Category Archives: #uk
London – Reebok is set to expand its presence in China by opening 500 FitHub stores across the country by 2020, as part of its wider strategy to become the leading sportswear brand in the region.
The move sees the footwear and fitness label, held by Adidas Group, go head to head with US rival Nike which is currently viewed as the marker leader in the country. The expansion push sees Reebok team up with Belle International Holdings, one of China’s leading footwear retailers, who will assist the brand in rolling our its FitHub concept stores across the region. At the moment Reebok counts seven FitHub stores in China, with stores in key cities such as Beijing, Hangzhou and Qingdao as the sportswear label aims to open an additional 50 stores in the region this year.
Reebok’s FitHub concept store was designed to compliment the labels new positioning within the sportswear market and features in-store classes, events and fitness experts in store to offer customers tailored advice on products. As the sportswear and fitness market continues to rapidly expand in China, the region has become a key sector for international players like Adidas and Nike to expand in. “For a fitness brand, there is no better country to invest in right now than China,” said Chad Wittman, general manager of Reebok Greater China to China Daily.
“We’ve spent a lot of time and energy putting together a China strategy that meets the specific needs of Chinese consumers in terms of product, messaging and experiences.” In addition to offering Reebok’s global range of apparel, footwear and fitness equipment, the label is set to offer custom-made products targeted specifically at Chinese consumers. At the moment the brand is focusing on three main categories: running, training and classics. The former is set to become a key focus in China for the brand this year, as running has seen a surge in popularity in China over the past few years.
Kuwait-based Kamco Investment Company on Sunday said it has purchased Amazon UK’s largest distribution warehouse for $77 million (AED281m).
The warehouse in Dunfermline, Scotland, has been leased to Amazon UK Services until October 2031. Amazon employs 2,100 staff at the warehouse, which handles 38 percent of the 143 million packages that e-retailer handles per annum.
Kamco said it aims to achieve a targeted cash yield of 6.50 percent per annum and an expected internal rate of return (IRR) of 7 percent per annum during the investment period.
Faisal Sarkhou, chief executive officer, Kamco, said: “This achievement marks yet another step towards reaching our strategic objectives and future vision to enhance our operational performance and expand our real estate investments platform on a regional and international scale, in a way that is beneficial to our shareholders.”
Company chief investment officer Khaled Fouad said the transaction highlights the acquisition of a new category of income-generating assets that are leased to Amazon, in aim of diversifying sources of income.
Kamco’s alternative investment team currently manages more than $250 million in real estate across 11 regional and international properties.
Fitness brand Sweaty Betty has announced plans to open its first European flagship at 1 Carnaby Street in London. The prominent 204 sq m store is located at the south entrance to Carnaby Street and is the result of the brand upscaling from its existing store on Beak Street where it has been a resident since 2002.
The shop is arranged over ground and basement floors allowing the brand to expand and offer its full clothing, accessories and equipment collections, as well as housing a studio space for exclusive wellness events, giving a wider customer experience.
Sweaty Betty joins other recent additions including Urban Decay, G.H. Bass and Estee Edit who have all chosen Carnaby for their first global or UK flagship store.
New York fashion house Coach has chosen the Bullring to open its first standalone store in Birmingham. This store will be the second outside of London for Coach, with the first opening its doors at Victoria Quarter, part of Victoria Gate in Leeds. The 280 sq m space will be located on the upper east level of the mall and will offer the retailer’s full range of bags, footwear, outerwear and accessories.
‘This latest signing reflects the strength of Bullring’s leading retail mix, attracting high-end, aspirational brands to the city. We’re delighted to welcome Coach’s first standalone store in the city, which significantly strengthens the already dynamic retail line-up at the centre,’ says Iain Mitchell, UK commercial director at Hammerson.
Andrew Stanleick, president of Coach Europe, adds: ‘We are delighted to be opening our first standalone store in Birmingham. Bullring has a reputation as the region’s premier retail destination, and so it is a perfect fit for Coach. Following a successful launch in Leeds’ Victoria Quarter last week we are looking forward to bringing Coach’s modern luxury concept and collections to Birmingham.’
The move follows the signing of a new business agreement with Challice Limited.
Mulberry Asia will begin trading in Hong Kong from 3 April. In addition, a subsidiary in China and a branch office in Taiwan are expected to be operational this year once the business secures relevant business licences for the territories.
The Mulberry Group owns 60% of the share capital of Mulberry Asia while Challice holds the remaining 40%. Mulberry Asia will initially operate two stores in China, one in Hong Kong and one in Taiwan. It will also manage regional wholesale operations.
These are supported by the group’s Chinese language mulberry.com site and omnichannel platform throughout the region.
In addition to local marketing initiatives, Mulberry plans to invest around £3 million in additional support in North Asia over the next two years to build brand awareness in the region and capitalise on international tourist flows to the UK, Europe and North America. In the near term, the brand’s store network will be enhanced with a new store in Shanghai as well as relocation of its existing stores in Hong Kong and Beijing.
Thierry Andretta, Mulberry chief executive, said: “We are delighted to launch Mulberry Asia, which enables us to advance our international strategy of developing the brand’s retail and omnichannel model in a key luxury market. We see significant growth opportunity in the region and look forward to taking this major step forward in fulfilling Mulberry’s global potential.”
The head of Tesco’s international arm Trevor Masters has announced his departure from the company as the retailer shrinks its overseas operations.
Masters, chief executive of Tesco International, is set to leave the company at the end of May following a 38-year career with the UK’s largest retailer.
His responsibilities will be split between two senior executives who have played key roles in the retailer’s turnaround.
Tony Hoggett will take over the role as chief executive of Tesco Asia, a role Masters’ held before his promotion to head of Tesco International.
Hoggett has been with Tesco for 27 years and currently holds the role of UK chief operating officer.
Matt Simister will take over from Masters in Europe, taking the role of chief executive of Tesco Central Europe, following a 21-year career at Tesco and moving from his current role of food sourcing director.
This follows a decline in international expansion for the retailer under the new chief executive Dave Lewis, having left South Korea and Turkey completely since he joined in 2014.
“Tony and Matt’s work has been at the heart of Tesco’s turnaround over the last two years and I’m delighted that they will join our executive committee,” Lewis said.
“Their new roles will allow us to focus on the different opportunities presented in Asia and Central Europe.”
A thousand jobs are at risk at the discount fashion retailer Store Twenty One, formerly known as Quality Seconds, which is in talks with its lenders after defaulting on rent payments.
The company struck a rescue deal with creditors last year through a controversial company voluntary arrangement (CVA), but is still struggling as more pain sweeps the high street.
Last week Brantano collapsed into administration, Agent Provocateur was sold in a rescue deal to Mike Ashley and Jones Bootmaker teetered on the brink.
It is believed Store Twenty One is talking to its lender, State Bank of India, to try to prop up the business as tough trading conditions exacerbate its balance sheet woes. It has apparently not yet broken the terms of its CVA, but a quarterly rent date at the end of March could tip it into a precarious position. Landlords outside the arrangement have complained that the store is struggling to meet payments.
The CVA deal last year allowed the retailer to shut 77 shops and persuaded landlords for 17 of its 202 stores to take a 25pc rent cut. Landlords for more than 80 other stores were asked to accept monthly rents rather than quarterly payments.
At the time, the business owed more than £2.6m in tax to HMRC and was being pursued by local authorities over unpaid business rates. Other suppliers were due to receive just 10p in the pound.
The company, which can trace its roots to 1932, was listed on the stock market until 2002 before collapsing into administration in 2006. It was bought out of administration in 2007 by Grabal Alok, an Indian textile manufacturer, which rebranded QS as Store Twenty One. But the financial crisis meant the State Bank of India had to provide financing. It hired AlixPartners last year to restructure its business and if the CVA fails, it is likely the firm will be appointed as administrator.
Store Twenty One’s financial documents reveal it has not made a profit since Grabal Alok took over.
Supermarket giant Tesco will unlock 100,000 of its coin-operated shopping trolleys after it failed to convert them in time for the circulation of the new £1.
The new, lighter and reportedly more secure 12-sided coin enters circulation on Tuesday, beginning a six-month transition period before the old “round pound” ceases to be legal tender.
Meanwhile, supermarkets such as Sainsbury’s, Asda, Morrisons, Lidl and Aldi have said all of their trolleys have been updated ahead of the Tuesday deadline.
Local authorities are already coping with a surge in the number of abandoned trolleys, after a tax on plastic bags came into force that encouraged some shoppers to leave supermarkets with the carts.
Tesco said trolleys across “fewer than 200” of its shops will be unlocked from Tuesday as the store upgrades them to accept the new coin.
A Tesco spokesperson offered assurances that all trolleys would be upgraded by the time the new round pound ceases to be legal tender on 15 October.
“We’re replacing the locks on our trolleys to accept old and new pound coins as well as existing trolley tokens,” they said.
“As an interim measure we will unlock trolleys while this process is completed and we will continue to have colleagues on hand to attend trolleys in our stores, so our customers aren’t affected by the changes.”
