mail on Sunday.
Massive investment in new computer systems coupled with disappointing sales in Asia have made losses double at the Queen's wine merchants Berry Bros & Rudd. Simon Berry – chairman of the 310-year-old wine and spirits retailer with a world famous shop in St James's, Central London – admitted the performance for the last financial year had 'fallen well short of expectations', but he insisted that the business remained strong. During the year the company, which has sold wine to Winston Churchill, Lord Byron and Napoleon, invested nearly £5 million in its IT and e-commerce platforms. Sales for the year to March 31, 2015, fell 5 per cent to £142 million, while pre-tax losses jumped from £5.7 million to £11.4 million.
The private equity firms behind one of the biggest pre-credit crunch deals – the merger of Saga and the AA – have shared a £1.7 billion payout, the first since the 2007 deal. Charterhouse, Permira and CVC merged Saga and the AA in a £6.2 billion deal in the summer of 2007 and set up a holding company called Acromas. The massive payout over the last year, revealed in accounts just filed by the group, includes an estimated £110 million which was awarded to staff of the two firms. Disposals by Acromas have since led to Saga and the AA once again becoming two separate companies. The development is seen as confirmation that combining the two had added little value. Acromas listed the AA in June of last year, selling its entire stake. It listed Saga a month earlier and it still retains a 32 per cent holding. There are likely to be further payouts as Acromas sells more Saga shares in a move expected to net hundreds of millions. The private equity firms had already made a killing in connection with the 2007 deal. After investing £1 billion the three groups took out significant loans and then paid themselves £2 billion in dividends. Saga staff also did remarkably well, turning each £20 stake bought in 2004 into £10,500 – a quarter of which they had to reinvest in Acromas. Shares in AA ended Friday at 293p valuing the whole business at £1.79 billion, while Saga shares stand at 202p valuing it at £2.25 billion. Saga’s float was criticised by some after the shares fell following its listing at 185p per share. They dropped below 150p at the beginning of this year. All parties declined to comment.
Official figures will confirm this week that the UK economy grew by 0.5 per cent in the third quarter of 2015 as hopes rise that there has been sharp rise in the last quarter. Strong retail sales numbers last week suggested a pick-up from the third quarter, meaning growth in 2015 is likely to have been about 2.4 per cent overall. The first official estimate of growth in the fourth quarter will come at the end of January. Wednesday’s third-quarter figures are a second estimate. Howard Archer, chief UK economist at consultancy IHS Global Insight, said: ‘We had pencilled in GDP growth of 0.6 per cent quarter-on-quarter in the fourth quarter, but the strength of retail sales in November suggests that it could come in higher.’ The economy’s progress has been hit recently by a slowdown in global growth and in particular by poor trade figures. Official numbers will this week say that the current account deficit, a measure of the UK’s international trade and investments, stood at 5 per cent of GDP in the third quarter – a level considered unsustainably high.
Yes, they really are taking over the road – with 368,000 new vehicles moving millions of parcels in an online shopping explosion. Falling petrol prices and a surge in demand for home delivery have boosted the fortunes of ‘white van man’, as a huge rise in the number of new delivery businesses drives a surge in van sales. The number of delivery firms has increased by more than a third in the past 12 months. Experts said that many have just one or two vans, and are set up to cater for the ‘final mile’ of delivery. ‘The call for van drivers has gone though the roof,’ said a spokeswoman for the Freight Transport Association. ‘The demand for online shopping has exploded in the past few years, and the retail and logistics industries need people to deliver all the way to the front door. ‘We always thought it was going to be big, but no one could have foreseen how phenomenal this has been. Britain is leading the world in the demand for online shopping.’ According to figures from company health check service Creditsafe the number of freight transport firms registered at Companies House in the 12 months to the end of November has increased by 7,265 to 28,510 on the year before, boosted by both large and small firms. Fuel accounts for a third of the cost of running a distribution firm, and with petrol and diesel widely available at around £1 a litre new companies have been able to establish themselves more easily. Fewer than 1 per cent collapsed during the period, according to Creditsafe. Nick Breton, head of the business arm of insurer Direct Line, said: ‘Cheaper fuel prices and the continued growth of small firms has led to a resurgence in confidence for van drivers this year.’ He described the white van driver as ‘a British institution and as iconic as red phone boxes and Routemaster buses’. Evidence from the Society of Motor Manufacturers & Traders suggests that there are thousands more van drivers setting up as ‘sole traders’, as well those employed by larger firms. In the 12 months to the end of November 2015 the number of new registrations was 368,000 – a rise of 16.4 per cent on the 316,000 vans registered in the same period the year before. Two years ago the figure was just 266,000 – meaning annual registrations have increased by more than 100,000 since 2013. A spokesman for the SMMT said that there were now 3.8 million vans operating on Britain’s roads as consumers grow to love shopping from the comfort of their sofas. The surge is partly due to the release of pent-up demand as Britain gradually moves out of the challenging economic period brought about by the banking crisis of 2008. Access to leasing and financing deals has also improved over the past year, with cheaper interest rates available to borrowers. But the internet has also increased the ease with which smaller operators can pitch for work through sites such as delivery auction site Anyvan. The site allows delivery firms to bid for drops across the country. Anyvan said that deliveries organised via its website had increased 76 per cent in a year, boosted by consumers buying larger household items from ‘collection only’ sellers on websites such as eBay and Gumtree, many of whom are individuals selling second-hand goods. With such sales, the buyer organises the delivery themselves. Anyvan said prices had dropped 4.5 per cent over the year as van operators bid for jobs that allowed them to deliver to several addresses in one run, while also benefiting from the fall in petrol prices. Andy Janusaitis of Smartmovers, which operates from Croydon, South London, said he had increased his number of vans from three a couple of years ago to nine, and planned to expand his operation further next year. He said: ‘Nine out of ten jobs we do now are for items people have bought through eBay or another internet site.’ He added that by grouping jobs in certain areas on a single day he was able to offer lower prices and be more competitive. He explained: ‘If I have a job in Reading, I look for other jobs in the same area, such as moving a piano or helping someone move some furniture they want to send to someone else.’ Research by accountant Pricewaterhouse Coopers suggests that by 2018 a quarter of all non-grocery shopping, such as clothing, furniture and electricals, will be online. Riverford Organics, based in Buckfastleigh, Devon, said the number of deliveries of its weekly vegetable boxes had risen by a fifth in the past three years. It currently operates a fleet of 250 vans.
Last week John Lewis managing director Andy Street said that he expected online purchases to overtake in-store sales by 2019.
Last-minute Christmas shoppers flood high streets as big stores start their sales a week early. Bargain hunters hit stores across Britain on what is called 'Panic Saturday'. Stores offer discounts of up to 80% on last Saturday before Christmas. Move comes after low Black Friday sales left retailers with an 'uphill battle'. Argos, John Lewis, Boots, Toys R Us, M&S and Mothercare to offer sales. Panic-buyers have hit the shops on the busiest day in the Christmas shopping calendar as high street shops slash prices. Retailers including River Island, H&M, Sports Direct, Argos and Sainsbury's are already offering huge seasonal discounts - with many more sales due to kick off early instead of after Christmas. Discounts are expected to average 45% on what some see as the most stressful shopping day of the year. Around 12.6 million Britons are expected to hit the sales in search of cut-price buys, according to the Centre for Retail Research. And some retailers are expected to slash prices by up to 80 per cent across a range of goods including clothing, electronics and jewellery. It is the fifth year in a row for record discounting with retailers cashing in on a pre-Christmas surge – in a bid to make up for lost profits over the Black Friday and Cyber Monday phenomenons. The discounts are the deepest since 2008 after the mild autumn and unexpectedly low Black Friday sales on the high street left retailers facing an 'uphill battle' to shift stock, Deloitte said. The figures will be good news for the 12.6 million Britons expected to hit the high street on so-called 'Panic Saturday' - although the figure is slightly down on the 13million who turned out on the same day last year, according to VoucherCodes.co.uk and the Centre for Retail Research. However, while spending today is expected to be slightly lower - £1.1billion in stores compared with £1.2billion last year - the day is predicted to kick off a £6billion six-day spending spree in the run-up to Christmas - 23 per cent per cent more than the same period last year when Christmas Day fell on the Thursday. Five clear days between Saturday and Christmas Day means shoppers are also expected to rely on deliveries of online purchases. Jason Gordon, consumer business partner at Deloitte, said: 'Compared to 2014, there is already a noticeable increase in both the volume and value of discounts in the run-up to Christmas this year. 