Monthly Archives: May 2016

UK fashion retailer Austin Reed to wind down

(Reuters) – British fashion retailer Austin Reed Ltd will start winding down as no viable offer was received for the company over a five-week sale process, its joint administrators said.
The retailer will shut its 120 stores by the end of June, which will affect about 1,000 jobs, Austin Reed’s administrators at AlixPartners Services UK LLP said in a statement on Tuesday.
Five of the company’s outlets inside Boundary Mills stores will be sold to AR Operations Ltd. The deal includes the transfer of 28 employees to AR Operations.
The retailer’s ‘Austin Reed’ and ‘Country Casuals’ brands have also been sold to Border IP Ltd.
The statement did not provide the value of both the deals. An AlixPartners spokeswoman was not immediately available for comment.
Austin Reed, a 116-year-old business, fell into administration on April 26 after struggling for years in the UK’s intensely competitive clothing market.
The news came just a day after British department stores group BHS was placed into administration, putting the 88-year-old retailer in danger of disappearing from the high street and placing 11,000 jobs at risk.

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John Lewis makes staff wait to be partners 

John Lewis makes staff wait to be partners as cost of the National Living Wage begins to hit British businesses
Starters at John Lewis and Waitrose used to become partners upon joining 

Now they will be forced to pass a three month trial before they can qualify 

B&Q and Morrisons among firms offsetting growing wage bills by slashing perks

John Lewis is putting new recruits on probation for the first time in its 152 year history following the introduction of the National Living Wage.
Starters are at both John Lewis and Waitrose will be forced to pass a three-month trial before they can qualify as a fully fledged ‘partner’, but they will still be eligible to share in the group’s annual bonus.
Junior employees who fail the test are either given another month to prove themselves or are fired. Until now starters at both John Lewis and Waitrose became ‘partners’ automatically upon joining the group.
Changes: Starters are at both John Lewis and Waitrose will be forced to pass a three month trial before they can qualify as a ‘partner’ and become eligible for an annual bonus 

Changes: Starters are at both John Lewis and Waitrose will be forced to pass a three month trial before they can qualify as a ‘partner’ and become eligible for an annual bonus 

The group has always tried to set itself apart from its more cut-throat rivals as it is owned by its 91,500 staff – or partners – rather than shareholders.
But the living wage appears to have brought out a more ruthless streak in Middle England’s favourite retailer – which opened its first store on Oxford Street in 1864.
Bosses have also warned staff they must work harder in order to justify their increased salary.
The tough new stance has infuriated MPs which have expressed fears that John Lewis could be preparing to cut the famous perks for its employees.
Last year staff received an average annual bonus of £1584, with the group paying out £145million in total.
From April 1 all employees aged 25 and over must be paid the living wage of £7.20 an hour – 50p more than the previous minimum wage.
This has been hailed by campaigners as a victory for millions of low paid workers.
But a string of firms including B&Q and Morrisons have offset the growing wage bill by slashing other perks such as double pay on Sundays and Bank Holidays.
Benefits: As partners in the business, Waitrose staff enjoy generous bonuses 