It recently emerged that the new £1 coin could pose problems for drivers, with an estimated one in ten parking meters not ready for the change.
Online shopping behemoth Amazon has avoided a $1.5bn (£1.2bn) tax bill after winning a legal dispute in a US tax court.
Judge Albert Lauber rejected a variety of arguments presented by the Internal Revenue Service (IRS), bringing to an end a lengthy court battle.
Ruling in favour of the world’s largest online retailer, he said it was legal for Amazon to have funnelled its European sales through a low-tax Luxembourg sub-company in 2005 and 2006, instead of the US.
Amazon said that if it had lost it could have had been forced to pay a US tax bill as high as $1.5bn and potentially faced “significant” tax liabilities in the years to come.
The company – which according to Forbes is the world’s 12th most valuable brand – made $2.37bn of profit in 2016, four times what it made in the four previous years combined.
Colin Sebastian, an analyst at Baird Equity Research told Reuters the ruling “should shield Amazon from potentially significant tax obligations to the IRS covering years beyond the ones covered in the lawsuit.”
Yet Amazon could still face additional tax bills in Europe if Brussels officials choose to take further action.
Technology retailer Maplin has unveiled a new store concept in Cambridge, allowing customers to fully engage with the latest Smart Home technology. The 290 sq m space at the Beehive Shopping Centre has been designed in distinct departments to showcase the benefits of, and allow interaction with, smart technology for the home.
Design consultancy 20.20’s brief was to position Maplin as the go-to retailer for Smart Home products, attracting and engaging with a new type of customer, whilst retaining the retailer’s loyal customer base.
When analysing the customer research and market data, 20.20 recognised that advice in the dynamic Smart Home technology sector is being provided by individual brands rather than retailers. This insight created an opportunity where Maplin could target an already active customer base and take ownership of the sector by enhancing the expertise of their in-store colleagues, to create a new omni-channel store experience.
With this in mind, the central area of the store was transformed into a ‘Smart Life’ hub, with a distinctive LED lighting feature above it. Products are set up and displayed on tables, ready for customers to try out. By playing and interacting with the different brands and devices customers are able to see the benefits the technology can bring to their lives. Interactive tablets allow customers to browse product information, helping them make decisions at the point of sale, while store colleagues are on hand to offer advice. A new consultation space has been created where customers can further discuss their requirements, and arrange home audits and installation services with store colleagues.
Away from the ‘Smart Life’ area, store adjacencies have been reimagined to improve shoppability – from CCTV to Home Party equipment; to a new Gaming experience; to easier and quicker shopping for Electrical and Digital components.
A new in-store communication system has been designed to enhance the product stories through the use of engaging graphics, digital tablets and POS. The idea here is to connect with customers on an emotional level and engage them according to their shopping behaviour, leading to a seamless and confident purchase.
Hollie Down, 20.20’s design lead, says this radical new concept store will change the way customers shop and make Maplin the destination retailer for Smart Home technology: ‘We have created a place where today’s customers can understand and engage with exciting new products and interact with friendly, knowledgeable store colleagues to discover and purchase the smart devices they need – whether they want a safer home, a more connected space, or just to be at the forefront of technology.
‘Smart products are still relatively new, and many customers haven’t had the chance to try them out. The Cambridge store has been designed to offer a real omni-channel experience, bridging the gap between the physical store and Maplin’s new online offering, which will match the store language.’
Oliver Meakin, CEO of Maplin, says: ‘We chose to work with 20.20 on our Store of the Future because we felt that they would challenge us to stretch our thinking; making us feel uncomfortable in order to move our store proposition forward.
‘We could not have made the leap without their support throughout the journey. Our fantastic, reinvigorated store is trading substantially ahead of expectations – which is down to the hard work of teams at Maplin and 20.20. Everyone involved should feel extremely proud, and we are looking forward to continuing our work with 20.20 as we optimise the proposition for rollout.’
The new store concept has been a fantastic success, with trading significantly outperforming the rest of the chain, and Smart Home sales increases of more than 130 per cent.
Hermès has recently opened a new store in London on the corner of Cadogan Place and Sloane Street. The new store which covers 400 sqm 0n two floors houses every one of Hermès’ 16 métiers.
The interior, which took just under a year to design and build, was presented to the studio as a blank canvas. Upon visiting it for the fist time, Montel says one thing was immediately clear: ‘Here, the star of the shop is not the shop itself, it’s the garden,’ he says gesturing to the store’s leafy view of Cadogan Square Gardens where a bright yellow mimosa tree is currently in full bloom.
The new London store will showcase a range of exclusive products including the re-issued London Bag in four limited-edition colourways. The bag, first created in 1962 features a clasp reminiscent of the epaulettes on the London Police Officers uniforms. In addition, a Yamaha Virago motorbike, which was covered in Hermès leather, is on display for the first time in the UK as an example of le sur-mesure services available at the store.
London – Fashion and homeware retailer Matalan has expanded its international footprint with the opening of two new stores in Malta.
The new stores, located in the centre of Sliema and Fgura, Malta, offer Matalan full range of products, including menswear, womenswear, childrenswear and accessories as well as homeware. The two new stores, which employ 60 members of staff, follow on from Matalan previous stores openings at The Strand in Sliema and Zabbar Road, Fgura. All of Matalan stores in Malta are operated by the retailer’s local franchise partner, the Camilleri Group.
Matalan expands its global footprint with new store openings in Malta
“We are thrilled to be opening our first stores in Malta, trading has been very strong in both of our new stores exceeding our expectations; we have been delighted by the local customers’ reactions to our product ranges and our competitive price position,” commented *Damian Hopkins, International Director at Matalan. *The new stores build on Matalan’s international portfolio, which counts 23 stores.
Matalan opened its first international franchise store in Dubai in 2010 and has developed a strong international presence throughout the Middle East region since then. At the moment Matalan is currently looking to expand in other Eastern Europe countries, following its debut store opening in Armenia in October 2016. Matalan currently operates 227 stores throughout the UK in addition to its e-commerce platform and 25 overseas franchise stores.
There are plans to open more stores in malls across New York state, New Jersey and Connecticut.
The retailer reported “significant growth” in the second year of its US ecommerce business in its last full-year.
It unveiled surging profits against strong comparables despite a “difficult trading environment”.
Pre-tax profits, excluding exceptional items, were up 50% to £17.2m in its full-year to March 26.
Sales rose 12.6% to £184.3m in the 12 months, during which the retailer opened two new stores in Meadowhall, Sheffield, and Birmingham. It now has 56 stores across the UK.
Boss Will Kernan departed last month, following five years at The White Company, to join specialist sports retailer Wiggle, replacing Stefan Barden at the helm.
UK Retail Sales for Amazon Approaching 10 Billion Dollars
March 19, 2017
The United Kingdom is the world’s sixth largest economy, with a retail market estimated at $358 billion for 2016. As one of the world’s oldest and most mature economies, the UK will not grow at a rapid pace, certainly not with Brexit waiting to become a huge spanner in the works of the UK’s future growth prospects.
Nevertheless, it is a multi-hundred-billion-dollar economy that will, at least, grow in low single digits over the next few years. The UK’s e-commerce market has been growing steadily over the years, and should continue to help the economy’s growth engine chug along over the next several years.
Arguably the most famous retailer to invade England, Amazon recorded 6.3 billion pounds ($9.03 billion) in sales from Britain in 2015, an increase of 8 percent over the year before. Amazon’s international sales were $35.418 billion in 2015, which means UK retail has been contributing nearly a fourth of Amazon’s entire overseas sales.
Source: Tesco 2016 Annual Report
On the ground, Tesco, the UK’s largest retailer, reported nearly $43 billion in sales from their home market in 2016, and the company is struggling to keep sales growing. With more than 6.3 billion pounds from the UK to its name, Amazon is slowly inching up in the UK market.
Amazon is a relative weakling compared to big box retailers like Wal-Mart and Tesco, especially when it comes to grocery retail. And that’s fortunate for the likes of Tesco and Sainsbury’s in the UK, and Wal-Mart, Costco, Target et al back in the U.S.
That makes Amazon’s success and ongoing progress in the UK retail segment even more significant.
According to data from Kantar.com, Amazon is not even in the picture as far as the UK’s grocery retail segment is concerned. It is one of Amazon’s known achilles points, and it will take years for their grocery efforts to bear fruit, in a manner of speaking.
On the positive side (for Amazon), the bulk of their growth in the UK is coming from the non-grocery segment, which means they’re eating into that market – consumer electronics, books, digital products, smart devices and so on – much faster. Too fast for the comfort of companies like Tesco, in fact.
And Amazon is not about to stop pushing in the UK retail market. The more Amazon’s gross merchandise value grows in a particular region, the higher Amazon’s investment in fulfillment centers, logistics and other capital expenses in the region. As investments increase in lockstep with the size of Amazon’s business in that region, margins will slowly keep improving, as they’ve already shown in the United States.