'Whilst this is good news for consumers looking to grab a bargain, it is a clear sign that retailers are being faced with what is now an annual uphill battle.' Deloitte analysed the prices of more than 1.9 million products and found that the 'very wide spread' of discounts range between 5.6 per cent and 90.9 per cent. It believes the discounts will grow in number and size and average more than 53 per cent after Christmas. Mr Gordon said: 'Christmas falls on a Friday this year, and, given the disappointing sales so far, we would expect the majority of retailers to launch their final big pre-Christmas discounts on the Saturday before Christmas. 'Limited Sunday trading hours on the Boxing Day weekend may also lead to slightly deeper-than-usual discounts in the post-Christmas sales window.' Claire Davenport, managing director for VoucherCodes, said: 'Although we're expecting slightly fewer shoppers on the streets this Saturday, 12.6 million Brits is still a significant turnout and kicks off almost a full week of last minute spending. 'Retailers need to make sure they're prepared in order to capitalise on this pre-Christmas boost and offer customers the most seamless experience possible during this busy period. 'Big brands seem to be kicking off Christmas earlier every year with festive adverts and discount shopping days fuelling spending, but that doesn't stop Brits finishing their shopping at the last possible minute with billions to be spent on and offline in the final week before the big day.' The amount of retail space under construction in London will increase by almost eight million square feet, the equivalent of London's flagship retail streets of Bond Street, Oxford Street and Regent Street combined, over the next five years, according to CBRE, the commercial property and real estate services advisor. Advance figures from CBRE's latest IN_retail report reveal planning permission for a total of almost eight million square feet of new shopping space has been granted across London in zones 1 and 2. Almost three million square feet will be within three retail-only developments at Croydon, Westfield London and Brent Cross. Hugh Radford, Chairman Central London Retail at CBRE said: 'London will see 100,000 new residents arriving every year with another 1 million forecast to want to live in the capital by 2025. These new Londoners will need places to eat and places to shop. 'Existing prime retail locations are bursting at the seams which means that confidence in the sector and its future potential has accelerated investment.
The Fold, the upmarket women’s label worn by the Duchess of Cornwall and Samantha Cameron, has sold a minority stake to private equity, which will help to fuel overseas expansion, and fund more showrooms in the UK. The company, which was founded in 2012 by former City executive Polly McMaster, makes clothing for high-flying women, and claims to offer “the feminine alternative to the Savile Row suit”. Active Private Equity has invested in the region of £1m - £2m in the company and said that it expects the chain to grow at a similar pace to other companies it owns. Richard Sims, who was a founder investor at fashion brand Mint Velvet, has also invested in the business. Active backed healthy food chain Leon when it was a single restaurant in London’s Carnaby Street, and has invested in Rapha, the cycling clothing company, burger chain Honest Burger, and members club Soho House. The Fold, which uses its customers as models on the website, has established a loyal fan base in the UK but has ambitions to become a global brand. “We’ve seen great traction and we’re growing 100pc year-on-year,” said Ms McMaster, who has a Cambridge PhD in molecular biology and holds an MBA from London Business School. “We are now selling 10,000 garments a year and customers are buying several times a season, building their whole wardrobe through The Fold. "Our customers travel a lot and work in different cities so it makes sense to grow the business beyond the UK.” Dresses start at around £250 and are exclusively designed for The Fold and made in London. It currently operates a single showroom in London’s Clerkenwell, where it also hosts a series of events to encourage customers to network, and invites speakers such as Barbara Cassani, founder of the Go Fly airline, and Karen Mattison MBE, who launched Timewise Jobs to share career advice. “We would like to open more showrooms in the UK,” Ms McMaster said. As part of the deal, Active co-founder Nick Evans will join The Fold’s board. “This is currently a fragmented market that is not well served,” he said. “We’ve been extremely impressed by Polly’s sharp focus on her customer and community, and The Fold’s rapid progress to date.” Mr Evans said that the brand’s cult following would allow The Fold to launch other products, besides womenswear, in future. “It’s too early to say what it will sell,” he said. “The vetrical in the UK is more than larger enough to generate a significant business, and the international market is even bigger.”