Benefits: As partners in the business, Waitrose staff enjoy generous bonuses 

In John Lewis’s latest business plan, it outlines ways to boost profits and increase the productivity of staff.
To ensure new joiners are up to scratch, it says they will have to undergo a ‘meaningful’ three month probation period.
The trial tests ‘their commitment to the partnership and their levels of productivity and engagement.’
The probation period can be extended for a month for junior roles and three months for senior positions if there are concerns.
Staff on probation will still be able to share in the annual bonus as long as they were employed by the group on January 31 of any bonus year.
The probation period will initially only be tested out in a number of John Lewis stores and Waitrose supermarkets.
But it will be extended across the UK is it proves to be a success.
Justifying the tougher approach, chairman Sir Charlie Mayfield said employees must work harder to justify earning the higher living wage, which is set to rise above £9 an hour by 2020
Sir Charles, who received £1.5million last year, said:
‘You can only afford to pay someone more if the value of their contribution is better. What was OK at £7.20 an hour is not OK at £9.20 an hour.’
This triggered a furious response from Labour MP Joan Ryan who has urged the chancellor to take action against firms which have stripped away benefits since the living wage was introduced,
Ms Ryan said: ‘This is very worrying and completely unacceptable. I fear it is just the thin end of the wedge – we’ve already seen a number of firms cutting perks after the introduction of the living wage.
John Lewis and Waitrose have always enjoyed a high degree of confidence among the public because of the way they treat staff.
This move will not reflect well on them.’
Waitrose has already been accused of cutting perks for staff to help pay for the national living wage, after stopped paying Sunday and overtime rates for new workers.
But it has denied this has anything to do with the living wage.
The prospect that their benefits may be under threat will unnerve John Lewis employees who have seen their bonus cut for three consecutive years as profits have fallen.
Sir Charlie Mayfield has infuriated eurosceptics by warning that quitting the EU could damage the business, and lead to further cuts to the bonus. 

Holding unveils $272m waterfront development

Dubai Holding, a leading investment holding company, has announced the launch of its new waterfront destination, ‘Marasi Business Bay,’ to be developed along the creek within Business Bay destination at an estimated cost of Dh1 billion ($272 million).  
A breakthrough master-planned development, ‘Marasi Business Bay embraces the longest promenade spanning 12 km, the UAE’s first-ever water homes, retail options, floating restaurants, leisure facilities and five palm tree-lined marinas, said a statement from Dubai Holding.
Located on the Dubai Canal Project, Marasi Business Bay is set to become a major future landmark in Dubai – an unprecedented unique waterside destination concept in the UAE and the Middle East.
It boasts of the region’s first purpose-built yachting destination with floating restaurants and cafes, alongside onshore boutique shopping and a range of leisure and entertainment facilities, it stated.
The development’s residential units, which are to be built on water with boat access, provide direct canal views and create a unique new living proposition for the real estate market in Dubai, it added.
Commenting on the new project, chairman Mohammad Abdulla AlGergawi, said: “The new project will strengthen the historic relationship between Dubai and its creek through the addition giving a new dimension to the residential, tourism and leisure offerings along the Dubai Creek.”
“Our objective is to create innovative and unique developments, that accentuates the essence of Dubai’s culture and heritage, and presents what the future emirate looks like; a city that enriches the lives of its residents and visitors alike through unparalleled lifestyle experiences, adding value for investors and Dubai’s economic diversification,” stated AlGergawi.
Located along the Dubai Water Canal, this waterfront destination embraces the longest water-side promenades, comprising a space rich with green spaces, he added.
According to Gergawi, the waterfront project will be developed in phases. The work has already started on the first phase, The Promenade, which will be completed by September this year in line with the opening of RTA’s Dubai Water Canal Project, followed by The Park and The Yacht Club.
A substantial part of the development is set for completion by 2020, with overall works concluded by 2023. The total investment cost exceeds AED one billion, and will be self-financed in partnership with local financial institutions.”
The development will feature a range of local and international businesses spread over 250,000 sq m of open space, including parks and the waterfront promenade. Over 100 shops and outlets will be built on a 16,000 sq m area, while the Park area spans almost 60,000 sq m.
On the Yacht Club, Gergawi said it will feature the first water homes in the UAE, providing views unlike any other in the region.
“And with its prime position along the waterfront promenade, these luxury homes will offer leisure and retail spaces for luxury dining, retail and entertainment facilities,” he stated.
CEO Fadel Al Ali said: “Dubai Properties Group enjoys a long standing experience of creating unique and global destinations. It has an extensive experience spanning more than ten years in the field of planning, developing and managing a diversified portfolio of famous destinations and projects that respond strategically to the needs of the diverse city of Dubai and the requirements of its residents.”
“Dubai Properties, through the smart and strategic development of destinations, seeks to enrich the lives of residents and visitors alike and to promote growth and economic diversification in the UAE,” he stated.
Al Ali said Marasi Business Bay was yet another strategic project of Dubai Holding, set to mark a first in the city’s urban fabric with unique mixed-use landmarks.
“Harnessing the excellence and track record of Dubai Properties and innovation that runs across the Group, Marasi Business Bay is being developed with the aim of boosting the tourism industry in Dubai, and will reinforce Dubai’s position as a global tourism destination, in line with the UAE Vision 2021,” he added.-

