The Very Group to start paying dividends after 4-year pause
The Very Group is reportedly going to resume dividend payments to its billionaire owners after it was paused for four years. According to The Financial Times, the online retailer is set to pay a dividend of “up to £25 million” to parent company VGL Fino. Directors of VGL include Aidan and Howard Barclay, the sons of the late David Barclay. VGL is controlled by the family settlements of David and his twin brother Frederick. The dividend payment, details of which were set out in an offer document for a £575 million bond issue, is set to be made during the first quarter of The Very Group’s current financial year, which started last month. It would mark the first dividend The Very Group has paid since 2017, when it paid out £400 million to the Barclays. However, £250 million had to be injected back into the online retail group – which owns Littlewoods and Very – due to provisions for mis-selling PPI alongside the credit it offers customers. News of the dividend payment comes as The Very Group appointed advisory firm STJ Advisors to explore ownership options, including a potential a listing on the London Stock Exchange’s junior AIM market. However, a placing would be unlikely to take place until 2022. The Very Group has been owned by the Barclay family for almost 20 years.
Central England Co-op rolls out one-hour home deliveries service to 100+ stores
More than 100 Central England Co-op stores are now offering eco-friendly home deliveries in under one hour. The retailer’s ongoing partnership with Snappy Shopper allows customers to order their grocery shop via a dedicated app and have it delivered to their door within the hour. Shoppers choose items using the app which are then picked and packed at a nearby Central England Co-op store by local staff before being delivered to them via a special electronic vehicle. The app also allows for people to click and collect their shopping from nearly 50 stores. Central England Co-op said the service is now available from selected stores in the following areas: Birmingham, Sutton Coldfield, Derby and parts of wider Derbyshire, Lichfield, Fradley, Alrewas, Nottingham, Kettering, Stafford, Burton and wider East Staffordshire, Leicester and Leicestershire and parts of Suffolk. Customers ordering via the Snappy Shopper app have access to over 5000 products and can request delivery within the hour seven days a week. All prices will be the same as in store, although there is a £3 charge for delivery. However, members can enjoy free delivery until the end of the year provided they have a special code to use on the app. Central England Co-op and separate from and independent of the larger grocery chain the Co-op. It employs over 7800 staff across 400 stores in 16 counties in the East and West Midlands, Yorkshire, Suffolk, Norfolk, Bedfordshire and Cambridgeshire.
Michael Kors & Jimmy Choo owner raises annual forecast
After its first quarter revenue and earnings significantly exceeded expectations, the owner of Michael Kors, Versace, and Jimmy Choo has boosted its annual forecast. Capri Holdings raised its forecast for annual revenue to approximately £3.8 billion, a month after predicting £3.66 billion, while warning that the Covid-19 Delta variant could dampen expectations around a quick recovery in Europe. The Jimmy Choo owner forecast annual adjusted profit to be about £3.24 per share, higher than the £2.74 to £2.81 range predicted earlier. In the company’s first quarter, revenue increased by 178 per cent to £8.9 million following the stronger than anticipated results across all three luxury houses. Sales at Michael Kors increased by 184 per cent year-on-year while sales at Jimmy Choo and Versace increased by 178 per cent and 158 per cent respectively. Capri Holdings chief executive John Idol said: “We were pleased by our first quarter performance which reflected the strength of Capri Holdings’ three global fashion luxury houses, Versace, Jimmy Choo and Michael Kors.” “All of our luxury houses significantly exceeded our revenue and earnings expectations for the quarter, as they continued to deepen consumer desire and engagement. “As a result of this encouraging start to the year, we are raising our fiscal 2022 revenue and earnings outlook.”