The high-end winter clothing retailer and brand, which trades in around 50 countries worldwide through hundreds of concessions and an ecommerce platform, will move into 244 Regent Street – the unit formerly occupied by Armani Exchange.
Sources close to the situation told Retail Week that the deal for Canada Goose to acquire the lease on the Crown Estate-owned unit was “a done deal”.
It is understood that Canada Goose plans to open its doors in the autumn, in time to capitalise on the busy Christmas trading period.
The shop will be Canada Goose’s third standalone store anywhere in the world, having opened its doors in Toronto and New York to much fanfare late last year.
Retail Week understands the business is pursuing a strategy to open a number of other flagships in key cities across the globe over the next few years as part of its rapid growth plans.
Canada Goose’s revenues have rocketed by more than 450% in the past five years alone.
London’s shoppers can expect an experience-focused shopping trip when the store opens later this year.
When it revealed plans to open its first two stores in Canada and the US a year ago, Canada Goose said the shops would “deliver unparalleled service, putting experience at the forefront of every interaction”.
It invested in training to ensure its shop-floor staff became “not only product experts, but true brand ambassadors”.
Canada Goose also boasted that the stores would stock “a full assortment of every seasonal collection with the largest variety of colours and sizes anywhere in the world”.
Retail property consultancy Harper Dennis Hobbs, which advised Canada Goose on its search for a UK store, declined to comment.
Details of the premium parka-maker’s plans to launch a bricks-and-mortar presence in London emerged just a day after it floated on the New York Stock Exchange.
After setting its IPO at $12.78 (£10.35) per share, the price surged 26% to $16.08 (£13) on the first day of trading.
The successful stock market debut valued the company at $1.7bn (£1.37bn).
The business was founded in Toronto by Sam Tick 60 years ago, under the name Metro Sportswear, which initially specialised in woollen vests, raincoats and snowmobile suits.
In the 1970s, Tick’s son-in-law David Reiss – no relation to his namesake who founded British fashion retailer Reiss – joined the company and established the label Snow Goose, which later became Canada Goose, branching out into Arctic and mountain expedition coats.
The label made its on-screen film debut in 2004 when its jackets appeared in two Hollywood blockbusters, The Day After Tomorrow and National Treasure.
Private-equity group Bain Capital bought Canada Goose in 2013 and last year it opened its first two flagship stores, at Yorkdale Shopping Centre in Toronto, in October, and Wooster Street in New York City, in November.
The 10,000 square foot store on Bluewater’s lower Rose Gallery is situated next to the forthcoming Missguided shop, which is set to launch this summer.
Created by an in-house team, the new shop is the first of a new breed of UK concept stores for the fashion brand and includes women’s, men’s, kids and baby collections, as well as GapFit and Gap Body items. The store also features Denim Addict, which allows shoppers to personalise their denim with distressing, studs and patches. In addition, other products can be embroidered with names and initials.
Russell Loveland, portfolio director at Land Securities, co-owner and asset manager of Bluewater, said: “Gap’s decision to open their new concept store for the UK at Bluewater reaffirms its position as Europe’s leading retail and leisure destination. Gap’s store, which brings a number of innovations to the guest experience, is part of our strategy to create a select series of statement stores at Bluewater, where the emphasis is on providing something unique.”
The news follows the recent Plaza enhancement plans released at Bluewater which include the creation of four additional screens for the Showcase Cinema de Lux, as well as three new restaurants and two dedicated leisure spaces. Work has begun on-site and is due for completion by Christmas this year.
Kent was chief executive of real estate portal Propertyfinder until its acquisition by Zoopla, and also spent 15 years with Microsoft including three years as managing director of MSN UK.
She currently holds non-executive director roles at Pendragon, National Accident Helpline Group, Ascential, Coull and No Agent Technologies.
Kent will serve on the Audit and Risk and Nomination Committees.
Alan Parker, chairman of Mothercare, said: “I am delighted to welcome Gillian to Mothercare. She brings a wealth of experience in marketing, strategy and business development with particular emphasis on digital transformation which will add great value to our board.”
Banana Republic appoints new chief executive
16 March 2017 | by The Retail Bulletin
Breitbard will report to Art Peck, president and chief executive of Gap, who will continue to directly oversee Banana Republic until Breitbard joins the company in early May.
Peck said: “Mark brings significant retail leadership experience to Gap Inc., along with deep knowledge of the company and our customer. We know what Banana Republic is capable of, and Mark’s ability to drive transformation and innovation will help revitalize the brand and position it to achieve its long-term potential.”
Breitbard’s was chief executive of The Gymboree Corporation from 2013 until early 2017. From 2010 to 2013, he held leadership positions across Gap North America where he was instrumental in delivering the product-led resurgence of Gap’s North America business.
He also served as chief merchandising and creative officer of Old Navy from 2009 to early 2010. Other previous positions include leadership roles at Levi Strauss and Abercrombie & Fitch.
Due to launch on 22 March, the AND/OR brand has been created in collaboration with LA based denim specialists Calvin Rucker. The retailer will also sell a range of womenswear, shoes, accessories and lingerie to compliment the denim clothing.
The 90 piece range will initially be available online and in 15 shops with items featuring denim washes combined with finishes such as busted-out seams, distressing, bleaching and frayed hems. The different denim styles have been named after places in LA that inspired the collection.
The new collection follows the launch of John Lewis’s first luxury ready-to-wear range, Modern Rarity, last September. The launch helped the retailer’s own-brand womenswear sales to increase by 6.8% in the last financial year.
Jo Bennett, head of womenswear buying at John Lewis, said: “Having built a portfolio of powerhouse own-brand labels over the past few years, we felt there was something missing when it came to serving a younger woman.”
Iain Ewing, John Lewis head of design for womenswear and accessories, added: “This is the first time we have launched a brand across ready-to-wear, accessories, shoes and lingerie. Although the brand starts with denim, you can then add to this to create a fully versatile collection which serves a modern wardrobe.”
The AND/OR denim range will be priced from £85 to £120 while the AND/OR collection will start at £22 for a cotton tee to £250 for a leather jacket.
Trafford Park site sold for £5m
The property was purchased by The Schroders MLIPUT for £4,968,000, reflecting a net initial yield of 6.24 per cent.
A Trafford Park industrial scheme has been sold for just short of £5m as investors – and occupiers – take advantage of the surge in shed values.
B8 Real Estate, acting on behalf of Aviva Investors, have sold a three-unit 64,924 sq ft multi-let industrial estate situated in a prominent location adjacent to the Parkway Circle roundabout in Trafford Park.
The property was purchased by The Schroders MLIPUT for £4,968,000, reflecting a net initial yield of 6.24%.
John Burrows of B8 Real Estate commented, ”We are pleased with the extremely strong level of interest generated, resulting in a host of bids being received for the property.
“The strength of the offers submitted highlights continued investor demand for prime assets against a supply shortage of good quality industrial properties.”
Schroders MLIPUT were represented by Cushman & Wakefield.
In a seprate deal office furnirture firm Woodstock Leabank has agreed the £2.5m sale and lease back of its Stockport premises, raising £2.5m
The sale and leaseback agreement has seen Property Alliance acquire the company’s 41,500 sq ft unit in Bredbury, Stockport for £2.5m. Woodstock Leabank has agreed a 10-year lease with Alliance for the space, paying a rent of £5.50 per sq ft.
Joe O’Malley from Woodstock Leabank added: “This agreement enables us to stay in our property, while minimising risk and unlocking capital which we can use for further investment to support our future growth plans.“
Retail tycoon says deal is part of a cash settlement with Pension Regulator which has now halted its enforcement action
Graham Ruddick and Sarah Butler Tuesday 28 February 2017 18.37 GMT First published on Tuesday 28 February 2017 14.42 GMT
The BHS collapse led to a high-profile parliamentary investigation and calls for Sir Philip Green to be stripped of his knighthood
The BHS collapse led to a high-profile parliamentary investigation and calls for Sir Philip Green to be stripped of his knighthood Photograph: Getty
Sir Philip Green has agreed to hand over £363m in cash to rescue the BHS pension scheme, and settle one of the biggest City rows of recent decades.
The deal with the Pensions Regulator, which is likely to help the billionaire keep his knighthood, follows the controversial collapse of the BHS department store chain last April, which led to the loss of 11,000 jobs and left a pension deficit assessed at £571m.
A high-profile parliamentary investigation into the demise of BHS concluded that the company had been systematically plundered by its owners and described the hole in the pension fund as “the unacceptable face of capitalism”. MPs voted in favour of stripping Green of his knighthood.
The billionaire tycoon owned BHS for 15 years until he sold it to Dominic Chappell, a former bankrupt, for just £1 in March 2015. During his ownership, the Green family and other shareholders collected at least £580m from BHS in dividends, rental payments and interest on loans.
Green said the settlement with the regulator, which is supported by trustees of the BHS pensions scheme, represented a “significantly better outcome” for former BHS staff than the scheme entering the Pension Protection Fund, the government’s pensions lifeboat.
