(qlmbusinessnews.com via bbc.co.uk – – Mon, 20th Aug 2018) London, Uk – –
Shares in luxury handbag maker Mulberry plunged 30% after it said it was setting aside £3m to cover the cost of House of Fraser's troubles.
The company also warned full-year profits could be “materially reduced” if current tough UK trading continued into the second half of the year.
Mulberry operates 21 House of Fraser concessions, employing 88 people.
It was owed about £2.4m when the department store collapsed and fell into administration.
House of Fraser was then bought by Sports Direct, but its owner, Mike Ashley, has said he will not pay creditors for debts incurred before the takeover.
Mr Ashley says he intends to turn it into the “Harrods of the High Street”, but it is not clear how many of the stores he will keep on.
IMulberry said: “Since the group reported in June 2018, the UK market has continued to remain challenging and sales in House of Fraser stores have been particularly affected.
“If these sales trends in the UK continue into the key trading period of the second half of the financial year, the group's profit for the whole year will be materially reduced.”
Shares later recovered some ground to be about 23% lower at 440p, valuing the company at £283m.
House of Fraser owes big brands millions
Mike Ashley vows to keep most HoF open
Six reasons behind the High Street crisis
Mulberry, whose handbags cost around £1,000, makes more than 70% of its revenue from the UK.
However, it said trading in the rest of the world continued to develop “broadly in line with expectations” and it had signed a deal this month to set up Mulberry Korea.
The company said it was in a strong cash position and continued to follow its strategy to develop Mulberry into a global luxury brand.
Rebecca O'Keeffe, from Interactive Investor, pointed out that Mulberry's shares have lost half their value this year: “There is no doubt that House of Fraser has compounded their problems, but the underlying UK issues are deep-rooted as they struggle against lower footfall and fewer tourists.
“The company is trying to shift its focus internationally and that is helping to mitigate falls in UK demand, but the sustained problems in the UK can't be ignored.”
(qlmbusinessnews.com via uk.reuters.com — Mon,20 Aug 2018) London, UK —
(Reuters) – PepsiCo (PEP.O) is buying household drink-machine maker SodaStream (SODA.TA) (SODA.O) in a $3.2 billion deal, it said on Monday, seeking an edge in health-conscious beverages as it battles chief rival Coca-Cola (KO.N).
PepsiCo will acquire SodaStream for $144 per share in cash, representing a 10.9 percent premium to the Friday closing price of SodaStream’s U.S.-listed stock.
SodaStream, which makes machines that turn tap water into carbonated water, will help diversify PepsiCo’s portfolio of snacks and beverages. The Purchase, New York-based group will use cash on hand to fund the acquisition.
SodaStream’s Israel-listed shares will be halted for trading until its Nasdaq-listed stock opens later on Monday, the Tel Aviv Stock Exchange said in a statement.
(qlmbusinessnews.com via bbc.co.uk – – Sat, 19 Aug 2018) London, Uk – –
The BBC's weekly The Boss series profiles a different business leader from around the world. This week we speak to Jen Atkinson, chairwoman and co-owner of holiday group Inspiring Travel Company (ITC).
When Jen Atkinson saw the travel business she was working for in 2009 flounder in a “perfect storm”, she decided she would put herself forward to try to save the company.
Ms Atkinson was 34 at the time, leading the marketing team at UK firm ITC.
As a result of the global financial crisis there had been a big downturn in the number of people going on holiday, and how much they spent on them.
What made matters worse for ITC was that it was an old-fashioned travel agency, which didn't accept any online bookings. Customers had to to phone up and speak to a member of staff.
And with cash-strapped consumers either not going on holiday at all or increasingly buying their holidays online, hoping to get the lowest possible price, ITC was haemorrhaging losses.
The company's founder and boss Drew Foster had successfully grown the business since 1974, but in 2009 he was seriously ill, and ITC's future was in doubt.
“It was a perfect storm of disasters for the company,” says Ms Atkinson, now 43. “I was thinking, ‘What is going to happen to us? Are we going to close? Are we going to be sold?'
“I remember vividly that I had a plan, I had a vision for saving the firm, so I scribbled it down on two sheets of A4 paper and went to see Drew.
“He went, ‘Great, crack on,' and that is how I came to run ITC.”
Based in Chester, in the north of England, ITC had always attracted a certain number of wealthy customers. Ms Atkinson's plan was to go after more of them, by offering customers holidays that are not just luxurious, but as bespoke as possible.
