Sunday Retail News Roundup
An Indian billionaire and two of the City’s most powerful institutions can be revealed as the driving forces behind a growing shareholder rebellion at Debenhams. The struggling department store’s three biggest investors — Schroders, Milestone Resources and Old Mutual — are pushing for a board shake-up with help from the broker Cenkos. Milestone is a holding company for Mukesh “Micky” Jagtiani, an Indian-born former London taxi driver who runs a sprawling retail empire from Dubai.Together the three investors own about 25% of Debenhams. Cenkos had approached some of the company’s other big shareholders with a plan for a boardroom coup.The broker is understood to be acting on behalf of the three big backers, which are said to have become increasingly frustrated with Michael Sharp, the chief executive, and Nigel Northridge, the chairman. This weekend there were signs that Northridge was preparing to replace Sharp. He is understood to have interviewed at least one candidate for the chief executive’s job, and sources said he could make a change in the new year.
Tesco is close to ditching the sale of Dunnhumby, the company behind the Clubcard, but is ready to go ahead with the £3bn sale of its central and east European operations.Senior City sources said yesterday that the advertising agency WPP, the last serious bidder for Dunnhumby, was struggling to agree a price.The sale has stuttered since it was launched earlier in the year. Buyers have raised concerns about Tesco’s contract with Dunnhumby, which is up for review in 2020.Suitors have also expressed doubts about the company’s ability to grow in America.The US supermarket chain Kroger bought most of its American operation in April. Bankers had estimated Dunnhumby’s value at more than £2bn but the business is now said to be worth as little as £500m-£700m.A handful of private equity suitors, including Silver Lake and Hellman & Friedman, have already pulled out.Meanwhile, sources said Tesco had held preliminary talks with private equity houses about the sale of its operations in Poland, Hungary, the Czech Republic and Slovakia.Buyout firms have already begun work on financing possible bids for parts or all of Tesco’s operation in the region.
The families behind Butlins holiday parks and Warner Leisure Hotels have paid themselves more than £80m in dividends since the start of last year.Bourne Leisure investors received £48.2m in 2014 and a further £32.9m this year, according to accounts filed with Companies House.A further payout is expected at the end of 2015. Three publicity-shy families — the Cooks, Allens and Harrises — own most of the shares. They could not be reached for comment.The bumper returns came after a strong year for Bourne, whose history can be traced back to 1936 when the first Butlins resort opened near Skegness.Pre-tax profits rose 26% to £133.8m, which Bourne attributed to “guest loyalty and repeat business”. An £11.1m credit from Her Majesty’s Revenue & Customs for overpaid VAT also helped to boost the accounts.
An antiques dealer that traded the personal effects of Catherine the Great has added to a flurry of trophy London property deals by putting its Mayfair store up for sale.SJ Phillips, which specialises in jewellery and gold snuff boxes, is preparing to leave the street after 146 years. The family-owned business has hired Levy Real Estate to market the freehold of 139 New Bond Street for more than £70m.SJ Phillips plans to lease it back until early 2017, after which it will move.It is the latest multimillion-pound sale on Bond Street. NFU Mutual, the insurer, is preparing to market the building that houses the fashion label Alexander McQueen for £160m. The Mayfair street — one of the best-known and most expensive shopping strips in the world — has seen rents and prices soar in recent years as fashion and watch retailers have scrambled to bag prime spots, often choosing to buy freeholds to protect themselves from rent rises.
Mail on Sunday.
The phrase ‘too big to fail’ came to prominence in the banking crisis to describe a financial group whose economic significance was so great that no government could allow it to collapse no matter how richly it deserved to fail.
It may be about to come to prominence again, but this time about the car industry. The scale of deception by Volkswagen has stunned the world.Its mea culpa in America has been unqualified. How serious the issue is in Britain and Europe remains to be seen.But the signs are not good.Switzerland has banned sales of VWs – other nations may follow, in which case the implications for VW are horrifying.But the significance of this extends beyond the company and its shareholders. VW is one of Europe’s biggest companies. Its failure would be a severe blow to the German economy and to that of Europe.If it turns out that gaming the emissions tests is widespread in the car industry, as many now suspect, can Europe afford to punish its car makers as severely as they may deserve?.Could we in Britain raise taxes even higher on polluting vehicles or fuels without damaging the wider economy?.
Harrods managing director Michael Ward has slammed a series of Government policies which he says are closing the door on millionaire visitors – and scaring off the wealthy.A hike in stamp duty on £2 million houses, tax sanctions on non-doms and a stringent Chinese visa application process risk London losing its status as second home for the global rich, he says.'London is doing OK, but I wouldn't say it's doing well. There are certain worrying developments,' says the 59 year-old.His concerns – which come in the week that Chancellor George Osborne promised to be China's 'best partner in the West' during a high profile trade visit – were heightened by the Conservatives' Budget in July.
Home shopping now accounts for £1 of every £4 spent by Britons.Yet the convenience of shopping online comes with catches and costs.Supermarkets require online shoppers to spend a minimum amount before they can place an order.Earlier this year both Asda and Tesco upped their minimum spend from £25 to £40, in line with Morrisons and Sainsbury’s. It now costs between £1 and £6 to have shopping delivered to your home from any of these four supermarkets, depending on the time of delivery.Morrisons only launched deliveries in July last year and still does not offer a nationwide service.You can check if a supermarket delivers to your address by entering your postcode before filling your online trolley.Shoppers have to spend at least £60 to order online from Waitrose but then delivery is free. Ocado offers free delivery on Wednesdays on orders of £75 or more. On other days, shoppers have to spend at least £40 and delivery costs are capped at £5.99.Savings can be made by booking a delivery when a van is already in the area. The peak slots – Friday, Saturday morning and weekday evenings – tend to cost the most.
Morrisons is pulling out of a string of developments as it shrinks its estate to focus on core supermarkets. Embattled supermarket retailer Wm Morrison is in a legal row with a clutch of property developers over a string of supermarket sites that it has pulled out of building. Sources say that there are currently a number of ongoing court proceedings that could decide multi-million pound payouts in favour of a number of developers. One such developer, Wessex Investors, said that it is waiting for a ruling from London’s commercial court to decide whether Morrisons could walk away from its contractual commitment on a development in Launceston, east Cornwall.
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