M&S offers new lorry drivers £2000 sign-on bonus
Marks & Spencer has become the latest retailer to announce that it will offer new lorry drivers a sign-on bonus as part of efforts to tackle the wider HGV driver shortage crisis. The high street stalwart said that from this month, new drivers joining M&S’s logistics partner Gist can earn up to £5000 in incentives through a combination of a £2000 sign-on bonus and up to three additional retention payments. Drivers can also benefit from discounts and a “generous” pension, as well as training and career development schemes. The news comes shortly after it was revealed that Aldi was set to hike the wages it pays to lorry drivers, while last week Tesco said it would offer a £1000 joining bonus to lorry drivers who join the Big 4 grocer between July 1 and the end of September. Tesco’s Booker wholesale division has also reportedly provided a temporary £5-an-hour pay rise for its Hemel Hempstead depot drivers, according to the Unite union. Supermarkets had to reassure customers last month that there was no need to panic buy following pictures of half-empty shelves and reports of temporary shortages brought about by a nationwide lorry driver shortage. The Road Haulage Association (RHA) previously said it believes there is a shortfall of about 60,000 haulage drivers in the UK after around 30,000 HGV driving tests did not take place last year due to the coronavirus pandemic. Hauliers blamed the shortage on a large proportion of drivers being foreign nationals from European countries who had returned to the EU amid Brexit changes, combined with truck drivers not being included on the government’s list of skilled labour, leaving new arrivals needing immigration paperwork. The so-called “pingdemic” is also thought to be having an impact on the driver shortage. The UK Government has since introduced emergency measures which it says will protect food supplies, allowing thousands of workers – including drivers – to avoid the need to self-isolate if identified as a contact of a Covid case. The government also pledged to support recruitment and retention in the HGV industry, in addition to other measures like giving drivers more official parking spaces and boosting standards of lorry parks to help encourage hauliers to stay in the sector. However, the plans were criticised by the RHA for failing to address “critical” short-term issues in the sector.
Amazon slapped with record £637m GDPR fine
Amazon is being slapped with the largest ever fine given by the European Union’s privacy watchdog for violating data protection rules.
Amazon was handed the €746 million (£637 million) fine by the Luxembourg National Commission for Data Protection (CNPD) on July 16 over accusations it breached General Data Protection Regulation (GDPR) rules for allowing customer data to be exposed to third parties.
The fine, first reported by Bloomberg, was disclosed in Amazon’s recent quarterly earnings report and has been strongly contested by the retailer.
“There has been no data breach, and no customer data has been exposed to any third party,” Amazon said in response.
“These facts are undisputed. We strongly disagree with the CNPD’s ruling.”
The CNPD is required by law to maintain professional secrecy which prevents it from commenting on the case or confirming the receipt of a complaint.
Amazon’s fine, which it says it plans to appeal, is the largest by far handed out under GDPR rules, which came into effect in May 2018.
The previous largest fine to date was Google’s €50 million fine in 2019.
Under GDPR legislation regulators can fine a company up to four per cent of its global annual turnover, or €20 million, whichever number is larger.
In June, it was reported that Amazon is facing another €350 million GDPR fine over accusations it uses customers’ data to inform targeted advertising without their permission, breaching GDPR rules.
Greggs back in profit & eyes 100 store openings this year
Greggs has said it plans to open around 100 new stores by the end of the year after a rebound in sales helped return the bakery retailer to profit. The high street food-to-go chain said it has an opportunity to grow to 3000 stores as it struck an ambitious tone after withstanding the impact of the Covid-19 pandemic. It told investors that the recovery in trade in recent months was “stronger than we had anticipated” as it saw strong trade in suburban areas and local high streets. The firm has also targeted growth areas such as delivery and drive-thru sales after the pandemic weighed on some core trade such as its travel sites. Greggs said its like-for-like sales for the four weeks to the end of July were 0.4 per cent above the levels it saw in the same period in 2019, before the pandemic struck. The Newcastle-based business said it now expects full-year profits to be “slightly ahead” of previous predictions as a result. New openings have also helped to buoy its total sales over the half-year to June to £546.2 million, to just short of the £546.3 million it posted in the same period in 2019. The retailer saw like-for-like sales drop 9.2 per cent against 2019 after the impact of the third national lockdown but it was lifted by the opening of 48 new sites. Greggs had 2115 locations at the start of July and said it is targeting 100 net openings for the current year to continue its strong growth plans. It said this is expected to create around 500 new jobs in the second half of the year. However, the business highlighted even more ambitious growth plans as it said it “has the opportunity to expand its UK estate to at least 3000 shops”. “Greggs once again showed its resilience in a challenging first half, emerging from the lockdown months in a strong position and rebuilding sales as social restrictions were progressively relaxed,” chief executive Roger Whiteside said. “Whilst there continue to be general uncertainties in the market, given our recent performance we now expect full-year profit to be slightly ahead of our previous expectation.”