“I thought that if we give our top customers something that they couldn't order themselves, our business would have a fighting chance of being successful,” she says.
“It is about providing the best possible insight. So when discussing a holiday destination, our staff can say things like, ‘Why don't you stay in this room?' or ‘This room is great, because it is on the ground floor and goes straight onto the beach.'
“You cannot get that service or insight on the internet, where there is so much contradictory advice.”
After making the difficult decision to reduce ITC's workforce from 130 to 80 people, Ms Atkinson's turnaround plan slowly started to work. Sadly Mr Foster did not get to see her efforts come to fruition as he died in October 2009.
Today ITC enjoys an annual turnover of £95m. More importantly, Ms Atkinson has returned the business to profitability, and the number of employees is now 210.
The company's customers include popstars, TV presenters, footballers, business leaders, and other holidaymakers with more than a few quid.
Born and brought up in Leeds, Ms Atkinson's childhood holidays were a world away from those enjoyed by ITC's customers – her family would rent a caravan.
After attending her local comprehensive school, she went to Lancaster University where she graduated in law and marketing.
An early career in marketing then followed, and she first joined ITC in 2002. After becoming chief executive in 2009, she and a business partner bought the company in 2013. Then last year she sold a chunk to a private equity group.
Married with two young children, Ms Atkinson says she has never faced any problems in business because she was a woman, but admits that juggling leading a company while being a new mum can be difficult.
“I have honestly never faced any glass ceilings, but if I had, I would have smashed them,” she says. “What is hard to manage, though, is your innate maternal feelings when you have children. Trying to manage the mum guilt is the hardest thing… but I have a great husband.”
Among ITC's workforce, 80% are female, and until recently all the board members were also women.
To make sure that employees know as much as possible about the holiday destinations and hotels that the company offers, each gets to go on two or three luxury long-haul trips a year. As a result, the company doesn't struggle to find would-be recruits.
Travel industry expert Mike Bugsgang, of Bugsgang & Associates, says there will always be a place for traditional travel agents that don't sell online, such as ITC, Scott Dunn, and Cox & Kings.
“There are still huge numbers of consumers in every section of the market who, when spending a large proportion of their annual budget, prefer to have in-depth guidance from an expert on their holiday options,” he says.
“The Inspiring Travel Company is a prime example of this type of company, which can provide a really personalised and tailored approach to holiday booking.”
After nine years as chief executive, earlier this year Ms Atkinson moved across into the chairman role. She says this is so that she can concentrate on more strategic, long-term matters, while the new chief executive looks after the day-to-day running of the business.
“People said that the internet would make travel companies like ITC extinct, but we are still here,” she says.
“We don't do online sales, and never will, because by actually speaking to our customers we can offer them a better service.”
(qlmbusinessnews.com via uk.businessinsider.com – – Sat, 19 Aug 2018) London, Uk – –
To become wealthy, there are a few things you have to do with your money.
Thomas C. Corley studied and interviewed 233 wealthy individuals over the course of four years and found three common ways they build their fortunes.
“Saver-investors” focused on having no debt, lived well below their means, and invested and saved for many years.
“Virtuosos” were the best of the best in their careers, and worked for companies that gave stock options or owned their own highly-profitable businesses.
“Dreamers” were the wealthiest group: They pursued a big dream and made it a reality, which led to some massive gain or income.
Over a nearly four-year period, I interviewed 233 wealthy individuals. During these interviews I asked each rich person 144 questions. It took me another 18 months to summarize and analyze their responses. In an effort to share my research I've written several books sharing their habits, thinking, psychology, decision-making, risk tolerance, careers and many other things, which I learned thanks to my Rich Habits Study.
One of the many things I learned was how they actually created their wealth.
What I found is that there were three predominant paths rich people pursued in order to accumulate their wealth.
1. The ‘saver-investors'
Just less than 22% of the rich people in my Rich Habits Study fell into this category. The “saver-investors” all had zero debt, and the passive income generated by their invested savings was enough to meet or exceed their standard of living.
They all had five things in common:
They had a low standard of living and
They typically made a modest income and
Their modest income exceeded their low standard of living and
They saved 20% or more of their modest income for many years and
They consistently and prudently invested their savings for many years.
It took the Savers about 32 years to accumulate an average wealth of $3.4 million.