He added: “Once again I would like to apologise to the BHS pensioners for this last year of uncertainty, which was clearly never the intention when the business was sold in March 2015.
“I hope that this solution puts their minds at rest and closes this sorry chapter for them.”
Sir Philip Green is sad and very, very sorry to BHS workers
The pensions deal should calm the reputational storm which has engulfed Green, the self-styled king of the British high street. The 64-year-old fashion tycoon, who also owns Topshop, Wallis, Miss Selfridge and Burton, has been forced to curtail his public appearances since the scandal, including missing Topshop’s London Fashion Week show, where he usually has a front row seat.
Public anger over Green’s apparent reluctance to address the pensions gap focused on the tycoon’s £100m 300-foot superyacht, which was delivered as BHS collapsed, along with a new £46m private jet. He lost his temper on TV when approached in a Greek port by journalists and protesters fixed a “BHS Destroyer” banner to the yacht in harbour.
The pension settlement comes after the Pensions Regulator started legal action against Green last year in an attempt to force him to contribute cash to the pension scheme. This enforcement action has now been halted against Green, but legal proceedings are continuing against Chappell and his company, Retail Acquisitions, which acquired BHS from Green.
Lesley Titcomb, the chief executive of the Pensions Regulator, said: “The agreement we have reached with Sir Philip Green represents a strong outcome for the members of the BHS pension schemes. It takes account of the interests of both pensioners and the PPF, and brings a welcome level of certainty to present and future pensioners.”
Frank Field, the Labour MP who co-led the parliamentary investigation and led the calls for Green to make good the pension scheme, welcomed the deal. “I very much welcome this out-of-court settlement which is an important milestone in gaining the justice for BHS pensioners and former workers that we have been pushing for since beginning our inquiry into the downfall of BHS,” Field said.
However, BHS workers are still likely to suffer cuts to their pension benefits. The Pensions Regulator estimates that workers will on average receive around 88% of the value of their original benefits in a new pension scheme created by the settlement. This is a better outcome than if the BHS pension scheme had entered the Pension Protection Fund, a lifeboat for failed pension schemes, where workers would have received an estimated 75% to 79%.
Grant Atterbury, a former BHS worker, said the deal was “literally the least Green could do”. Atterbury is still unemployed and living on benefits after losing his job at the BHS in Royal Tunbridge Wells, Kent, last August.
“This deal is great news for pensioners but it doesn’t improve my lot,” he said. “It is literally the least Green could do. He filled his pockets with a great deal more than he’s putting back into the pension pot. He has filled the black hole in the pension but there are still a lot of black holes including one on our high street. My opinion of him is as low as it was.”
John Ralfe, a pensions expert, added: “This is not Sir Philip Green as the all-conquering hero. This is Sir Philip making the best of a bad job.”
Green initially pledged to “sort” the problems facing the BHS pension scheme last June when he was questioned by MPs.
John Hannett, the general secretary of trade union Usdaw, said: “It is difficult to understand why this saga has been allowed to continue and why we have had to campaign for so long to get justice for our members.”
The Pensions Regulator said measuring the BHS deficit as £571m was not appropriate when working on a cash settlement because this figure is based on what the retirement scheme would have to pay an insurance company to guarantee its liabilities – which is expensive.
Green has already paid over the £343m into an escrow account as part of the settlement. An additional £20m will be spent on expenses and implementing the changes to the BHS pension scheme.
The deal will see the creation of a new pension scheme, which will be funded by Green’s cash injection. BHS workers will have the option of moving their pension into the new scheme, receiving a lump-sum payment, or remaining in the existing pension scheme, which will enter the PPF and see a 10% cut to existing benefits.
As much as £15m could be returned to Green if 90% of the eligible members decide to accept the lump sum. About 9,000 of the remaining 19,000 former staff in BHS’s two pension schemes will be offered the lump-sum payments.
Trustees sent an letter to pension members on Tuesday. The members will all be contacted within the next three months with a personal offer and they will have three months to decide what to do with their pension money.
The new scheme will be run via a “special purpose vehicle” and will not be attached to a sponsoring company, which pensions experts claim is risky. It is the first time such a vehicle has been cleared by regulators in the UK and £100m was added to the settlement to reduce fears about the scheme falling back into the PPF lifeboat in future.
Chris Martin, the chair of the BHS pension fund trustees, said the cash injection from Green put the new scheme on a “stable footing”.
He added: “The trustees have carefully considered all aspects of the deal and we are confident that this is a robust scheme that delivers improved and sustainable benefits.
“We are now in a position to confirm that members will be offered benefit improvements, enhanced flexibility, and just as importantly, long-term sustainability for their benefits.”
Fashion sales rose by 1.4% as trade in the category was boosted by the popularity of the retailer’s own brand range Modern Rarity. In addition, sales of beauty, wellbeing and leisure products were up 11.2% as customers bought gifts for Valentine’s Day.
Electrical and home technology sales were also up, increasing by 0.4%. Growth was driven by sales of communications technology products which increased by 6%.
Sales within the home category declined by 1.5% year-on-year despite an 8.5% uplift in sales of accessories and gifts.
This week John Lewis is launching US furniture and home accessories brand West Elm in its Southampton and Welwyn shops.
The fall marks an improvement for the Walmart owned company on the previous quarter when like-for-like sales dropped by 5.8%.
Walmart president and chief executive Doug McMillon said Asda had faced challenges in the UK market in the past year which it is addressing “with urgency”.
Sean Clarke, Asda president and chief executive, said the company had welcomed over 140,000 customers back to Asda in the quarter.
He added: “We are putting customers first and have sharpened our prices, improved our ranges and availability, all with friendly service. While we have a lot to do, it is great to see our colleagues, who really make the difference, engaged in this change in doing what’s right for customers.”
LONDON, Feb 20 (Reuters) – British fashion retailer Reiss named former Next (Frankfurt: 779551 – news) executive Christos Angelides as its new chief executive on Monday in a move aimed at allowing founder and chairman David Reiss to scale back his responsibilities.
Reiss, which is majority owned by private equity firm Warburg Pincus, said the appointment was part of a planned succession process. It ends speculation that Angelides might join Marks & Spencer (Frankfurt: 534418 – news) to lead its struggling clothing division.
Angelides, who spent 28 years at Next with 14 as group product director, had a brief stint as president of Abercrombie and Fitch based in the United States.
He will start his new role at the end of March and will resign as a non-executive director of rival French Connection (LSE: FCCN.L – news) on Feb. 28.
“I am delighted that Christos has agreed to lead Reiss … and look forward to working closely with him in order to ensure an orderly succession,” said David Reiss, who will remain chairman but give up the CEO role.
Amazon to launch own fashion brand, compete with UK high street
London – Amazon has firmly set its sights on world domination on all aspects of ecommerce and is thought to be investing in its own fashion label.
The company has reported poached senior design and buying experts from Marks & Spencer and Primark, according to Drapers, as it starts to build its own brand in the UK.
While Amazon already sells many fashion brands, including third party suppliers in the UK, it has yet to launch a brand that can compete with the stalwarts of the British high streets, like M&S and Next and online giants Asos and Boohoo.
Richard Lim, chief executive of Retail Economics told the Evening Standard the online giant has the power to ‘stir things up’. He said: ‘Amazon is a very cash rich business and if they want to launch into a sector, they won’t do things by half.’
Amazon has added over 350 new brands across its European sites
Amazon said it sold more than 60m fashion items after adding 350 new brands across its European websites earlier this month, making it one of the fastest growing categories.
It announced profits of 749 million dollars for the final quarter of 2016, a 55 percent increase on the previous quarter. After years of prioritising growth over profits, this was its seventh consecutive profitable quarter.
In 2015 Amazon Amazon opened a photography studio in Shoreditch, a 46,000 square-foot venue with 22 photography bays. The company said it is one of the largest of its kind in Europe and will help it create more than 500,000 images of clothes to its sites every year.
“Our aim is to make Amazon the best place to buy fashion online,” said Sergio Bucher, VP of Amazon Fashion EU, in a statement. “The opening of our new fashion studio, in the heart of one of the leading fashion capitals of the world, illustrates our ambitions.”
Retailers, restaurants and hotels among a record 360 firms named for shortchanging staff by almost £1m
Sarah Butler and Robert Booth Wednesday 15 February 2017 19.48 GMT
Debenhams was accused of failing to pay almost £135,000 to just under 12,000 workers.
Debenhams was accused of failing to pay almost £135,000 to just under 12,000 workers. Photograph: Ki Price/Reuters
The government has named and shamed a record 360 firms for underpaying their staff, with the list of offenders topped by Debenhams after nearly 12,000 of the department store’s workers were short-changed.
The businesses, including large numbers of hair salons, hotels, care homes and retailers, failed to pay either the national minimum wage or the national living wage to more than 15,500 workers, according to the list published by the Department for Business, Energy and Industrial Strategy.
The number of offenders surged as it includes the first group named for failing to pay the national living wage of £7.20 an hour for those over 25, which was introduced last year. The businesses were forced to pay back £995,233 to workers as well as penalties totalling £800,000 to HMRC.