Wearable and wireless technology the big winners as desperate shoppers scramble for last-minute Christmas deals. Millions of shoppers hit the high street yesterday on so-called ‘Panic Saturday’ with smartwatches and ‘fitness trackers’ among the top purchases. Stores up and down the country slashed prices by up to 50 per cent to entice shoppers through the doors after a slow start to the Christmas shopping campaign. Analysts estimated that 12 million people descended on shopping centres yesterday with many more securing gifts online. • Boxing Day sales 2015: what are the best deals?. Richard Hyman, an independent retail analyst, said: “Most of the sales we’re seeing aren’t planned and aren’t strategic — they are tactical responses to competition that only the really strong players with strong brands and price relationships with their customers can avoid.” John Lewis reported a rush to secure wearable tech and wi-fi controlled smart devices. Toys and audio equipment were also reported to be flying off the shelves, with beauty products expected to take a greater share of sales next week as shoppers hunt for last minute gifts. Overall, some £6billion was expected to be spent in the period up to December 25th, almost 25pc more than over the equivalent period last year, according to the Centre for Retail Research. At John Lewis choice savings include up to half price off brands including Whistles, Coast, LK Bennett, Dune, Phase Eight, Karen Millen, Jaeger, French Connection and All Saints. Miss Selfridge was giving shoppers online and in store a 50pc discount on many of its wares, while there are 40pc sales of Cheap Monday jeans and dresses, Nike, New Balance and Adidas training shoes and Noisy dresses at Urban Outfitters until Tuesday. Christmas sales: the best five buys from Net-a-Porter. The Body Shop was advertising 40pc off selected items plus a free gift on purchases over £10.
Bookseller Waterstones is selling half price titles including Jamie Oliver’s Everyday Super Food (£13.00 from £26.00 hardback) and Simply Nigella (Hardback) also £13.00 from £26.00. A hardback copy of Bill Bryson’s The Road to Little Dribbling is available for £7.00 less than its £20.00 cover price, while Mavis Doris Hay’s The Santa Klaus Murder can be bought in paperback for 25pc less than the normal £8.99. Customers at PC World can take home a 13-inch Apple MacBook Pro for £799 - £100 less than their standard price – while Asus X555LA 15.6” laptops are available for just £379 – a saving of more than £220. Habitat was offering up to 30pc of all sofas and armchairs, while competitor Heals is giving 30pc off selected rugs and sofas, up to 40pc off floor lamps, and 15pc off designer Ercol furniture.Supermarket Aldi has also cut the cost of many of its festive treats, including its Specially Selected Champagne Christmas Pudding (was £3.99, now £2.99 for 454g), its Scottish Shortbread Selection (was £3.49 now £2.59 for 500g), and Specially Selected Chocolate Brazil Nuts (£2.49 now £1.85 for 150g). A mild autumn and unexpectedly low Black Friday sales have left businesses desperate to shift a build-up of stock, industry experts said. Best Christmas cashback deals for last-minute shopping
Richard Perks, Director of Research at business intelligence analysts Mintel, said: “There will be some for whom the Christmas period is make or break, but there will be some who do phenomenally well”. Jason Gordon, consumer business partner at Deloitte, said: "Compared to 2014, there is already a noticeable increase in both the volume and value of discounts in the run-up to Christmas this year. "Whilst this is good news for consumers looking to grab a bargain, it is a clear sign that retailers are being faced with what is now an annual uphill battle."