2. The ‘virtuosos'
Approximately 27% of the rich people in my study were “virtuosos.” These rich people were virtuosos in their career, industry, or profession. They were among the best at what they did.
These individuals either worked for large, publicly-held corporations, in which a significant portion of their compensation was stock-based compensation or they were entrepreneurs/small business owners with enterprises that were highly profitable.
It took the virtuosos about 20 years to accumulate an average wealth of $4 million.
3. The ‘dreamers'
The “dreamers” were by far the wealthiest group in my study. Approximately 51% of them were individuals who pursued some big dream and were able to turn that dream into a reality. Their dream eventually provided them with an enormous amount of income, profit, or gain, and they accumulated an average of $7.4 million in about twelve years.
The point to all of this is: There is more than one way to skin a cat. If you're risk averse, it does not disqualify you from becoming rich. If you have no dream or you're not interested in saving your way to wealth, becoming a virtuoso in what you do for a living can make you rich. If you are not a saver or a virtuoso, pursuing some dream that makes your heart sing can also make you wealthy.
If you want to be rich, the only important thing is to pick one path that works for you and stick with it for many years. The one common denominator all levels of wealth shared was time — it took many years to accumulate their wealth.
(qlmbusinessnews.com via news.sky.com– Sat, 18 Aug 2018) London, Uk – –
As students wait for their exam results, Sky News looks at successful people who have done extremely well without top grades.
It can be easy to feel like your entire life depends on what lies in that brown envelope, but these people are proof you can be successful without getting straight As or a first-class degree.
Jeremy Clarkson in 2014: If your A-level results aren't joyous take comfort from the fact I got a C and two Us. And I have a Mercedes Benz.
Jeremy Clarkson in 2015: If your A-level results aren't great, be cheered by the fact that I got a C and two Us. And I'm currently sitting in a villa in St Tropez.
Jeremy Clarkson in 2016: If your A-level results are disappointing, don't worry. I got a C and two Us, and I'm currently on a superyacht in the Med.
Jeremy Clarkson in 2017: If you didn't get the right A-level results, don't worry. I got a C and 2 Us, and my chef is preparing truffles for breakfast.
You get the idea.
“I don't have a single qualification” – and she didn't need one! Jo Malone created a hugely successful fragrance company by teaching herself how to make cosmetics.
Russell Brand, who doesn't have an A-level to his name, has had a successful and colourful career. He has written books, sold out stand-up shows across the world, married (and divorced) a pop star, and has generally been very successful. With the odd controversy here and there.
Probably the most famous case of “I left school at 16”, Richard Branson's career speaks for itself.
The journalist describes himself as a “man of limited intellect”. The broadcaster reportedly only got one A-level and says “there is life after” exam results day.
Lord Sugar left school at 16 and started selling car parts. He now spends his time firing aspiring business people on The Apprentice.
The TV and radio personality left school at 16. He ended up setting up his own production company and is now one of the highest-paid presenters at the BBC.
(qlmbusinessnews.com via bbc.co.uk – – Fri, 17th Aug 2018) London, Uk – –
Elon Musk has attempted to explain his controversial tweet about taking Tesla private, saying he was “not on weed” at the time.
The electric carmaker's founder has been facing intense scrutiny about the 7 August tweet which said he wanted to take Tesla private at $420 a share.
He told the New York Times that the price of $420 seemed like “better karma” than $419.
“But I was not on weed, to be clear,” he said.
4/20 is an infamous term, more common in the US, that refers to the consumption of cannabis.
The price of $419 would have represented a 20% premium over Tesla's share price at the time.
Musk in the hot seat again
Tesla founder playing a dangerous game
“It seemed like better karma at $420 than at $419. But I was not on weed, to be clear. Weed is not helpful for productivity. There's a reason for the word ‘stoned'. You just sit there like a stone on weed,” Mr Musk, 47, told the paper.
His tweet sparked a sharp rally in Tesla's share price, but has also prompted scrutiny. The stock closed at $335.45 in New York on Thursday.
Fox News has reported that the US Securities and Exchange Commission (SEC) had sent subpoenas to the electric carmaker and was “ramping up” its investigation into the tweet.
Mr Musk also said he sent the tweet while driving in a Tesla Model S to the airport and that he did not regret sending it.
‘No sleep, or Ambien'
He also told the New York Times that friends had expressed concern that he was exhausted after working 120 hour weeks: “This past year has been the most difficult and painful year of my career. It was excruciating.”