Get ready for Starbucks drive-throughs in South Africa

Starbucks SA brand owner, Taste Holdings, is basking in the warm response the coffee chain has had since its local launch in April – and has detailed its plans for the franchise moving forward.
Taste reported its results for the full year ending 29 February 2016. Core revenue was up 41% to R1.01 billion, however Core EBITDA decreased to R47.2 million, while HEPS sunk massively to 1.5 cents per share from 16.1 cents per share in 2015.
This was due to increased borrowing and additional shares in issue, along with a depreciation increase caused by the corporate store ownership strategy involved with Domino’s pizza.
The group added 74 Domino’s Pizza chains in 16 months, and moved from having no corporate-owned franchises to having 26.
“Moving from no corporate stores to 26 in just four months, did not allow sufficient time to establish the necessary systems and controls, nor the human resource capability to align partners with the Domino’s culture and systems,” Taste said.
“This misalignment has been the root cause of many of the stores challenges and ultimately reflected in our short-term earnings. We are however confident that these challenges will be overcome in this year.”
Starbucks success
Despite the Domino’s downer, the group was extremely happy with its launch of Starbucks in the country, saying the launch exceeded its – and Starbucks Global’s – expectations, with with queues still visible at the outlets weeks later.
“Our food offering is performing better than we envisaged and we are pleased with the adoption of the brand by the younger population – a segment that we believe is considerably underserved among South African offerings,” Taste said.
“We have also been able to offer what we believe is simply the fastest free Wi-Fi in a public retail food setting in South Africa.”
Looking at its strategy for Starbucks moving forward, the group said it would proceed with caution, having learned from its costly mistakes with Domino’s.
While the group previously said it would look at adding 12-15 new stores a year, it has now said it will rather focus on single-store profitability and testing out new concepts and formats for the brand.
Included in this is a trial for a drive-thru format for Starbucks in South Africa, which is expected in the “early roll-out” phase of the brand’s launch in the country.

Apple to Open First Apple Stores in India Within 18 Months

Following the Indian government’s approval of Apple’s request to open retail stores in the country, Apple is planning to launch three stores in India over the course of the next 18 months. 
Apple will open Apple-branded retail stores in Delhi, Bangalore, and Mumbai before the end of 2017, according to a source that spoke to Indian website FactorDaily. 
A team of more than 40 Apple executives and employees is said to be searching for ideal real estate locations for the three stores, each of which will span more than 10,000 square feet and will be located at “high street locations.” Apple is planning on investing $3-5 million per store. 
indian_flag At the current time, Apple has no retail stores in India and instead sells its products through third-party distributors in the country. India has decided to exempt Apple from a policy that requires foreign stores to source at least 30 percent of their goods from domestic suppliers, opening the door for the first retail stores. 
While Apple will be able to open Apple Stores in India, a second request to import refurbished iPhones, which it could sell at lower price points, was recently denied. India, like China, is seen as a largely untapped market for Apple, and the company is eager to gain a stronger foothold in the country. 
In addition to retail stores, Apple is planning to open a $25 million technology development site in Hyderabad, India, which will house more than 125 employees and focus on maps development. Apple is also said to be planning to unveil a startup accelerator in India, designed to incubate ideas for new iOS apps. 
Tim Cook is planning to visit India this week, where he is expected to announce the accelerator and perhaps the new retail stores.