Oxford Street has seemed busy this year, but shopper numbers are down as more people buy online; a 'tax on property’ is an outdated model, says the John Lewis chief. The boss of John Lewis has argued against a transaction tax as a viable solution to the burden caused by the business rates system. Andy Street, managing director of the department store chain, is a vocal critic of the system, which brought in £23bn this year and is set to rise by 5pc next year. “Business rates are currently a tax on property, and property is the way retailers have made money historically and what we are looking for is a reflection of the future,” Mr Street said. However, he said that he didn’t “think a transaction tax is the right answer” as shoppers increasingly used a mix of online and bricks-and-mortar stores. He said the plans to revamp the business rates system has to “reflect how businesses work now” and had to go further than the devolution proposals. The company, whose website crashed for 15 minutes on Black Friday, is investing half a billion pounds in its online operations. Mr Street last month joined the ranks of business leaders recruited by Whitehall, to become a non-executive director of the Department for Communities and Local Government. The appointment comes as the department has been handed even greater powers because local councils will keep 100pc of business rates and city mayors will be handed the power to raise or reduce rates. Retailers are holding their breath for a last-minute surge in Christmas shopping amid concerns that Black Friday stole spending away from the traditional peak. Shoppers are expected to leave their purchases even later than normal with Christmas Day falling later in the week this year. Wednesday is forecast to be the busiest day this week, with £1.3bn spent on the high street, according to Visa Europe.
Milk Tray experiments with vegetable fillings. Food scientists at Milk Tray think kale, wasabi and beetroot fillings could be popular flavours in the future.Milk Tray is celebrating its 100th birthday this year and is looking at how it can remain relevant for the next hundred. The brand is now part of American snacks giant Mondelez, which in its previous incarnation, Kraft, bought Cadbury for £11.5bn in 2010. Milk Tray is still popular among older people but needs to appeal to young consumers. It’s a competitive market. More than a quarter of 16-24-year-olds ate chocolate that had been bought for them as a present in the three months to February, marginally lower than the number of people aged over 55, according to research firm Mintel. On a recent visit to Mondelez’s chocolate innovation lab, eight trays of chocolate assortments were lined up on a counter top. Not only were the development team behind Milk Tray presenting the experimental flavours, they had recreated some favourites of the past – including the lime cordial barrel, a peach cream swirl, popular in the 1920s, and a rose cream dome from the 1930s.The idea was to understand how chocolate tastes have developed over time, and to get a flavour of tastes that could be popular in the future. Despite Shepherd’s enthusiasm, the new flavours may not sound appealing to most. Certainly the idea of a dome-shaped chocolate shell filled with bits of chopped wasabi peas and wasabi-flavoured cream taking off sounds remote. It had a sharp, savoury taste, enough to make many wince. The beetroot jelly barrels also sound unappealing. Beetroot is not a vegetable to everyone’s tastes and, even surrounded by chocolate, it’s not a tempting prospect. But it had a fairly pleasant taste, and is surprisingly sweet – like a strong, fruity jam. The kale-inspired chocolate dome was equally offputting. It had an overwhelmingly bitter taste with an earthy flavour that can’t be disguised by the sweet chocolate casing. Shepherd explained this is a bit of gamble. It’s hard to imagine any of these will cause family chocolate box squabbles. Fortunately Shepherd agrees. The fillings are only experimental and are unlikely to make their way into boxes. “What we’re doing is similar to the fashion industry. The clothes you see on the catwalk never appear as they are on the shelves. Instead you see things inspired by it a little bit down the line,” says Shepherd, who trained as a food scientist at Reading University and joined Cadbury 17 years ago.These experiments follow a number of similar changes across various Mondelez brands. The controversial American takeover of Britain’s best-loved chocolate brand five years ago left a bitter taste. Mondelez is still trying to win over customers with treats including its Marvellous Creations lines – chocolate bars with fillings such as jelly popping candy and banana caramel crisp. It is often the menu tweaks that incense British consumers. Customers complained when Mondelez rounded the corners on the chunks of Dairy Milk, shrinking the new bars by four grams but shaving nothing off the price.