Excuses for underpaying workers included using tips to top up pay, docking workers’ wages to pay for their Christmas party and making staff pay for their own uniforms out of their salary.
More than 1,000 firms have now been publicly shamed for underpaying their staff since the name and shame system was introduced in 2013. They have underpaid their staff by a total of more than £4.5m. Fines of more than £2m have been levied in addition to firms being forced to make good the wages owed.
Debenhams was named as the most prolific offender since the naming and shaming system came into force in 2013. The company was hit with a £63,000 fine and forced to pay back nearly £135,000 to nearly 12,000 workers. The company said it had underpaid staff by an average £10 each in 2015 because of a “technical error in its payroll calculations”.
A spokesman for the department store said: “As a responsible employer Debenhams is committed to the national minimum wage, and as soon as the error was identified by a routine HMRC audit last year we reimbursed all those affected. We have apologised to all our colleagues affected and have taken steps to ensure it cannot happen again.”
The error by Debenhams is embarrassing, but many businesses were found to have underpaid individual staff members by thousands of pounds.
Tasman Ltd, a Harley Street property company that lets space to doctors and dental practices, was the worst offender. It was found to have underpaid a housekeeper by more than £11,000 over a number of years.
Hospitality businesses, including restaurants and hotels, feature in the list most often for underpaying their staff, with 84 employers underpaying 563 workers in total.
Lorenzo Berni was found to have underpaid 29 workers by more than £53,000 at his upmarket Knightsbridge restaurant Osteria San Lorenzo. Only last year Berni’s Wimbledon eatery, which is a favourite haunt of tennis stars including Boris Becker, was forced to pay back almost £100,000 to 30 other employees. The company said the problem had occurred while it was dealing with family crises.
Contacted at his luxury Knightsbridge restaurant this week, Berni declined to comment. The restaurateur answered the phone but refused to respond and passed the phone to a colleague, who said only: “We have nothing to say.”
Those working in retail and the social care sector were next most likely to be underpaid.
Kate Ashley, a director of Pembrokeshire Care, a home care company in rural west Wales that underpaid 154 carers by £55,000, said the company had miscalculated the amount of travel time their employees should be paid to get to their mostly elderly clients
“We thought we were paying the right amount and the HMRC found that we weren’t,” she said. “We have put in place a new system of calculation that the HMRC has said it is happy with. The social care sector is under tremendous pressure and we are on tight margins, which are getting tighter all the time.”
The TUC general secretary, Frances O’Grady, called on the government to take tougher action on “serious offenders” who flouted the law, including prosecutions and higher fines.
“Minimum wage dodgers must have nowhere to hide. We need to see strong unions in every workplace to stop these abuses from happening,” O’Grady said.
The Unite union also called for tougher action against unscrupulous bosses of firms that underpay, including a new “wage theft” offence, as exists in the US, punishable with a jail sentence.
Unite’s assistant general secretary Steve Turner said naming and shaming was welcome, but bigger deterrents were needed. Turner said it was “pathetic” that only 13 businesses had been prosecuted for underpayment since 2007. “In America,” he said, “bad bosses are jailed and heavily fined for ‘wage theft’, which is what this is, exploiting workers in such a shameful fashion.”
The business minister Margot James said that by naming and shaming the government was “sending a clear message to employers that minimum wage abuses will not go unpunished”.
“Every worker in the UK is entitled to at least the national minimum or living wage and this government will ensure they get it,” James said.
Data: Top 50 retailers by sales during 2015/16 financial year
The top 50 retailers by sales during the 2015/16 financial year
Within the top 10, Aldi has solidified its position and climbed into ninth place.
The discounter’s continued strong growth means it is expected to overtake both the Co-op and Boots in the next edition of this ranking. Read our analysis of the data here.
Aldi’s progress shunted Dixons Carphone into 10th place, while the Co-op and Boots switched positions.
BHS’s collapse last year means it has been removed from this list, while tough trading conditions at Game saw it drop out of the top 50. Selfridges was also just outside the top 50 this year.
These three spots have been taken up by new entrants The Range, Asos and Inditex.
Asos’s profile is arguably higher than its 49th position might suggest, but it is easy to forget that it generates such a large proportion of its turnover internationally and it has taken a while for its domestic business to reach the required threshold.
While H&M has had a long-standing presence in this ranking, fellow fast fashion giant Inditex cracked the top 50 for the first time.
The Spanish retailer trades through Zara, Zara Home, Massimo Dutti, Pull & Bear and Stradivarius in the UK, but much of its growth has been driven by Zara, which accounts for just over 90% of its UK sales.
Retailers that have made great leaps over the year include Ocado, H&M and New Look, although the latter is unlikely to maintain its upward trend in next year’s ranking given its poor domestic performance in 2016/17 to date.
In contrast to last year, general merchandise discounters such as Poundland, B&M Bargains and Home Bargains had a more muted performance.
Home Retail Group makes its last appearance in the table, with the Sainsbury’s acquisition of Argos set to help solidify its position as the second largest retailer in the UK. Despite this, Tesco remains comfortably ahead in first place.
Laura Ashley suffered a 29 per cent drop in pre-tax profits in the final six months of 2016, amid falling sales and rising costs.
The homeware and fashion chain warned it expects its full-year profits to come in below estimates, prompting the group’s shares to fall by 11 per cent this morning.
In the last six months, Laura Ashley’s sales fell by 3.5 per cent on a year ago, as the group failed to attract shoppers over the crucial Christmas period.
Falling profits: Laura Ashley suffered a 29 per cent drop in pre-tax profits in the final six months of 2016
Falling profits: Laura Ashley suffered a 29 per cent drop in pre-tax profits in the final six months of 2016
Tan Sri Dr Koo Kay Peng, Laura Ashley’s chairman, said: ‘Trading conditions have been demanding during the first six months of the year.
‘The board have reviewed the first half results and forecasts for the remainder of the year to 30 June 2017 and, given the continued market challenges, feels that net pre-tax profit for the year will fall below market expectations.’
Laura Ashley is still struggling to appeal to shoppers this year, with like-for-like sales in the six weeks to February 11 down 0.6 per cent.
The group said its first-half profits were also knocked by rising costs after the pound’s plunge in value since the EU referendum, as well as the new national living wage, which contributed to a 6 per cent rise in operating costs to £52.3million.
Laura Ashley’s chief finance officer, Sean Anglim told the Press Association the group’s festive performance was hit as it had one less week of clearance sales compared with a year earlier, which knocked trading for big-ticket items like furniture.
Sales: In the last six months, Laura Ashley’s sales fell by 3.5 per cent on a year ago
Sales: In the last six months, Laura Ashley’s sales fell by 3.5 per cent on a year ago
He said the firm remained optimistic despite the profit warning, having recently advanced further into two major overseas markets by signing up a new franchise partner in India and launching online in China for the first time late last year.
The group said like-for-like furniture sales dropped 8 per cent in the first half, while decorating sales fell 6.4 per cent and fashion down 3.2 per cent. Online sales grew by 2.1 per cent on a like-for-like basis.
Shares in Laura Ashley are down 5.33 per cent to 17.75p.
Ralph Lauren names new executives to new positions , 2 weeks after CEO steps down
Ralph Lauren Corp. RL, -0.77% named on Thursday Jonathan Bottomley to the newly created position of chief marketing officer, effective April 3. The fashion apparel and accessories company said Bottomley, who was most recently Chief Strategy Officer at Vice Media, will lead the global marketing team and be responsible for Ralph Lauren’s brand voice. The company also named Tom Mendenhall to the newly created role of brand president, Men’s Polo, Purple Label and Double RL, effective March 29. Mendenhall was most recently chief operating officer at Tom Ford International. All men’s brand functions will report into Mendenhall, including design and merchandising. The moves follow Stefan Larsson stepping down as chief executive officer on Feb. 3 after just 15 months in the position, after Larsson and Chief Creative Officer Ralph Lauren couldn’t agree about how to evolve the creative and consumer-facing parts of the business. The stock, which tacked on 0.3% in morning trade, has tumbled 29% over the past three months, while the S&P 500 SPX, -0.30% has gained 7.7%.
Waitrose has been named the UK’s top supermarket in a new Which? Magazine survey of more than 7,000 shoppers.
Shoppers were asked to rate stores based on drivers such as store appearance, ease of finding products and overall quality of fresh products.
When it came to the online ranking, shoppers were asked about relevance of substitutions for products, value for money and delivery driver’s service.
Waitrose finished just ahead of Marks and Spencer, with both earning plaudits for their store appearance and quality of own-label and fresh products.
“With concerns over rising prices the competition among supermarkets is fiercer than ever,” said Richard Headland, Which? magazine editor.
“While value for money remains a top priority, in-store appearance and the availability of quality and fresh products can also go a long way to satisfying shoppers’ needs.”