Joules returns to profit after £200m sales boost
Joules has returned to profit after it saw full-year revenues climb to almost £200 million – which was driven by a strong online performance. The fashion and lifestyle retailer reported a pre-tax profit before exceptional costs of £6.1 million for its financial year ending May 30. This was within forecasts and also compares to a loss of £3.9 million the year prior. On a statutory basis, pre-tax profit came in at £2 million for Joules’ fiscal year, compared to a loss of £24.8 million. Meanwhile, full-year revenue rose 4.3 per cent year-on-year to £199 million, driven by a 48 per cent surge in online sales, which came in at £122 million for the year. Ecommerce now accounts for 77 per cent of Joules’ total retail revenue, up from 56 per cent the previous year. Overall store sales declined to £36.6 million from £63.3 million the year prior, which Joules said was due to the forced closure of non-essential retail stores, and cancellation of shows and events as a result of Covid-19. Joules said its stores were closed for approximately six months of the fiscal year compared with two months in the prior year. ”It is safe to say that FY21 was characterised by truly unprecedented trading conditions,” Joules chief executive Nick Jones said. “Against this backdrop, the group delivered strong strategic progress, including growing our digital proposition, increasing our active customer base, and further diversifying as a leading lifestyle platform with the successful acquisition of Garden Trading and the continued expansion of [marketplace] Friends of Joules. ”At the centre of our growth strategy remains the strong Joules brand. During the year we continued to deliver on our brand’s clear mission and purpose – to brighten our customers’ lives and conduct business in a responsible way. ”As more and more consumers increasingly valued their leisure time spent outdoors and time doing the things they enjoy with the people they love, our brand has become increasingly relevant to a greater number of customers, reflected by brand health metrics reaching all-time highs. ”As we move into the new financial year, the continued success and growth of Friends of Joules and our strengthened position in the home, garden and outdoor sector means that the group now offers significantly more products and categories than ever before, therefore providing customers with greater choice and more reasons to shop with us.”
Vans helps to drive strong quarter at VF Corp
VF Corp reported better than expected first-quarter earnings and sales amid rising demand for its top brands and raised its guidance for the year. The company, whose brands include Timberland, The North Face, Vans, and Dickies reported first-quarter revenue of £1.5 billion on Friday, up 104 per cent from £789 million in the prior-year period, with growth led by the Vans brand. In constant dollars, the company’s quarterly sales rose 96 per cent year over year. VF’s active segment saw revenue rise 128 per cent in the first quarter of 2021 compared to the same period the previous year, thanks to a strong 110 per cent increase at the Vans brand alongside a 26 percentage point revenue growth contribution from the acquisition of the cult streetwear label Supreme, which was completed in December. Excluding the impact of acquisitions, VF’s total Q1 revenue increased 90 per cent compared to the previous year. The company’s outdoor segment saw its quarterly revenue increase 81 per cent, including a 93 per cent rise at The North Face, while the work segment’s revenue climbed 69 per cent, including a 61 per cent increase at Dickies. VF’s domestic revenue rose 125 per cent, while international sales increased 84 per cent. This included a 126 per cent increase in Europe, the Middle East and Africa. Globally, VF Corp’s wholesale channel saw a 111 per cent rise in sales in the quarter while direct-to-consumer revenue increased 97 per cent, with digital revenue rising 25 per cent. The company’s net income for the three-month period totaled £232 million, or £0.28 per shares, compared to a loss of £204 million. VF Corp now expects its full-year revenue to be at least £8.6 billion, reflecting growth of 30 per cent, including a contribution of £430 million from the Supreme brand. Previously the company had predicted that its annual sales would come to £8.4 billion. VF Corp chairman Steve Rendle said in a press release: “Our teams delivered an outstanding first quarter, powering VF back to pre-pandemic revenue levels while driving an earnings recovery ahead of our expectations,” “We continue to see broad-based momentum across the portfolio, supporting an increase to our fiscal 2022 outlook for each of our largest brands. “Though the first quarter is a relatively small portion of our total year, this strong start reinforces my confidence in our ability to accelerate growth through fiscal 2022 and beyond.”