There was further outrage after it was recently revealed that the Creme Egg chocolate shell, which used to be made from Dairy Milk, had been replaced with the more basic Cadbury chocolate, typically found in Crunchies and Starbars. Despite being no stranger to consumer outrage, Mondelez is still the dominant player in UK chocolate confectionery, with a 29pc share of the market, equalling annual sales of £1.8bn. Its nearest rivals are Mars and Nestlé, which have shares of 21pc and 15pc respectively, according to analysts at research group Euromonitor. Dairy Milk – which includes chocolate bars such as Fruit and Nut, as well as bags including Milk Buttons – is by far the company’s biggest cash cow, with sales of £500m last year. Milk Tray is worth around £35m, says Mondelez, adding that sales in the past two months are up 10pc on last year.hen it launched in 1915, Milk Tray was the first box of chocolates affordable enough to be an everyday treat. The chocolates were sold in 5.5lb boxes, which would be put out in trays to sell to customers and is where the name originated from. Plain Tray, a more basic version, was also launched but was never as popular and was discontinued in the 1920s. Aside from scores of different box designs, not much has changed when it comes to Milk Tray’s offering. In the 1940s a Milk Tray bar was launched, with each block representing a different flavour, but this line was stopped in the 1980s. Shepherd now hints he wants to bring the bar back. Consumers want more variety in a chocolate bar, he says, and there may be demand for it again in today’s market. “I’d love to bring back the variety bar. It was a great product. It’s a complex line that needs eight different recipes going in, but it’s possible. I’m not promising anything though.”
Two weeks ago the Carlisle Tesco was under water, supermarket, petrol station, car park and all. Staff had been evacuated after the nearby river burst its banks, and the flood waters eventually breached the doors of the store and rose to waist height in all the aisles. However, in the grocery industry’s equivalent of a Christmas miracle, the store has been resurrected. A team of almost 100 people has built a temporary 10,000 sq ft shop in the flooded supermarket’s car park. The temporary store now stands as a monument to the town’s community spirit. But it is also a reminder of how crucial the Christmas period is for grocery retailers. The days leading up to 25 December can make or break a grocery retailer’s year. With households eagerly stocking up on turkey, trimmings, party food and booze, it is the busiest period of the year by far. Analysts at Visa expect trading to reach an annual peak between 1pm and 2pm on 23 December. The battle among supermarkets for sales is fierce. Some shopping patterns are set in stone – many households will turn to Marks & Spencer for their Christmas dinner, with the company accounting for one in four turkeys eaten on Christmas Day. But the retailers still spend millions on Christmas advertising and money-off vouchers in the hope of enticing consumers into their stores. Competition this year will be particularly fierce in the face of rivalry from discounters Aldi and Lidl, from online stores and from ever more popular convenience stores. And price deflation also means that retailers cannot count on price rises and inflation to flatter their figures. “I think this is going to be the toughest Christmas we have ever seen – after the toughest year we have seen,” says Richard Hyman, an independent retail analyst. “The discount players have finally hit critical mass: their buying power on a much narrower range of products often exceeds that of the majors. We are seeing that in the way Aldi and Lidl are able to grow their market share.” He also warned that the “big four” supermarkets – Tesco, Asda, Sainsbury’s and Morrisons – are going into Christmas week in a precarious state: “The majors have shot themselves in the foot. They have fragmented the buying patterns of their customers [by moving into online and convenience stores]. The economics of their business have changed fundamentally. If you look at the collective market share of those companies, it has gone down by around £2bn year on year, but they haven’t edited their space, not really. Tesco has shut some stores and curtailed development slightly, but to all intents and purposes they have got the same amount of retail space, if not more, and that has to be spread over diminishing sales. “Next year will be tougher still, because there are cost headwinds in terms of the national living wage, and you can be certain there will be more capacity than there is now.” With the industry under unprecedented pressure, the stakes are high, and the divide between winners and losers could be stark. Britain’s biggest retailer may lose its position at the top of the tree if recent trends continue. Tesco has endured a miserable year, with its share price down by 42% since mid-April. This means Tesco’s market value now stands at £11.4bn, just ahead of clothing chain Next, which is worth £11.2bn. Next could well overtake Tesco – despite the fact that it generates just £4bn in annual sales compared with £70bn for