The company is facing pressure to increase production of its Model 3 car and in May Mr Musk stopped one analyst during a results call by saying “boring bonehead questions are not cool”.
The paper reported that at times during the interview he stopped speaking, seemingly overcome by emotion – and that he spent the full 24 hours of his birthday on 28 June working. “All night – no friends, nothing,” Mr Musk said.
The company is also facing legal actions about its business practices. In the latest complaint, a former employee at its Nevada battery factory filed a whistleblower complaint with the SEC accusing the company of spying on employees.
Tesla said it had taken the complaints by Karl Hansen seriously but after investigating had failed to substantiate them.
In the New York Times interview, Mr Musk said that he took the sedative Ambien to help him sleep when he was not working: “It is often a choice of no sleep, or Ambien.”
According to the New York Times his use of the drug has concerned some board members, who wonder if it affects his late night tweets.
In May Roseanne Barr blamed Ambien for her tweet that likened Valerie Jarrett, an African-American former aide to Barack Obama, to an ape.
‘They can have the job'
Tesla's directors said: “There have been many false and irresponsible rumours in the press about the discussions of the Tesla board. We would like to make clear that Elon's commitment and dedication to Tesla is obvious.
“Over the past 15 years, Elon's leadership of the Tesla team has caused Tesla to grow from a small start-up to having hundreds of thousands of cars on the road that customers love, employing tens of thousands of people around the world, and creating significant shareholder value in the process.”
The statement was issued by the board members, excluding Mr Musk, who controls about a fifth of Tesla shares.
The board has set up a committee to evaluate any take-private proposal from Mr Musk, who has said that he discussed funding a deal with the Saudi Arabian sovereign wealth fund.
The New York Times reported that Mr Musk did not intend to separate the roles of chairman and chief executive, but that a search was underway to recruit a deputy. However, he said there was “no active search” underway.
He added: “If you have anyone who can do a better job, please let me know. They can have the job. Is there someone who can do the job better? They can have the reins right now.”
(qlmbusinessnews.com via uk.reuters.com — Fri, 17th Aug, 2018) London, UK —
AN FRANCISCO (Reuters) – Google is not close to launching a search engine app in China, its chief executive told staff on Thursday, the New York Times reported, as employees of the Alphabet Inc (GOOGL.O) unit called for more transparency and oversight of the project.
Chief Executive Sundar Pichai told a company-wide meeting that though development is in an early stage, providing more services in the world’s most populous country fits with Google’s global mission, the report said.
Hoping to gain approval from the Chinese government to provide a mobile search service, the company plans to block some websites and search terms, Reuters reported this month, citing unnamed sources.
Disclosure of the secretive effort has disturbed some Google employees and human rights advocacy organizations. They are concerned that by agreeing to censorship demands, Google would validate China’s prohibitions on free expression and violate the “don’t be evil” clause in the company’s code of conduct.
Hundreds of employees have called on the company to provide more “transparency, oversight and accountability,” according to an internal petition seen by Reuters on Thursday.
After a separate petition this year, Google announced it would not renew a project to help the U.S. military develop artificial intelligence technology for drones.
The China petition says employees are concerned the project, code named Dragonfly, “makes clear” that ethics principles Google issued during the drone debate “are not enough.”
“We urgently need more transparency, a seat at the table and a commitment to clear and open processes: Google employees need to know what we’re building,” states the document seen by Reuters.
The New York Times first reported the petition on Thursday. Google declined to comment.
Company executives have not commented publicly on Dragonfly, and their remarks at the company-wide meeting marked their first about the project since details about it were leaked.
Employees have asked Google to create an ethics review group with rank-and-file workers, appoint ombudspeople to provide independent review and internally publish assessments of projects that raise substantial ethical questions.
Three former employees involved with Google’s past efforts in China told Reuters current leadership may see offering limited search results in China as better than providing no information at all.
The same rationale led Google to enter China in 2006. It left in 2010 over an escalating dispute with regulators that was capped by what security researchers identified as state-sponsored cyberattacks against Google and other large U.S. firms.
The former employees said they doubt the Chinese government will welcome back Google. A Chinese official, who declined to be named, told Reuters this month that it is “very unlikely” Dragonfly would be available this year.
(qlmbusinessnews.com via telegraph.co.uk – – Thu, 16 Aug 2018) London, Uk – –
B&Q owner Kingfisher bounced back from a sales slump in the second quarter of its financial year as the hottest summer in decades boosted sales of fans, barbecue charcoal and paddling pools.