Sweaty Betty undergoes change of hands in £300m deal
Sweaty Betty now has a new owner after it was sold off to a US-based firm for almost £300 million. Wolverine Worldwide bought the British athleisure brand and retailer from investor L Catterton, which first invested in the business in 2015. Sweaty Betty was founded in Notting Hill, London, in 1998 by Tamara Hill-Norton and her husband, Simon, and now has shops across the UK and Asia, plus concessions in around 100 Nordstrom department stores in North America. Sweaty Betty recorded sales of £79.9 million in the year to December 2019, which marked an increase on the £63.1 million recorded in the previous year. Meanwhile, full-year losses narrowed from £3.8 million down to £1.1 million. The retailer’s sales process began late last year when it appointed advisors from Goldman Sachs to consider its options. The Covid-19 pandemic – especially the lockdowns – led to a rise in “athleisurewear”, which is what reportedly prompted Sweaty Betty to explore a sale. Chief executive Julia Straus will continue to lead the business after Wolverine Worldwide takes over. “Sweaty Betty has seen incredible growth over the past few years, and we are excited to further accelerate this growth as part of the Wolverine Worldwide family,” she said.
The Hut Group buys online beauty retailer Cult for £275m
The Hut Group has sealed a £275 million deal to buy online-only beauty retailer Cult Beauty. The ecommerce giant said the acquisition will boost its sales for the next full year by £140 million, with an earnings lift of around £10 million. Cult Beauty, which was founded in 2007 by Alexia Inge and Jessica Deluca, sells around 300 independent brands, such as Charlotte Tilbury, Living Proof and Molton Brown. The Hut Group (THG) said it would acquire Cult Beauty from private shareholders, including majority investor and Net-A-Porter co-founder Mark Quinn-Newall, and co-chief executive Alexia Inge. The sale was priced £275 million on a cash and debt-free basis. THG – which was valued at more than £5 billion in a mammoth stock market float last year – already operates more than 100 international direct-to-consumer fashion, lifestyle, health and beauty websites after embarking on an acquisition spree in recent months. THG also told investors it was now on track to surpass previous sales growth targets for the current financial year. “Cult Beauty is frequently the partner of choice for emerging indie brands due to its personalised, content-led approach and enthusiastic consumer base who are continually seeking new, innovative solutions to complement their beauty routines,” THG chief executive Matthew Moulding said. “Cult Beauty’s first-to-market reputation makes the brand an exciting fit for our THG Beauty division. “We anticipate fully migrating Cult Beauty onto the THG Ingenuity platform by the end of the year (within the first six months of acquisition), giving the brand access to the global digital features to underpin significant future growth.
Lidl is launching a new scan-as-you-go-shop app called Lidl Go
Lidl is set to launch new scan-as-you-shop technology allowing customers to scan and pay for items using their smartphones.
The new technology, understood to be called ‘Lidl Go’, will be rolled out at a Lidl store in Fulwell, southwest London, as part of a new pilot.
According to information in Lidl’s website, first reported by The Grocer, once Lidl Go has been downloaded onto a shopper’s smartphone they can use it to scan barcodes as they shop.
They can also use it to purchase unlabelled fruit and vegetables by scanning a barcode printed at a weighing station.
While other similar services allow shoppers to avoid checkout’s altogether, it is understood that users will still have to pay for goods at a checkout by scanning a “barcode generated by the app”.
The ‘Lidl Go’ app was trademarked in the UK by the supermarket last month, and was available to download in early access on the Google Play store today.
However, following requests for more information, Lidl has now removed both the early access app and mentions of it from its website.
While its Fulwell store is currently the only location where the technology can be used, Lidl is expected to expand the use more widely if the trial proves successful.
It’s not yet clear if Lidl Go will be part of its wider loyalty app Lidl Plus, which it launched across the UK earlier this year.
Hugo Boss forecasts further recovery through 2021
Hugo Boss has predicted that the business will continue to improve in the second half of the year, with revenues almost returning to pre-pandemic levels in the second quarter. Sales recovered in key markets such as Britain and China in the quarter. Tommy Hilfiger chief executive Daniel Grieder, who is due to present his strategy later today said: “We are well prepared to further drive our business recovery also in the second half of the year.” The retailer said its core Boss brand saw sales down a currency-adjusted 5 per cent, while Hugo, aimed at a younger audience, reported a sales increase 2 per cent. As the sales of casual styles continued to accelerate as the working from home trend boosts more relaxed dressing, Hugo Boss said it had also seen a recovery in sales of formalwear due to pent-up demand for business and party fashion-wear. Hugo Boss, already reported preliminary second-quarter results last month and added that sales were up 7 per cent compared to 2019 in the United Kingdom, and up 33 per cent in mainland China. The recovery in China came despite calls for a boycott of Western brands launched in late March over Western accusations of forced labour in Xinjiang when at least three Chinese celebrities said in March they were dropping Hugo Boss. Meanwhile, sales in Europe were just 4 per cent lower than 2019, while sales in the Americas were down 5 per cent. During the second quarter, around 20 per cent of the retailer’s global store network remained closed. The company reiterated that it expects currency-adjusted group sales in fiscal year 2021 to increase by between 30 per cent and 35 per cent.