the supermarket chain. The reason for the share price fall is that the City is concerned about Tesco’s performance and the lack of progress being made by Dave Lewis, who became chief executive last September, in improving its stores. The latest market share figures show that Tesco sales fell by 3.4% in the past 12 weeks, the joint worst performance in the industry, alongside Asda. Everything Lewis tries seems to be overshadowed by Tesco’s rivals – the company has cut prices, but the discounters have cut theirs too; Lewis launched a high-profile Christmas TV advertising campaign featuring well-known actors, but Sainsbury’s stole the show with Mog the cat. Tesco is struggling to attract shoppers, but it is also hamstrung by the fact that it has too many stores for this new age of retailing. Last month Lewis revealed a remarkable statistic: between 2007 and 2014 Tesco opened 35 million square feet of shop space – that’s twice the size of all Asda’s outlets – yet lost market share. That says everything about the scale of the challenge facing Tesco’s boss. The company’s Christmas sales figures will also be dragged down by the bounce it enjoyed last year on the back of Lewis taking over. The new Tesco boss boosted the morale of staff and issued £5-off vouchers for customers spending £40. However, Lewis has already warned that that won’t be repeated this year and had admitted that trading will be tough. Asda chief executive Andy Clarke may have bought himself breathing space by ducking out of Black Friday. Asda chief executive Andy Clarke may have bought himself breathing space by ducking out of Black Friday. On the basis of sales figures, Asda is also having a terrible time. The retailer reported a 4.5% fall in sales in established stores in the third quarter of the year. Asda is unlikely to be able to reverse that downward trend in time for Christmas. However, Asda, or at least its American bosses at Walmart, are focusing on protecting profits. This has meant that Asda has been able to maintain them despite the fall in sales, by not issuing money-off vouchers or running extra promotions for shoppers. This clearest demonstration of this strategy came when Asda pulled out of Black Friday and pledged to invest in cutting the price of everyday groceries instead. That decision seems to have boosted the confidence of boss Andy Clarke, whose future at Asda has been the subject of speculation, and could help its sales recover slightly for Christmas. Sainsbury’s is well-placed to emerge as the leader among the “big four” supermarkets at Christmas. In fact, it would be a surprise if it did not report the strongest performance when the companies all reveal their trading results in January. Under Mike Coupe, who replaced Justin King as boss last year, the company has focused on the basics of retailing, such as product availability and emphasising the quality of its food compared with that of rivals. This positioning of the brand as an upmarket alternative to Tesco pays off for Sainsbury’s during the holiday season as shoppers turn to its stores when looking for party food and fresh meat. This year, Sainsbury’s has a couple of other factors in its favour. Its Mog the cat Christmas advert has proved extraordinarily popular, winning more views on YouTube than the John Lewis Christmas advert. The Sainsbury’s advert has been watched more than 25 million times so far. Sainsbury’s Christmas advert featuring Mog the cat has been the big hit of the 2015 season. The other factor in Sainsbury’s favour is that its performance last Christmas was dragged down by the controversial decision, just weeks before Christmas, to halve the number of points it awarded to holders of its Nectar loyalty card. As a result, the comparative for the company’s sales this year will be easier than it might have been. Morrisons Bradford-based supermarket chain is the unknown quantity this Christmas. David Potts is leading the retailer into the festive period for the first time and is working hard, through price cuts and promotions, to get Morrisons back on track. However, the latest market share figures shows the company’s sales are still falling after three years of decline. This is partly because Morrisons has sold off its convenience store chain, M Local, but the retailer is also struggling to find its place in a crowded market. Potts and chairman Andy Higginson are highly regarded for their work in senior roles at Tesco, but Morrisons is under pressure in its northern heartland from Aldi and Lidl. Aldi and Lidl’s relentless growth continues apace. The only difference this year is that Lidl is now growing faster than Aldi. With the German chains looking to double in size over the next decade while the “big four” close stores and scrap planned new developments, they will continue to grab market share. The biggest threat to their expansion is arguably themselves. Last year there were murmurings of discontent among some Aldi and Lidl shoppers because the shops were so busy at Christmas. This could play into the hands of the “big four” if consumers decide they would rather avoid the queues and shop at a larger supermarket instead. However, for Aldi and Lidl, this is a nice problem to