Fury as Green set to receive £35million from sale of BHS

By Laura Chesters City Correspondent For The Daily Mail 23:47 12 May 2016, updated 01:49 13 May 2016

Green disposed of the High Street firm for £1 to Retail Acquisitions in 2015

He is thought to have offered around £80million to ease pensions deficit

Now emerged £35million was an offer to write off loan he made to business

Sir Philip also owns head office freehold, valued at more than £40million

Sir Philip Green (pictured) disposed of the High Street firm last year for £1 to Retail Acquisitions led by thrice bankrupt Dominic Chappell

Sir Philip Green (pictured) disposed of the High Street firm last year for £1 to Retail Acquisitions led by thrice bankrupt Dominic Chappell

Philip Green could get back £35million of a loan he made to BHS if the retailer is sold, it has emerged.
The billionaire disposed of the High Street firm last year for £1 to Retail Acquisitions led by thrice bankrupt Dominic Chappell.
It fell into administration last month with a black hole in its pension scheme valued at around £571million.
Sir Philip is thought to have offered around £80million to ease the pension fund deficit. But it has emerged that £35million of this was an offer to write off a loan that he had made to the business.
While this loan still exists, it effectively means that Sir Philip is a main creditor of BHS and is entitled to have his money repaid should the firm be sold.
Sir Philip also owns the freehold of BHS’s head office in London which is valued at more than £40million. This means that should BHS close down or be sold on, he would keep the freehold. Subject to the lease he could be able to let out the building to new tenants – ensuring he keeps rent payments. The firm’s collapse puts 11,000 jobs at risk, along with the pensions of 20,000 savers – who would lose 10 per cent of the value of their retirement payments if they had to be rescued by the Government’s Pension Protection Fund.
Sir Philip’s loan to Arcadia dates back to 2009 when he lent the company £256million. Around £216million was written off when it was sold in March last year.
The remaining loan was turned into a ‘floating charge’ against BHS assets. The value of this loan is now around £35million. It is thought three parties have been shortlisted to buy BHS as a going concern, and an announcement on a deal could be made early next week.
MP Frank Field of the Commons Work and Pensions Committee, which is looking into BHS, called for its pension fund to be given a greater priority than Sir Philip’s charge against the collapsed chain.
He said: ‘Morally, the pension fund should be at the front of the queue. It will be one of the reforms the committee will be looking at when it considers its recommendations.’
Labour MP Peter Kyle, a member of the Business Select Committee, said: ‘It is time that Philip Green put the staff and customers at BHS at the forefront of his thinking until the staff and the company finally have the secure future they need.’
Sir Philip bought the 88-year-old High Street institution for £200million in 2000. 

Tesco CEO Gets £3m Bonus As Staff Share £185m

The chief executive of Tesco has been awarded an annual bonus of nearly £3m after Britain’s biggest grocer moved back into profit after notching up the biggest loss in its history a year earlier.
Sky News has learnt that Tesco will disclose in its annual report – to be published on Friday – that Dave Lewis was handed a cash-and-shares bonus close to the maximum potential payout of £3.15m.
The award to its chief executive will be announced alongside a £185m bonus pot to be shared out among the company’s 265,000 UK employees – equating to 5% of each worker’s annual salary.
Sources said that Mr Lewis had been determined to fulfil a commitment he made in April to reward employees for delivering the beginning of a desperately needed turnaround.
The company – once a dominant force in British business – has endured a torrid few years, culminating in a £6.4bn loss in 2014, one of the biggest in UK corporate history.
A Serious Fraud Office inquiry into a vast overstatement of profits, launched soon after the departure of Mr Lewis’s predecessor, Philip Clarke, remains ongoing.
Mr Lewis, a former Unilever executive, has begun to improve Tesco’s performance, with the group showing a return to like-for-like sales growth in the fourth quarter of last year.
A source said on Wednesday that “the foundations had been laid” for a sustainable turnaround of the business, with net debt slashed by 40% after the sale of its operations in South Korea, improved cashflows and increased sales volumes.