Aldi and Lidl share third place and are the only two supermarkets in the survey to be awarded top marks for value for money
Morrisons is the biggest climber from last year’s survey, moving up from eighth to fifth
Asda came last below Tesco (8th) and Sainsbury’s (7th), who were ranked lower due to many of customers’ favourite products not being in stock, difficulty finding items and low scores on value for money
In the online category, Iceland Online came top for the second consecutive year, with customers particularly happy with convenient delivery slots and friendly drivers
Ocado took second spot ahead of other online competitors including Morrisons, Tesco, Asda, Sainsbury’s and Waitrose
Despite finishing runners up in the in-store category, M&S had reason to cheer as its Simply Food convenience stores came top in the first ever Which? convenience store satisfaction survey
Tesco accused of overcharging customers
Tesco is to check the prices of all items in every store after an investigation found customers were being short-changed on promotions.
An undercover reporter for BBC Inside Out was overcharged on multi-buy offers at two-thirds of stores visited.
The reporter was charged more than expected in 33 out of 50 stores visited because promotions marked on the shelves were out of date and no longer valid at the tills.
Multi-buy deals were still being advertised on the shelves months after they had expired in some cases.
Martin Fisher from the Chartered Trading Standards Institute said the errors could break the law by falling foul of the The Consumer Protection from Unfair Trading Regulations 2008, according to the BBC.
The supermarket giant will now re-evaluate the price of every item at its 3,500-plus stores across the UK.
A spokeswoman said: “We take great care to deliver clear and accurate price labels for our customers so they can make informed decisions on the products they buy.
“We are disappointed that errors occurred and will be working with the stores involved to reinforce our responsibilities to our customers.”
The full investigation will be broadcast in most English regions at 7.30pm on BBC on Monday.
In the six months to 27 November, retail revenue was up 15.8% as ecommerce sales rose by 30.3% and store sales grew by 11.2%.
The company also saw an uplift in wholesale revenue which climbed by 17.1%. International revenue increased by 39.3% and now represents 10.6% of group revenue.
Meanwhile, underlying pre-tax profit rose by 19.9% to £7.5 million.
Colin Porter, Joules chief executive, said: “Joules has continued to perform well during the first half of the financial year with strong growth delivered across the brand’s distribution channels and target markets. This significant progress reflects the quality and design of our products and the growing demand for the Joules brand, both in the UK and internationally.”
The company said group trading over the Christmas period and in the second half of the year to date has been strong and in line with expectations.
Dreams rolls out next generation store format
Dreams is rolling out a new store format, which it has piloted in Warrington. The aim of these stores is to offer a softer, more welcoming store environment whilst ensuring Dreams customers choose the right mattress for the best night’s sleep, and to showcase its on bedroom furniture and bed frames. The retailer has been working with Design4Retail for the last two years on the new format.
The store design takes customers on a step by step journey, making it as simple as possible for them to understand the Dreams offer and the ease with which they can make intuitive and easy buying decisions.
Storytelling is an integral part of the store, with brand and product messaging used to highlight product ranges and reaffirm the brands as having a UK-based factory where product is made. A friendly and informative graphic style is combined with more lifestyle imagery, illustrations and added tone of voice.
Design4Retail has utilised the previously used ‘Comfort by Colour’ mattress selector and replaced it with stronger creative, simplying the buying process and adding in large panels with a step by step guide and mattress examples.
To break up product groups and aid navigation around the store, the design team added in textured fret cut screens which are flexible enough to move around the store without blocking the view. Colour coding and imagery helps with product selection, while soft wooden frames around the store help tie everything together.
Upstairs features lifestyle imagery and highlighted bed frame features on ‘get the look’ type imagery. The same framing and fret cut paneling has been used to create a compelling back drop to products.
The new format will roll out to other Dreams stores over the coming months.
Tesco announces job losses in shake-up of distribution centre network
The proposed changes will reduce the number of Tesco distribution centres from 25 to 23. This will include the closure of the Welham Green centre and moving its grocery operations to Tesco’s Reading centre. In addition, the supermarket will be bringing the majority of general merchandising into one distribution centre at Middlesbrough which will result in the closure of the Chesterfield centre.
Tesco has also announced plans to withdraw from a Daventry hanging garments shared distribution centre which is currently operated by third party DHL. As a result, the centre’s clothing operations will move to Tesco’s Daventry distribution centre. It also plans to bring all warehouse operations currently carried out by DHL and Wincanton in house.
The 500 new jobs created elsewhere in the distribution centre network will include roles in Reading and Middlesbrough as well as the creation of staff support roles in the majority of Tesco’s centres.
Matt Davies, Tesco UK & ROI chief executive, said: “As the needs of our customers change, it’s vital we transform our business for the future.
“As part of this we are proposing to close two of our distribution centres in the UK. These changes will help to simplify our distribution operations so we can continue to serve our customers better.
“Our priority throughout this process has been our colleagues and we will continue to do all we can to support them at this time.”
Morrisons hails best Christmas performance in seven years
In the nine weeks to 1 January, total sales excluding fuel increased by 2% despite the continuing impact of store closures.
Like-for-like transaction growth was strong, up 5.2% year-on-year during the period.
The supermarket said the growth was a result of an improved shopping experience for customers both in its stores and online. During the period, Morrisons.com achieved its biggest ever week for sales.
David Potts, Morrisons chief executive, said: “This Christmas we made further improvements to the customer shopping trip. We stocked more of what our customers wanted to buy, more tills were open more often, and product availability improved as over half of sales went through our new ordering system. Both like-for-like and total sales grew, which was very encouraging.
“Eighteen months ago, I said that this would be a colleague-led turnaround, and our improving performance is entirely due to the continuing hard work of the Morrisons team of food makers and shopkeepers. I would like to thank all colleagues for making Christmas and New Year extra special for our customers.”
Morrisons said its new ‘Best’ range is proving very popular, with over half of customer baskets including at least one ‘Best’ item. The supermarket launched over 100 new ‘Best’ products for Christmas shoppers in addition to the first 470 products launched last autumn.
The supermarket now expects its 2016/17 underlying pre-tax profit to be ahead of consensus and in the range of £330 million to £340 million.
The Adidas Originals flagship store in London has undergone a revamp with a localised twist to make it uniquely relevant to London. StudioXAG designed and implemented two long-term dwell areas within the store, adding authentic elements of familiarity to the store as well as encouraging the local consumer to spend more time in the store.
Taking reference from the iconic housing estates of the city, StudioXAG brought the outside in with reclaimed chimney pots used as planters and even a piece of the London streets in the form of the reclaimed pavement light repurposed as a coffee table.
Sourced mid-century British furniture, phone charging facilities and local magazines offer an inviting retreat from the busy streets of Soho.
Other subtle nods to London include the rubber flooring from the Victoria Line tube used as tabletops outside the fitting rooms, as well as cushions made from the London Underground moquette fabric. The team even had a blue plaque especially produced for the store, referencing the English Heritage plaques commonly found across the city.
Committee proposes ‘nuclear deterrent’ to stop companies trying to avoid responsibilities to pension schemes
Sir Philip Green ‘would have sorted’ the BHS pension scheme long ago if he had faced a £1bn fine, said Frank Field MP.
Sir Philip Green ‘would have sorted’ the BHS pension scheme long ago if he had faced a £1bn fine, said Frank Field MP. Photograph: Ian West/PA
Sir Philip Green may have to pay £1bn to resolve the problems facing the BHS pension scheme under proposals tabled by MPs.
The work and pensions committee, which is chaired by Labour MP Frank Field, has called for the government to introduce a “nuclear deterrent” to stop companies or individuals trying to avoid their responsibilities to pension schemes.
This deterrent would be a fine from The Pensions Regulator (TPR) worth three times the amount it believes a company or individual should contribute towards filling the deficit in a pension scheme. Given that the regulator is understood to be seeking £350m from Green for the BHS pensions scheme, this means it could threaten the billionaire tycoon with a charge of about £1bn.
The deterrent is part of a package of measures proposed by the parliamentary committee to avoid another BHS scandal.
BHS collapsed into administration in April, leading to the loss of 11,000 jobs and leaving a £571m deficit. The regulator has started legal proceedings against Green and Dominic Chappell, the former owners of BHS, in an attempt to fill the deficit. They collected millions of pounds from the retailer.
Field said: “It is difficult to imagine [TPR] would still be having to negotiate with Sir Philip Green if he had been facing a bill of £1bn, rather than £350m. He would have sorted the pension scheme long ago.”
As well as threatening punitive fines, the MPs said TPR must become a “nimbler, more proactive regulator”. They said the regulator must consider recovery plans for pension schemes in deficit that last more than 10 years as “exceptional” and that it should approve every major corporate transaction.
These powers would have allowed the regulator to block a 23-year plan drawn up by Green for the BHS pension scheme while he owned it in 2012, and stop the sale of the retailer to Chappell, a three-time bankrupt.