have. Clive Black, analyst at Shore Capital, said Aldi and Lidl were enjoying a “second wind” of growth in the UK. “With the greater focus these limited-assortment discounters are putting on new store development in London and the south and east of England,” he said, “Sainsbury’s in particular – and Tesco – may need to spend a little more time reflecting on the competitive dynamics of the segment beyond its own northern trial with Netto.” Waitrose: largely insulated from the bitter battle going on around it. Marks & Spencer and Waitrose just as they have all year, the high-end players in the grocery market will join the price-cutters in emerging as the winners of the Christmas period. “I don’t see things changing much,” Black says. “The bigger winners look like being the discounters and premium retailers, M&S food is flying.” There are plenty of British shoppers who, this Christmas, will buy bits and bobs from the discounters and then head to M&S or Waitrose for their turkey and fresh food. This combination is putting the “big four” under enormous strain, and will mean that while Tesco, Asda, Sainsbury’s and Morrisons are fighting their own battle, the performance of Marks & Spencer, Waitrose, Aldi and Lidl will be in another league. M&S and Waitrose have thrived by developing their own-brand products and introducing innovative new lines. This means that they are shielded from the price war that is taking place on branded goods. However, the two companies may see their growth slow compared with the previous year because of fierce competition in the market and the deflation caused by falling commodity prices. There are also concerns that Waitrose may have overstretched itself by opening too many new stores. However, the retailer, which is owned by the John Lewis Partnership, is unlikely to be the Christmas turkey this year. Tesco could turn out to be the biggest loser, despite its efforts in Carlisle.
The Swiss city of Zurich has announced it will not use the 62 Ikea refugee shelters it has purchased to house asylum-seekers after a test showed they constituted a fire hazard. Amid growing numbers of refugees and other migrants arriving in Switzerland, Zurich city councillor Raphael Golta on Friday morning unveiled a large hall filled with dozens of Ikea ready-to-assemble refugee shelters. The city had purchased the shelters with the aim of using them to house 250 people by early January. But just a few hours later, the city was forced to announce that a fire safety test had revealed the shelters do not live up to Swiss fire protection requirements. The test showed the temporary shelters “are easily combustible,” the city of Zurich said in a statement. Golta voiced surprise at the verdict, but insisted the city had done its best under the circumstances. “We have to host 40% more asylum seekers in the space of two months, so we had to move quickly to choose the best solution available,” he told the RTS public broadcaster. The shelters, developed in cooperation between Swedish furniture giant Ikea and the UN refugee agency, have already reportedly been deployed by the thousand in refugee camps and in places like Greece that are facing a heavy influx of migrants. The city of Zurich said it had relied on safety information from the UNHCR and a Swedish study. But regional authorities had requested a new test after learning that a German report this week raised concerns about the accuracy of the Swedish study.
Chestnuts roasting on an open fire, Jack Frost nipping at your nose; millions of fevered shoppers battling for bargain buys on overcrowded high streets across the country on “Panic Saturday” – Christmas is a magical time. The busiest day in the Christmas shopping calendar has landed as shops kick off their January sales early in an effort to lure last-minute bargain hunters. Around 12.6 million Britons are expected to hit the sales in search of seasonal discounts, according to the Centre for Retail Research, while a mild autumn and unexpectedly low Black Friday sales have left businesses desperate to shift a buildup of stock. More mild weather forecast for final shopping weekend before Christmas. Retailers including River Island, H&M, Sports Direct, Argos and Sainsbury’s are already slashing prices – with many more sales due to kick off against tradition before Christmas. Those still searching for the perfect Christmas gift can expect discounts of 45% on average, according to accountancy firm Deloitte. As Christmas falls on a Friday this year, “Panic Saturday” is expected to kick off a £6bn six-day spending spree - 23% more than the same period last year when Christmas Day fell on Thursday. Jason Gordon, consumer business partner at Deloitte, said: “Compared to 2014, there is already a noticeable increase in both the volume and value of discounts in the run-up to Christmas this year. “Whilst this is good news for consumers looking to grab a bargain, it is a clear sign that retailers are being faced with what is now an annual uphill battle.” Credit and debit card giant Visa predicts that shoppers will spend £1.14bn on Visa cards in stores on Saturday, which is up by 3% on last year.
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