The supermarket group’s long-term share plans have failed to pay out for several years because of the company’s weak performance, and City investors are said to be keen for Mr Lewis to be adequately incentivised to see the job through.
The Tesco chief earns a salary of £1.25m and can earn a maximum annual bonus worth 250% of that sum.
His bonus will therefore put him in line for a package for 2015 worth well over £4m.
Although Tesco is unlikely to face an investor revolt of the kind seen at many blue-chip companies’ annual meetings this year, some shareholders may be surprised at the size of his bonus given that Tesco shares have fallen by a third during the last 12 months.
Mr Lewis has embarked upon a clearout of loss-making businesses, including Dobbies Garden Centres, Giraffe and Harris & Hoole, with Euphorium, a bakery business, set to be closed.
The move comes as part of a decision by Mr Lewis and senior colleagues to sell a string of under-performing or non-core businesses bought during an ill-fated acquisition spree over the last decade.
Many of the smaller businesses were bought by Mr Clarke, who had ambitions to diversify the retailer’s appeal to customers and find ways of utilising excess space in its stores.
Mr Lewis now wants to offload businesses and brands which either dilute Tesco’s margins or act as a distraction from its principal revival mission.
Mr Clarke’s tenure ended in 2014 when he was sacked after a string of profit warnings.
The beginnings of a turnaround in Tesco’s performance comes amid continuing competition with discounters Aldi and Lidl, and its more traditional rivals J Sainsbury, Wm Morrison and the struggling Asda.

Superdry achieves strong full year sales growth

Superdry owner SuperGroup has grown its full year revenues by 21.1% to £589.5 million as it focuses on category led product innovation and geographic and channel expansion.
In the year to 23 April, the retail division increased its revenues by 24.5% with like-for-likes sales climbing by 11.3%.
As a result, SuperGroup expects underlying pre-tax profit for the year to be in the range of £72.5 million and £74 million.

In a statement, the company said progress in North America and China is going according to plan and that initial losses in the regions will be in line with market guidance. This will lead to a small year-on-year dilution of operating margin.
Wholesale revenue grew by 13.7% in the year following a strong second half performance.
As well as opening new stores, the company plans to introduce two new distribution centres during 2016 to serve its retail customers in Europe and North America.
Euan Sutherland, SuperGroup chief executive, said: “The group has traded robustly throughout the final quarter as we continue to deliver our strategy to create a global lifestyle brand. We have opened 24 net new stores across our targeted European markets and have a strong pipeline of new stores for the new financial year.
“Our focus remains on the extension of the Superdry brand and execution of clear growth opportunities, under-pinned by continued investment in infrastructure to strengthen our business.”

World’s first Warner Bros. Hotel to open in Abu Dhabi within US$1 billion themed park
May 7, 2016
Miral, the asset management company responsible for the development and management of Yas Island, and Warner Bros. have officially announced that a Warner Bros. themed destination is set to open in Abu Dhabi.
Situated on Yas Island, the development will include an immersive Warner Bros. theme park and the world’s first Warner Bros. branded hotel.
The first phase of the project, Warner Bros. World Abu Dhabi, is set to open in 2018.
Construction is underway and rides are in production.
Warner Bros. World Abu Dhabi will bring together stories and characters from the studio’s unparalleled portfolio of DC Comics super heroes, including Batman, Superman and Wonder Woman, as well as Warner Bros. cartoons such as Bugs Bunny, Scooby-Doo and Tom and Jerry.
Guests of all ages will be able to step inside Gotham City and Metropolis, and experience the cartoon worlds of Looney Tunes, Hanna-Barbera and more, all under one roof.
Located alongside the world’s largest indoor theme park, Ferrari World Abu Dhabi, and the iconic Emirati-themed water park, Yas Waterworld, Warner Bros. World Abu Dhabi aims to help Yas Island take its annual visitor tally from 25 million in 2015, to 30 million in 2018.
Mohamed Khalifa Al Mubarak, chairman, Miral, said: “World Abu Dhabi theme park is estimated at US$1 billion and is a milestone in the emirate’s journey to put Abu Dhabi on the global map and become one of the world’s leading tourist destinations.