Sales of hose pipes, sprinklers and accessories at B&Q jumped 400pc in the three months to July and customers also bought 375,000 bags of charcoal, up 75pc on the previous year.
The surge helped the home improvement chain’s like-for-like sales – excluding store openings and closures and adjusted for currency swings – grow 3.6pc to £1bn.
That compares with a dramatic 9pc slump in the previous quarter, when the “Beast from the East” winter storm caused customers to delay DIY projects and stay at home instead of venturing out to the shops.
The hot weather did little to revive the fortunes of Kingfisher’s French chain Castorama, however, which saw a 3.8pc like-for-like drop, leaving overall group like-for-likes up just 1.6pc.
The FTSE 100 company, which also owns Screwfix, is in the middle of a turnaround plan aimed at cutting costs by simplifying its product range and reducing its number of suppliers.
It is also unifying the buying of goods not-for-resale, such as trollies and in-store shelves, across all of its chains, which span Russia, Spain, Poland and Romania as well as the UK and France.
Veronique Laury, chief executive, said: “We started our transformation two and a half years ago and are on track to deliver our strategic milestones for the third year in a row.”
Ed Monk of Fidelity said: “The longer term picture for Kingfisher is tough, with a slowing housing market and few movers affecting sales at its stores
“Management insists a plan to reduce cost by selling the same products across its European hardware brands is on track. It will need to yield results soon for the market to keep faith.”
The results come after B&Q’s key UK rival Homebase revealed plans to shut 42 stores, with the loss of 1,500 jobs, on Tuesday.
The retailer was sold to HMV owner Hilco for £1 earlier in the year after a botched turnaround attempt by its previous proprietor, Australia's Wesfarmers.
(qlmbusinessnews.com via bbc.co.uk – – Wed, 15 Aug 2018) London, Uk – –
Fewer than half of Royal Bank of Scotland's customers would recommend its customer service to friends and family, according to rankings published for the first time.
The Competition and Markets Authority has published the figures in a bid to increase competition in the sector.
RBS is joint bottom of the personal banking league table, along with Clydesdale.
It is also at the bottom for business banking.
A review of retail banking in August 2016 by the competition watchdog ordered lenders to publish customer ratings figures twice a year.
There are 16 banks in the rankings for personal accounts and 14 for business banking.
Adam Land, senior director at the Competition and Markets Authority, said: “For the first time, people will now be able to compare banks on the the quality of the service they provide, and so judge if they're getting the most for their money or could do better elsewhere.”
Customers were asked how likely they would be to recommend their bank on a number of measures, such as overall customer service, online and mobile banking, overdrafts and services in branches.
In terms of overall quality of services, 49% of RBS personal customers would be likely to recommend the bank to friends and family, with Clydesdale also at 49%.
First Direct, which is owned by HSBC, came top with 85% of its customers satisfied.
For business customers, just 47% of those with RBS would recommend the bank in terms of overall service quality. Handelsbanken came top with 84%.
A spokesperson for RBS said: “We are aware we have more work to do in order to improve our service standards and deliver a better experience for our customers.”
The bank is “investing in improving the products and services we offer our personal and business customers” through the UK's first paperless mortgage and a digital lending platform for small businesses.
The results, from a survey of personal and small business customers, must be displayed in banks' branches, websites and mobile apps from today.
Christopher Woolard of the Financial Conduct Authority said: “Getting a good deal isn't just about pricing. It's also important for customers – including individuals and small businesses – to be able to judge the quality of service around their current account and to see whether other providers could offer something that suits them better.”
After the CMA review of banking in 2016, an advertising campaign was launched by the industry in a bid to get customers to change banks through a seven-day switching service. The competition body found that just 3% of current account customers had changed banks in the past year.
The CMA had said consumers could save up to £92 a year if they moved their account.
Image copyrightGETTY IMAGES
The rankings were published as RBS said it would pay a dividend to shareholders for the first time since the final crisis after agreeing a $4.9bn (£3.8bn) settlement with the US Department of Justice. It centred on the way than bank sold mortgage-backed securities, or loans packaged up into bonds and sold to investors, between 2005 and 2008.
That settlement was announced on Tuesday by DoJ, which published documents detailing the settlement. These include emails from the bank's employees. In one, a banker discusses “total f***ing garbage” loans with “fraud [that] was so rampant . . . [and] all random”.