Toolstation opens 500th store
Toolstation has just opened its landmark 500th store in New Malden, Surrey. The latest opening as part of Toolstation’s accelerated expansion programme, which during the height of the Covid-19 pandemic and associated lockdowns in 2020 saw the retailer open at least one new branch every week. Toolstation said it was continuing with the same pace of store openings this year, making it on track to open over 60 branches by the end of 2021. The DIY and hardware retailer added that its store expansion scheme will see it create over 450 job opportunities in 2021. Toolstation currently employs 5000 staff in the UK. The news comes as the Travis Perkins-owned business launches its brand new app for customers to shop with Toolstation or manage their accounts if they are Trade Credit customers. “To have grown so rapidly over the past few years is testament to both our colleagues and customers,” Toolstation managing director James MacKenzie said. “The opening of our 500th store is the latest milestone in our expansion plans and like all Toolstation stores it will benefit from Trade Credit and the launch of our app. “The app will help make it easier for our customers to work smarter and quicker by ordering to their nearest site or home and manage their accounts from their pocket. “At just the tap of a button, they will be able to check their credit accounts, pay balances and download their invoices, which means they can quickly wave goodbye to large amounts of paperwork.”
Mike Ashley confirms plans to step aside as Frasers Group boss
Frasers Group has confirmed speculation that its top boss Mike Ashley will be stepping away from his role as part of a leadership reshuffle. The parent company of Sports Direct, House of Fraser, Jack Wills, Evans Cycles and Flannels said it was currently proposed that Michael Murray – the retail tycoon’s prospective son-in-law – will become chief executive in May next year. It added that, should Murray take over, Ashley will remain on the board as an executive director. The 31-year-old potential replacement, who is engaged to the founder’s daughter Anna, is currently “head of elevation” at Frasers Group and has been tasked with modernising the business and creating a more upmarket image. Frasers Group told investors that a pay and bonus deal is currently being drawn up on the basis that Murray would become chief executive. “The group’s elevation strategy is transforming the business and receiving positive feedback from consumers and our brand partners, especially on projects such as the new Oxford Street Sports Direct which opened in June 2021,” the firm added. “The board consider it appropriate that Michael leads us forward on this increasingly successful elevation journey.” Ashley has been one of the high street’s most colourful characters since founding Sports Direct in 1982. He has rapidly grown his retail empire in recent years, snapping up a number of distressed British retailers, starting with House of Fraser in 2018. The firm was formerly known as Sports Direct International before it underwent a name change in December 2019 to reflect the direction of the business after acquiring House of Fraser. Frasers Group also revealed today that its profits plunged for the past year after sales were hit by enforced high street closures during the pandemic. The retail giant said pre-tax profits dived by 94.1 per cent to £8.5 million for the year to April 25, compared with £143.5 million in the previous year. It also recorded an 8.4 per cent decline in overall revenues for the same period, to £3.63 billion. Frasers Group cited declining sales in both UK sports retail and European retail divisions, largely due to enforced store closures from lockdowns. However, noted an uptick of 1.9 per cent in its premium lifestyle business, to £735 million, thanks to an improved online offer and flagship store openings of the Flannels fascia. Frasers Group also said it was now looking to continue its Elevation No Limits strategy, with a focus on store investments and warehouse capabilities. It added that it was eyeing up a number of ex-Debenhams stores to takeover in the near future, but first called for clarity from the government on business rates to ensure the “viability of these investments and the jobs that could be created”. Ashley said: “The group is continuing to invest in its physical and digital elevation strategy and our omni-channel offering is growing in strength. “Our stores in the UK have reopened above expectations and our online channel continues to significantly outperform pre-Covid-19 periods. “Nonetheless, management remains of the view that there is a high risk of future Covid-19 pandemic restrictions, likely to be over this Winter and maybe beyond.”