Javid orders BHS probe as Green agrees to meet MPs

Business Secretary Sajid Javid has ordered the Insolvency Service to investigate the collapse of UK department store BHS.

It comes as former owner Sir Philip Green agreed to appear before two Commons committees to answer questions about the collapse.
Sir Philip sold BHS to Retail Acquisitions last year for £1, but has faced criticism about his role.
BHS went into administration last month, threatening thousands of jobs.
Mr Javid said in a statement: “I have asked the Insolvency Service to bring forward its investigation rather than wait three months for the administrators to report before launching their inquiry.
“This investigation will look at the conduct of the directors at the time of insolvency and any individuals who were previously directors. Any issues of misconduct will be taken very seriously.”
Sir Philip bought BHS in 2000 for £200m, but sold the department store last year.
At the time, there were questions over the lack of retail experience of Dominic Chappell and his team at Retail Acquisitions, which became the majority shareholder of the department store.
A fortnight ago, the business fell into administration with debts of £1.3bn – including a pension deficit of £571m – putting 11,000 jobs at risk across 164 stores nationwide.
Sir Philip is believed to have offered to provide about £80m to help plug the pension deficit. But he has already faced accusations that he crashed BHS “into a cliff”, from the chairman of the Business Innovation and Skills Committee, Iain Wright.
Meanwhile, Frank Field, chairman of the Work and Pensions Committee, said Sir Philip had contacted Parliament and “indicated his willingness to come to Parliament to give oral evidence” to a joint session of the Work and Pensions select committee and the Business, Innovation and Skills committee.
No date had yet been set for his appearance. There were suggestions that the committees also wanted to quiz Sir Philip’s wife, Lady Green. But Mr Field said he believed Sir Philip “will be able to answer all of our questions on the operations of BHS’s pension fund”.

Joules unveils plans to float on Aim

Lifestyle clothing brand Joules has announced plans to float on the Aim market of the London Stock Exchange. The admission is expected to take place in the second quarter of 2016.
Founded in 1989 by Tom Joule, the retailer is known for its colour and proprietary prints designed by the company’s in-house design team.

Group revenues increased 50.2% to £116.4 million between 2013 and 2015 driven mainly by new store roll-outs, continued expansion of e-commerce and increased sales within existing wholesale accounts.

Joules has opened an average of 12 new stores each year in the UK over the last three years. It also has a fast growing presence in North America and Germany with international revenues growing by 198% in the period.
In preparation for the admission, Joules has appointed David Stead as senior independent non-executive director and Jill Little as independent non-executive director.
Meanwhile, Neil McCausland will continue as non-executive chairman of the group while Joule will remain as chief brand officer and as an executive director following the float.
Colin Porter, chief executive of Joules, said: “Joules has a rare heritage and a strong presence across clothing and lifestyle product categories. Since the brand’s foundation more than 26 years ago, Joules has enjoyed strong, consistent growth developing into the much-loved fun, family, ‘time-off’ lifestyle brand it is today. We have a clear strategy to develop the brand further and we see real potential for continued growth across channels both in our core UK market and internationally.”

Superdrug confirms head office move

Superdrug has announced plans to move its head office to a new location in central Croydon.
The health and beauty retailer will begin the move to Bedford Park, which is close to East Croydon mainline station, in early 2017. Spread over six floors, the new 50,000 square foot building will support the future growth of the business.

Superdrug moved to its current site in the town’s Beddington Lane in 1979. While its depot operations have since been relocated to new purpose build facilities outside of London, the office still houses all head office functions for stores and the online business.
The company said the new office will create a “collaborative” environment for the 500 staff working there. It has also been designed to promote working practices that support healthy lifestyles, sustainability and the Superdrug’s CSR policies.
Jo Mackie, Superdrug HR director, said: “After almost 40 years based at Beddington Lane this is a huge move for the business. While our current office has served the business well this move gives us the opportunity to create a more agile work space. This will allow us to give our stores and customers the support they need to ensure we continue to grow and continue to offer the best health and beauty experience on the high street and online.”