In addition, the committee wants pension trustees to have the power to negotiate a restructuring of struggling schemes that could result in better outcomes than entering the Pension Protection Fund, where benefits are cut by at least 10%. The PPF, a government-backed lifeboat scheme, is funded by a levy on all defined benefit pension schemes. The MPs say that good corporate behaviour could be rewarded in future by paying less into the PPF.
Field added: “The measures we set out in this report are intended to reduce the chance of another scheme going down the BHS route. We hope and expect that we will never again see a company like BHS be able to come up with a 23-year recovery plan for its pension fund, and certainly not that it would take the regulator two years to really begin to do anything about it.
“It is further inconceivable that Sir Philip Green’s deal to dispose of BHS and its giant pension deficit for £1 to a dismally unqualified man, with no plan for the pension schemes and no means of financing one, would have evaded or passed any mandatory clearance scheme.”
Aside from the BHS scandal, the pension problems facing British companies are stark. By the standard measure used by the PPF, 4,272 defined benefit schemes are in deficit and the size of the black hole is £195bn. There are 5,794 defined benefit pension schemes in the UK.
In response to the report, a spokesperson for the Department for Work and Pensions said: “The majority of employers are managing their pension schemes responsibly but a few recent examples have raised some important questions. In the coming months we’ll be publishing a green paper on pension funding and as part of this we’ll be looking at powers of [TPR].”
Lesley Titcomb, chief executive of TPR, said: “We welcome the committee’s report which recognises the importance of robust and proportionate regulation for workplace defined benefit pension schemes and of ensuring that workplace pension savers and the Pension Protection Fund are well-protected. We note its recommendations and will consider them carefully.
“We continue to discuss options with DWP for the legislative and regulatory framework for workplace pensions, and how this might be improved, ahead of the green paper, which will consider the future of pension funding, the regulatory framework and TPR’s powers.”
Department store chain House of Fraser has opened its first standalone shop in China as it begins to build its brand in the Asian powerhouse.
House of Fraser warned in September over high street conditions in the UK as it revealed “very challenging” trading
House of Fraser warned in September over high street conditions in the UK as it revealed “very challenging” trading
The retailer, owned by Chinese conglomerate Sanpower Group, will set up shop in Sanpower Plaza in the commercial zone of Nanjing, capital of Jiangsu province.
The store will span six floors, trade over 425,000 sq ft of retail space and see the introduction of brands such as Cambridge Satchel Company, Peter Werth and Radley into the Chinese market for the first time.
In September the firm warned over high street conditions in the UK as it revealed sales woes amid “very challenging” trading.
House of Fraser chairman Frank Slevin said at the time that the UK retail sector was facing significant change in “structural dynamics as consumers shopping habits and delivery expectations continue to evolve”.
The chain will look to benefit from the strong demand for UK brands among Chinese consumers.
Mr Slevin said: “The opening of the store in Nanjing is a strong way to finish 2016. The store has focused on bringing international brands and a premium shopping experience to China.
“We are confident that our first store will clearly demonstrate the unique status that House of Fraser can achieve in the market, and will be a standout platform for our brand partners.”
Furla has recently opened a new store in London at 71 Brompton Road. This follows the success of its standalone Regent Street store, and continues to strengthen the brand’s presence in the UK.
Located in the heart of the high-end shopping district of Knightsbridge, the new store is set across two floors, occupying 280 sq m. It houses the brand’s women’s bag and leather accessory offering, with its men’s collection on the lower ground floor alongside two areas dedicated entirely to footwear.
To mark the opening, Furla has launched a new custom version of its star Metropolis bag with a print featuring a London Bridge motif, which is exclusive to the store. Each bag is a limited-edition model, accompanied by an “Exclusive for Brompton Road London” tag.
Furla will also offer the option to match the bag with a bright blue fur pompon, adding an extra personalised touch.
Former investment banker, who took on role six years ago, will remain in post until his successor is found
Robert Swannell has overseen a tricky period during his time as chair of M&S. Photograph: AFP/Getty Images
The chairman of Marks & Spencer is to retire next year after six years in the role.
Robert Swannell, a former investment banker, has overseen a tricky time at the high street stalwart, appointing long-term staffer Steve Rowe to take over as chief executive a year ago from former boss Marc Bolland.
Swannell, 66, who was previously an adviser to M&S helping to fend off a bid attempt by the Topshop boss, Sir Philip Green, during his 30 years in banking at Schroders and Citigroup, joined the company’s board as a non-executive in late 2010. He became chairman a few months later, taking over from Sir Stuart Rose.
His departure is another step in the changing of the guard since Bolland stepped down in the spring.
Rowe has since pulled back on some of Bolland’s key initiatives, including international expansion.
Swannell said: “A year ago we chose Steve Rowe as our chief executive. Steve completed a thorough analysis of the business and developed a detailed plan to build a simpler and more relevant M&S.
“This plan is now under way and I feel that it is the right time for the business to look for a new chairman. It is a real privilege to chair this iconic company and I will continue to do so until my successor is in place.”
M&S’s senior independent director, Vindi Banga, will now lead the process to identify and appoint the next M&S chairman.
Delivery workers at Staffordshire hub to stage three-day strike next week in dispute over holiday pay
The distribution centre is run by logistics firm Wincanton and Argos urged both sides to ‘keep talking’.
The distribution centre is run by logistics firm Wincanton and Argos urged both sides to ‘keep talking’. Photograph: Jonathan Brady/PA
Argos shoppers could face delays to deliveries of their Christmas presents after drivers at its main distribution centre in Staffordshire voted to strike for three days from 20 December.
It comes after Post Office workers voted to stage five days of strikes in the run-up to Christmas in a long-running dispute over jobs and pensions.
The 35 Argos drivers, who all work on big lorries taking goods from the catalogue shop’s central warehouse run by logistics firm Wincanton to regional centres from where they are sent out to stores, are protesting over holiday pay.
Unite, the union acting for the workers based at the depot near Burton upon Trent, said each driver was owed about £700 in holiday pay dating back at least two years. The dispute comes after it was ruled that overtime and additional shift payments should be taken into account when assessing holiday pay.
Unite said a strike would cause “havoc and mayhem” to deliveries in the crucial days running up to Christmas. Its regional officer, Rick Coyle, said the action was a last resort after years of talks.
“The drivers have patiently tried to resolve this matter for over two years. Now they would like the money they are owed in time for Christmas, which is not unreasonable.
“It is very difficult to understand why Wincanton has allowed this saga to get out of hand because this strike by our members will cause havoc and mayhem to deliveries to Argos shops in the run-up to Christmas,” he said.
“There will be a lot of very unhappy Argos customers, if they don’t receive the iPhones, TVs and white goods that they have ordered as presents for relatives this Christmas.”
Argos, which was taken over by supermarket group Sainsbury’s earlier this year, said: “We would encourage both sides to keep talking with the aim of coming to a swift resolution. We also have contingency plans in place and can reassure customers we’re working hard to ensure this will not impact our deliveries this Christmas.”
The Burton on Trent facility handles nearly 2m items a week in the run-up to Christmas, with about 120 trailer loads of goods a day heading out to regional distribution centres and on to Argos’s 800-plus stores.
The action in Staffordshire comes as drivers working at another Argos centre operated by Wincanton in Basildon, Essex, vote on whether to take industrial action over a disciplinary system.
Premium coffee brand Nespresso has opened two new boutiques in John Lewis Kingston and Peter Jones in Sloane Square. Now for the first time, John Lewis customers will be able to taste, purchase and learn more about the Grand Cru coffees at the two new boutiques. These openings represent a pilot for Nespresso with the possibility for future boutiques in John Lewis stores across the UK.
‘We are proud to have been partners with John Lewis for many years. This announcement represents the next stage of our partnership, as we bring our coffee expertise to customers at John Lewis in Kingston and Sloane Square,’ says Francisco Nogueira, Nespresso UK & Ireland managing director. ‘To date, John Lewis customers have been able to purchase machines in-store but have not been able to purchase, taste or learn about our 24 Grands Crus. This is all about to change. John Lewis customers will now have the opportunity to enjoy the full Nespresso experience similar to that experienced in our stand-alone boutiques.
Marks & Spencer (M&S)’s department stores in the Gulf will be unaffected by the British retail giant’s decision to close down more than 80 shops in the UK and around the world.
The company announced on Tuesday that it would shut 30 outlets in the UK, and 53 overseas, including most of its fully owned stores. Altogether, it will shutter operations in 10 international markets, including France and China, at a cost of up to 200 million pounds over the next year.
In the Gulf, M&S outlets are operated by Dubai’s Al Futtaim, and the retailer said that that relationship would continue.
“We are fully committed to our franchise partnership with Al Futtaim and our franchise stores in the Gulf operated by Al-Futtaim are unaffected by today’s proposals,” an M&S UK spokesperson told Arabian Business in response to emailed questions. “Going forward we propose to operate with fewer wholly-owned markets and have a greater focus on our established joint ventures and franchise partnerships.
“Customers can continue to shop with us at our stores in the region.”
Al Futtaim has held the regional franchise rights for M&S since 1998, and the franchise partnership boasts 26 stores located in Bahrain, Egypt, Kuwait, Lebanon, Oman, Qatar and the UAE, according to the company’s website.