RBS chief executive Ross McEwan said: “”There is no place for the sort of unacceptable behaviour alleged by the DoJ at the bank we are building today.”
The DoJ said it was the biggest settlement for “financial crisis-era misconduct” for a single institution: “These are allegations only, which RBS disputes and does not admit, and there has been no trial or adjudication or judicial finding of any issue of fact or law.”
RBS was bailed out by the government at the height of the financial crisis and taxpayers still own about 62% of its shares.
(qlmbusinessnews.com via theguardian.com – – Wed, 15 Aug 2018) London, Uk – –
Commuter and campaign groups call for freeze on train fare hikes following year of mass cancellations and strikes
Rail fares will go up by another 3.2% in January, the government has confirmed, with the cost of some season tickets to rise by hundreds of pounds.
The figure is below the 3.6% hike in January this year, which was the steepest rise in five years, but continues the trend of fare increases far outstripping any rise in wages.
Rail industry leaders said the fares were “underpinning once-in-a-generation investment” in the railways.
Commuters and campaigners intensified calls for a freeze in fares, in a year in which promised improvements to the railway did not materialise, strikes disrupted services, and the May timetable change cancelled tens of thousands of trains, particularly across Northern and Govia Thameslink Railway.
Confirmation of the planned 2019 rise came with the publication of July’s inflation figures by the Office of National Statistics. Rises to regulated fares, which include season tickets and off-peak returns, are capped at the level of RPI inflation – a measure that is not habitually used and is higher than CPI.
The transport secretary, Chris Grayling, infuriated unions by suggesting rail fare increases could be pegged to the lower measure of inflation if unions accept the same measure for staff pay. In a letter to the RMT, Aslef, Unite and TSSA unions, Grayling said: “As you will be aware, one of the industry’s largest costs is pay … it is important that pay agreements also use CPI and not RPI in future when it comes to basing pay deals on inflation.”
Unions blame privatisation for escalating rail costs. Mick Cash, general secretary of the RMT, said: “If Chris Grayling seriously thinks that rail staff are going to pay the price for his rank incompetence and the greed of the private train operating companies then he needs to think again.”
Grayling defended his proposal in BBC interviews on Wednesday morning as “entirely fair”, said he was “very disappointed” at the reaction from the unions. He said: “My challenge to the unions is let’s get the routine increases down to the lower level of inflation.”
Labour’s shadow transport secretary, Andy McDonald, said Grayling’s “attack on staff pay is, at best, a distraction technique and at wo a recipe for years of industrial action”.
The RMT staged small protests at stations across the country on Wednesday morning against fare rises, claiming passengers were paying “more for less” as job cuts meant fewer staff working on trains, stations and ticket offices.
Commuters at Kings Cross station in London were dismayed at the news of further fare rises. Lydia Bolton, 35, of Royston, Hertfordshire, who works part-time in the charity sector and pays £32 a day to travel to work, said: “It’s awful. We don’t know if we’re going to get a pay rise, we’ve got a young child and we have nursery costs. Of course they should freeze fares – it’s insane.”
Philip Doyle, 46, pays almost £300 a month to commute in from Potters Bar, Herts, to work in recruitment. “Fares are ridiculous, and the service is a shambles. Last Sunday we went away as a family and when we came back to London there was only one train running in three hours, instead of every 20 minutes on the timetable.”
Rosie Jones, 29, a marketing manager, pays £5,284 for an annual season ticket from Huntingdon, Cambridgeshire, said the service had recovered since the chaos of May but evening cancellations still often left her waiting at stations or standing on crowded trains: “It doesn’t seem like there’s any added value for the extra money, and it seems out of step with other costs.”
The TUC renewed calls for public ownership of rail with research showing fares have increased at more than double the rate of wages over the last decade. Fares in Britain have risen by 42% since 2008, while average weekly pay has gone up by only 18%, it said, while private firms running the trains paid out at least £165m in dividends to their shareholders last year, when overall taxpayer subsidy to the rail industry reached £3.5bn.
The RPI figure is used to set the maximum increase in regulated fares, which account for around half of all tickets sold – including commuter season tickets, some off-peak long-distance returns, and “anytime” tickets in major cities. The increased revenue is factored in to rail franchise contracts – although the government says it is up to operators whether they choose to raise fares or not.