John Lewis Partnership named and shamed over minimum wages
John Lewis Partnership has been named at the top of a government-backed list of almost 200 businesses that breached minimum wage laws between 2011 and 2018. The firm, which runs the upmarket Waitrose supermarket chain as well as John Lewis department stores, was among 191 businesses that ranged from retailers to football clubs that were named and shamed by Department for Business, Energy & Industrial Strategy (BEIS). The BEIS said total of £2.1 million was found to be owed to more than 34,000 workers following investigations by HMRC dating back to 2011. Named employers have been made to pay back what they owed, and were fined an additional £3.2 million. John Lewis Partnership was accused of underpaying nearly 20,000 staff by a total of £941,356, or just under £49 each – the highest of any business named. The retail giant said it was “surprised and disappointed” to be on the list. According to The Telegraph, the partnership’s bosses were reportedly furious to learn of the public shaming by the government over something that was resolved years ago. “This was a technical breach that happened four years ago, has been fixed and which we ourselves made public at the time,” a John Lewis Partnership spokesperson said. “The issue arose because the Partnership smooths pay so that Partners with variable pay get the same amount each month, helping them to budget. “Our average minimum hourly pay has never been below the national minimum wage and is currently 15 per cent above it.” The next retailer on the was convenience store operator McColl’s, which underpaid 4366 staff by £258,048, followed by rival One Stop Stores which failed to pay 2631 workers £56,505 of wages. The Body Shop was also named and shamed on the list. Almost half of employers named on the list wrongly deducted pay from workers’ wages, including for uniforms and expenses, while 30 per cent failed to pay workers for all the time they had worked, such as when they worked overtime, and 19 per cent paid the incorrect apprenticeship rate. “Our minimum wage laws are there to ensure a fair day’s work gets a fair day’s pay. It is unacceptable for any company to come up short,” business minister Paul Scully said. “All employers, including those on this list, need to pay workers properly. “This government will continue to protect workers’ rights vigilantly, and employers that short-change workers won’t get off lightly.” Low Pay Commission chairman Bryan Sanderson said: “These are very difficult times for all workers, particularly those on low pay who are often undertaking critical tasks in a variety of key sectors including care. “The minimum wage provides a crucial level of support and compliance is essential for the benefit of both the recipients and our society as a whole.” A total of 2300 employers have been named since the current scheme was introduced in 2014. Shadow employment rights and protections secretary Andy McDonald said: “The government isn’t doing nearly enough to crack down on companies who pay under the national minimum wage. “Just six employers have been prosecuted for paying employees less than the minimum wage in the last six years despite more than 6,500 breaches having been found. “Laws protecting workers aren’t worth the paper they are written on if they are not enforced, but weak employment rights and a lack of enforcement action leaves too many working people vulnerable to this exploitation.” TUC head of economics Kate Bell said: “Minimum wage workers have been at the heart of the pandemic, and deserve a decent wage of at least £10 an hour. “But these cases show many workers aren’t even being paid the legal minimum, with household name employers flouting their responsibility to properly pay staff, and they are likely to be just the tip of an underpayment iceberg. “Government should step up inspections to catch every employer that underpays staff.”
Adidas raises outlook as sales soar
Adidas has lifted its 2021 outlook for the second time this year after sales increased by 52 per cent in the second quarter. In a release, the company said the growth was achieved against the background of extended lockdowns in the Asia-Pacific region, which in combination reduced currency-neutral revenue growth by a low-double-digit rate during the quarter. “With sports taking back center stage this summer, we delivered a very successful quarter. Driven by the strength of our brand and better-than-expected demand for our products, we saw an acceleration in our top- and bottom-line,” Adidas CEO Kasper Rorsted said. “This momentum gives us all the confidence to increase our full-year outlook despite the external challenges that our industry continues to face.” Second quarter sales rose 52 per cent to £4.3 billion while the retailer reported a quarterly operating profit of £461 million, compared to an operating loss of £223 million in the previous year amid forced store closures at the height of the pandemic. Both revenue and operating profit in the second quarter were better than expected by analysts. Adidas has now increased its top and bottom line outlook for the remainder of the year and now expects currency-neutral sales to increase at a rate of up to 20 percent in 2021, driven by strong double-digit improvements in all markets. This new outlook reflects sales growth of up to 7 percent in the second half of the year compared to 2020. The company’s full-year gross margin forecast continues to be for a level of approximately 52 per cent. The operating margin is now expected to increase to a level of between 9.5 per cent and 10 per cent while net income from continuing operations is now projected to increase to a level of between £1.1 billion and £1.2 billion compared to previous outlook of £1.06 billion to £1.23 billion.