M&S, whose shares have fallen 22 percent so far this year, reported an 18.6 percent slump in first-half profit and another fall in quarterly clothing sales.
Steve Rowe, a 26-year company veteran, took over as CEO in April and has the tough task of reviving a 132-year-old British institution that has fallen out of fashion over the last decade.
“These are tough decisions, but vital to building a future M&S that is simpler, more relevant, multi-channel and focused on delivering sustainable returns,” he said.
So far, Rowe’s priority has been trying to turn around M&S’s underperforming clothing and homewares business.
But on Tuesday he outlined how the firm will streamline its British store estate of over 900 stores over five years and detailed a rationalisation of its international operations.
The shop at 16 Earlham Street specialises in premium loafers for men. Designed by both an in-house team and Dreambox, the store features a lounge area and coffee bar as well as a dedicated space where customers can create their own unique and embossed shoes.
Duke & Dexter founder Archie Hewlett said: “Our heritage is the basis for the success of our brand and Seven Dials as a location mirrored our ethos perfectly. We are amongst great international brands and are thrilled to be making our debut here on Earlham Street in the heart of London’s West End.”
With the shoes designed in London and handcrafted in Sheffield, Duke & Dexter was founded in 2014 and its shoes are stocked by retailers such as Harvey Nichols, Selfridges and Liberty and also in over 100 countries worldwide. The shoes have a celebrity following including the likes of Justin Timberlake, Ryan Reynolds, Eddie Redmayne, Poppy Delevingne, Tinie Tempah and Tyson Beckford.
Sam Bain-Mollison, head of group retail strategy and leasing at Shaftesbury, added: “Earlham Street features a number of flagship stores for emerging menswear fashion brands alongside other international retailers. Duke & Dexter is a really exciting brand and we are so pleased to be able to launch their first UK store in Seven Dials, building on our truly unique retail offer in London.”
Duke & Dexter join recent international debuts on Earlham Street from male beauty retailer BEAST and men’s sportswear brand Ron Dorff.
Following a day of difficult headlines for the retailer, Marks & Spencer is expected to close down dozens of UK stores.
Sky News has reported that chief executive Steve Rowe may announce the closure of many UK stores, in an effort to turn around its financial troubles. It was also reported this morning that many of its Chinese stores could also close.
The source also said that many stores which don’t close will see space reallocated to focus on its grocery section, moving away from its fashion arm.
M&S is set to reveal its interim results next week, in which it is expected to report lower profits and sales. The retailer has denied that the recent changes to pay had anything to do with financial troubles, but did announce plans to cull 500 jobs in its London head office.
These claims have not yet been confirmed, and a spokesperson for M&S has stated they do not comment on rumours.
In July, a month after his appointment, Rowe announced the largest fall in clothing sales for over 10 years, stating: “These are not the numbers I wanted to see – not by any stretch.”
Shares in the retailer have also been driven down by roughly a third in the last year.
The brand has relocated to a 9,000 square foot flagship on Liverpool ONE’s South John Street. The new store is double the size of Apple’s previous unit on Paradise Street which will become home to the Guess fashion brand later this month.
Apple is the most recent in a series of upsizes and new additions to Liverpool ONE’s line-up of brands. These include Jack Wolfskin, Rolex and Victoria’s Secret. Meanwhile, Urban Decay, Lindt and Smiggle are currently fitting out their stores in time for Christmas.
Miles Dunnett, director at Grosvenor Europe, said: “Apple’s upsize is yet another great milestone for Liverpool ONE. Their continued exceptional performance has driven their desire to not only create a larger store, but to deliver a unique retailing experience for visitors.
“Apple joins the ever growing list of additions to Liverpool ONE, and by the end of the year, over 20 new stores will have opened, creating one of the most vibrant, exciting line-ups in the UK.”
Sports Direct has announced that its acting chief financial officer, Matt Pearson, is to step down.
In a statement, the company said Pearson is leaving the business to join another employer.
While Pearson will remain in post until 31 December, the company has appointed Herbert Monteith, a long-standing member of its finance team, as interim head of finance to help facilitate a smooth transition.
Herbert will continue to work closely with Karen Byers, global head of operations, and Sean Nevitt, global head of commercial.
Mike Ashley, Sports Direct chief executive, said: “Matt has been a valued member of the Sports Direct family for over nine years and he will be a loss to the company. I wish him all the best for the future and would like to thank him for his time at Sports Direct.”
WH Smith has increased its full year pre-tax profit by 8% to £131 million following a strong performance from its travel business.
In the year 31 August, group like-for-like sales edged up 1% with total group sales rising by 3% to £1.212 billion.
The group’s travel business, which includes stores at airports and train stations, grew its total sales by 10% and like-for-like sales by 4%. Trading profit climbed by 9% to £87 million, including £7 million from WH Smith’s growing international channel.
WH Smith opened 18 new travel units in the UK during the year, taking the total to 576 units. It won a further 32 units in its international channel, making a total of 232 units, of which 192 are open. As at 31 August 2016, the business operated from 768 units.
Stephen Clarke, WH Smith group chief executive, said: “We have delivered a good performance across the group with earnings up 10%.
“Our travel business continues to perform well with strong sales across all channels and profit up 9%. We have further extended our food to go ranges and during the year we sold over ten million ‘meal deals’.”
Trading profit in WH Smith’s high street business rose by 5% to £62 million in the period. Compared to last year, total sales were down 3% while like-for-like sales fell by 2%.
Clarke added: “In the high street business, our profit focused strategy continues to deliver sustainable growth with profit up 5%. Stationery sales have been strong in the year and in books we are delighted with the success of the Zoella Book Club which launched during the summer.”
During the second half, the high street business delivered £6 million of cost savings, which was £2 million ahead of plan. In total, cost savings in the year were £11 million. An additional £10 million of cost savings have been identified over the next three years making a total of £19 million of which £10 million are planned for 2016/17. As at 31 August 2016 High Street operated from 612 units.
“Looking ahead to the overall group performance, Clarke said: “We will continue to focus on profitable growth, cash generation and investing in new opportunities. While the economic environment is uncertain, we are well positioned for the current year and beyond.”
Apple today invited journalists to London, England to preview its redesigned Regent Street store, set to open this weekend. Dozens of images have been shared on Twitter and other websites, providing us our first glimpse at the revamped location that’s been under construction for more than a year.
Apple Regent Street now features Apple’s next-generation retail design, previously seen at its flagship Union Square location in San Francisco, including wide, open spaces with indoor trees, sequoia wood tables and shelves for displaying products, a large 6K video screen, and light boxes extending the length of the ceiling.
The location now has a Genius Grove, a section at the center of the store designated for customers to receive support side-by-side with Geniuses under the canopy of local trees. This area is able to accommodate more customers than a traditional Genius Bar commonly found at Apple’s other retail locations.
In line with remodeling plans filed last year, the storefront is no longer adorned with four Apple logos in each window, but rather a large, white flag with the Apple logo. The central glass staircase has been removed, replaced with two new side staircases that lead to the second level with more product displays and workshop space.
Apple retail chief Angela Ahrendts was on hand to preview the new store, designed by Foster and Partners, the award-winning architecture firm behind Apple’s upcoming Campus 2 headquarters and Union Square retail location. Apple Regent Street will open its doors to the public on Saturday at 10:00 a.m. local time.
Notonthehighstreet.com to focus on ‘core’ UK business
The online marketplace’s chief financial officer David Phillips, who joined the retailer in July, said the business had shut down its Germany operation in August last year, a year after launching its ecommerce website in the country.
Phillips told Retail Week: “We learnt a lot [from the German expansion] but didn’t get the results we wanted out of it so we’ve stepped away from that.”
The online retailer received £21m investment in its latest funding round in August, led by technology and media company Hubert Burda Media, which Phillips said has “a very clear view on which markets we can expand into”.
However, Phillips added that international expansion was not an immediate priority for Notonthehighstreet over the next 12 months.
“It’s absolutely on the road map of things we’re going to get to but we’re very excited about what we see in terms of our core business in the UK and looking at other category expansion as well,” he said.
Revenue up, losses down
Notonthehighstreet’s full-year accounts for the year ending March 31 were filed at Companies House this month. The etailer recorded a 19% rise in revenue during the period to £38.7m, while losses narrowed to £1.6m.
Phillips attributed the retailer’s losses to its continued investment in its technology platform.
“We’ve got a multi-year plan to carry on investing so we’re not expecting large upticks in EBITDA, certainly in the near term,” he said.
“The concept for us as a retailer is put products that are new and on-trend and in the right categories in front of our customers, so that is where the technology investment is going.”
He added that the retailer was focused on expanding its offer for Christmas trading and beyond.
“We are a leading destination as a gifting site but there is an absolute desire to expand into new categories, to expand the customer experience obviously online, but also offline is not off-limits either,” he said.
“We are going to keep developing our offer to ensure customers see us as not just an online experience.”