Amazon's Prime Air UK team suffer mass staff exodus as it continues to fail
Amazon’s secretive Prime Air project’s UK team has been gutted, with over 100 employees losing their jobs, according to a report from Wired.
The UK team’s primary goal was to test the service, which has been plagued with difficulties since it was announced in 2013.
Prime Air is Amazon’s answer to rapid drone delivery, where it aims to deliver items to customers in under 30 minutes via unmanned drones.
However the service has yet to properly launch as it has suffered a number of setbacks including staff turnovers and regulatory barriers.
According to a former Prime Air employee in an interview with Wired, the project is “chaotic” as managers which had little to no knowledge of the industry were being brought in from other areas of the business.
Some staff reported to having three different managers in one month.
Amazon has aimed to quash such reports by revealing that there are still employees working at the UK division, however they have not provided a total headcount.
Former employees have revealed that every few months an nameless American executive would arrive from the company’s head office, order the team pizza before doubling their workload.
“Everything started collapsing inwards because they (Amazon) piled too much on, they put people in charge who didn’t know anything about the project and they oversold,” the former employee said.
On the surface, Amazon’s Prime Air service looks to be heading in the right direction after receiving US Federal Aviation Authority approval to start flying drones in August last year.
However, according to insiders, it is in disarray, with another employee saying “It’s all one gigantic oversell, just so many promises that can’t be kept.”
Prime Air is planning on instigating a soft launch in the third quarter of 2022, according to people familiar with the matter.
Hammerson to transform empty retail space into hotels, offices & homes
The new boss of Birmingham Bullring operator Hammerson has laid out a new growth strategy which will see the shopping centre giant seek more opportunities away from retail. Hammerson said that it plans to “reinvigorate” its assets and drive growth filling empty retail units with a variety of offers in a bid to improve footfall. Rita-Rose Gagne, who joined the London-listed firm late last year, said this could include food halls, events spaces and rooftop theatres to boost trade in the short term. However, she said the firm would repurpose some void retail spaces for alternative uses such as homes, hotels and office space. Hammerson said it saw a particularly strong opportunity to pursue this shake-up across its current department store space, where it has more than 800,000sq ft of empty space or short-term leases. “As we emerge from a unique moment in time, I see a pathway to create sustainable value as we transform the business to become more agile and able to anticipate and respond to this change,” Gagne said. “We own flagship destinations around which we can curate and reshape entire neighbourhoods and city centre spaces for generations to come.” The firm, which also owns the Brent Cross shopping complex, updated investors as it posted a pre-tax loss of £354 million for the six months to June. Hammerson also saw a 6.4 per cent decrease in the value of its portfolio to around £5.5 billion. The firm suggested it was on the path to recovery following the pandemic but highlighted that it will continue to feel the impact of the rent moratorium for tenants, which was recent extended until March. The policy, which bans landlords taking tenants to court over unpaid rent, “has led to some retail businesses openly ignoring their rental obligations when they have the means to pay”, Hammerson said. It said that the government “continues to undermine the attractiveness of the sector and its investment case” through the extension while it also called for a major overhaul of business rates.
The Fragrance Shop opens 200th branded store
The Fragrance Shop has picked Southport as the location of its 200th branded store opening as pushes on with ambitions to open 20 new sites per year. The launch of the shop last month brings the perfume retailer’s overall portfolio to 203 stores across the UK. It comes after The Fragrance Shop said it experienced “exponential online and in-store growth” during Covid-19 pandemic, with “business booming”. The retailer said it now has a target to open 20 new stores a year. To date in 2021, The Fragrance Shop has opened three brand new stores around the UK, with a further 10 already agreed and in the pipeline for launch later this year. “This is a huge milestone for the company. We are a family business, and now we’re celebrating our 200th The Fragrance Shop store, bringing our overall store portfolio to 203 across the UK,” chief executive Sanjay Vadera said. “The past 18 months have been challenging for consumers and the UK high street as a whole, but it’s a testament to our customers that we are able to keep growing and opening new stores to keep up with demand.” “We’re dedicated to continuing expanding our physical store presence, allowing The Fragrance Shop to deliver our passion, innovation and expertise to our dedicated shoppers face-to-face, and offer more jobs to local people to boost the economy. “With The Fragrance Shop continuing to grow both in store and online we have more exciting plans in the pipeline for the future, so watch this space.”
Matalan creates 200 new jobs through government Kickstart scheme
Matalan has created over 200 jobs under the government’s Kickstart scheme to help young people gain invaluable work experience and industry recognised qualifications. As part of its Early Careers proposition, Matalan is creating bespoke placements across the business from head office to retail and logistics, to assist young people aged 16-24 to gain meaningful long-term employment. Applications are now open and will close in December. Matalan said it hopes the scheme “will inspire the next generation of talent to make a career in retail their preferred choice”. The government’s Kickstart scheme is a £2 billion fund to create hundreds of thousands of high quality, six-month job placements for young people aged between 16 and 24 years old. Originally announced in July last year as part of the government’s Plan for Jobs, it is designed to support the development of new skills in order for young people to move into sustained employment once they have completed their Kickstart-funded role. Through its partnership with Qube Learning and the Retail Trust Matalan said it would offer individuals the opportunity to achieve a fully funded Level 2 qualification to aid their future employability, as well as providing health and wellbeing support. “We are proud to be becoming a Kickstart employer and supporting young people to launch their careers through the Kickstart scheme,” Matalan HR director Emma Crossland said. “Matalan is committed to supporting youth employment, and the scheme is offering a great opportunity, not only for us to provide meaningful training and experience but also to gain access to a high calibre of talent who can join us in our mission to provide real value and quality every day to modern families. “We look forward to welcoming successful applicants into the Matalan family.”
Fortress consortium increases Morrisons takeover bid to £6.7bn
The private equity-backed consortium vying to buy Morrisons has increased its bid for the supermarket chain to £6.7 billion amid speculation of a rival bid. The consortium led by US private equity firm Fortress – which is also the owner of Majestic Wine – has increased its previous offer by £400 million. The consortium said it increased its offer amid “speculation regarding a possible counter-offer by Clayton, Dubilier & Rice (CD&R)”, a rival US private equity firm which saw a £5.5 billion approach rejected last month. UK takeover regulators had given CD&R a deadline of August 9 to either place its own firm bid for Morrisons or walk away. It also comes after a string of Morrisons’ investors – including largest shareholder Silchester – said they would not back the original 254p per share offer agreed. The latest £6.7 billion offer will value Morrisons at 272p per share. The bidding consortium is being led by Fortress, along with Singaporean sovereign fund GIC. Another private equity firm Apollo, is still in talks to join the consortium. Investors will have their say on the offer, which is already supported by the Big 4 retailer’s board of directors, at a general meeting on August 16. “Morrisons directors believe that the increased Fortress offer is in the best interests of Morrisons shareholders as a whole, and accordingly unanimously recommend that Morrisons shareholders vote in favour of the resolutions required to implement the increased Fortress offer,” the company said in a stock market statement.
Pets at Home trials new recycling initiative
Pets at Home is trialling dedicated recycling points for flexible pet food packaging in 40 of its stores as it looks to combat flexible pet food packaging waste. The initiative is being supported by pet food producers Mars and Purina PetCare. According to research by environmental charity Hubbub, which has partnered with Pets at Home in the scheme, 26 per cent of pet owners say they are confused over what pet food packaging can or can’t be recycled, while 14 per cent would like to see their local pet shop offer a recycling point for pet food packaging. Working with specialist recycler Enval, which has the ability to recycle and recover flexible plastic, the trial will see pet food pouches go through a specially designed process to turn the packaging back into materials ready to be reused. If successful, the initiative will be rolled out further with the aim of having recycling points in the majority of Pets at Home stores by the end of 2022. The trial will also take place in three Vets4Pets practices. Flexible plastic packaging which is plastic that can be bent, compressed, or scrunched provides a number of advantages to pet owners, including increased shelf life, portion control, and convenience. Flexible plastics represent a quarter of all UK consumer plastic packaging however only 4 per cent is currently recycled. Pets at Home chief people and culture officer Louise Stonier said: “We are really excited to be able to offer this recycling service as we know it is important to make it convenient for our customers to return their used packaging when they come to our pet care centres. “This is all part of “Our Better World Pledge” to create a better world for pets and the people who love them. Jack Hodgkiss, Creative Partner at Hubbub, said: “This trial marks a significant stepping stone towards tackling the issues associated with plastic packaging,” “Around 44 per cent of UK households have pets1 and most of them don’t have access to flexible plastic recycling through their local council. “We are thrilled to be partnering with Pets at Home to make flexible plastic recycling possible for many of the UK’s pet owners.”