Paul Plummer, chief executive of the Rail Delivery Group, which represents the railway, said: “Fares are underpinning a once-in-a-generation investment plan to improve the railway and politicians effectively determine that season ticket prices should change in line with other day-to-day costs to help fund this.”
(qlmbusinessnews.com via telegraph.co.uk – – Tue, 14 Aug, 2018) London, Uk – –
Royal Mail has been fined £50m for breaking competition law after it “abused its dominant position” in the letter delivery market in an attempt to force its rival Whistl to pay higher prices.
The penalty, the largest ever imposed by communications regulator Ofcom, relates to a change in the contracts Royal Mail offered wholesale customers more than four years ago.
At the time Whistl, then known as TNT, was expanding its letters arm by delivering “bulk mail” such as bank statements and utility bills in competition with Royal Mail, but was still reliant on the former state monopoly to deliver some letters on less profitable routes.
Ofcom’s investigation found that Royal Mail’s decision to hike the cost charged to competitors such as Whistl by 0.25p per letter was part of a “deliberate strategy to limit competition”.
The changes “would have had a material impact on a delivery competitor's profits, making it significantly harder for new companies to enter the bulk mail delivery market”, the watchdog said.
Royal Mail, which floated five years ago, plans to appeal the decision, which it said was “without merit and fundamentally flawed”.
It said the proposed price hike, which was cancelled after Whistl raised concerns, was designed to prevent so-called “cherry picking”, whereby competitors without Royal Mail’s obligation to deliver to all UK addresses for the same price pick and choose the most profitable routes.
“Royal Mail welcomes competition, provided it takes place on a level playing field,” it said.
A spokesman for Whistl, which exited the bulk mail market in 2015, said it would seek damages in relation to Royal Mail's actions, which he said had a “hugely negative impact on investment in and the competitive health of the UK postal sector”.
Ofcom’s Jonathan Oxley said: “All companies must play by the rules. Royal Mail's behaviour was unacceptable, and it denied postal users the potential benefits that come from effective competition.”
(qlmbusinessnews.com via news.sky.com– Tue, 14 aug 2018) London, Uk – –
The firm says its board has agreed to recommend Bain's formal 280p-a-share offer to investors, who must vote to approve the deal.
Esure, the insurance firm that owns the Shielas' Wheels brand, has agreed to a £1.2bn takeover by private equity firm Bain Capital.
In a statement, esure said its board had agreed to recommend Bain's formal 280p-a-share offer to investors, which represents a 37% premium to last week's share price.
The firm's largest backers, Sir Peter Wood and Toscafund, which hold around 31% and 17% of esure respectively, have given their backing to the deal.
A total of 75% of shareholders must vote to approve the acquisition, which would see esure taken private and delisted from the London Stock Exchange.
Sir Peter, the group's chairman, who stands to pocket around £370m from the sale, said: “It is a great outcome for shareholders, for the company, and for customers.
“Since its IPO in 2013, esure has grown to nearly 2.5 million in-force policies, delivered more than £800m of annual gross written premiums, and returned just under £300m to shareholders in dividends as well as the considerable value delivered to shareholders through the demerger of GoCompare.
“As a private company and with Bain Capital's backing, esure will be able to invest behind the innovation required to fully realise the opportunities in this market.”
He will continue as chairman following the takeover.
Esure also announced its results for the first half of the year, which showed pre-tax profit fell by 20% from £45.1m to £36.1m in the six months to 30 June.
The company said its profits were dented by a £14m charge from adverse weather-related claims in its home and motor accounts.
It blamed the drop on a hit from the so-called “Beast from the East” which brought snow and icy temperatures in February and March and flash flooding in May.
Esure provides insurance products to more than two million drivers, homeowners, pet owners and holidaymakers across the UK.
(qlmbusinessnews.com via theguardian.com – – Mon, 13th Aug 2018) London, Uk – –
Analysis by New Economics Foundation says lost jobs are a £1.5bn cost to GDP
The DIY chain Homebase is expected to reveal the closure of up to 80 stores this week as job losses from Britain’s high streets total more than 30,000.
Homebase is battling for survival amid a slowdown in the housing market as well as rising costs and increasing pressure from online rivals and discounters such as B&M.
It wants to exit loss-making stores and agree to rent cuts ahead of a rent bill due in late September.
The closures will add to the mountain of job losses on Britain’s high streets. About 25,000 jobs have gone in the first seven months of 2018, according to analysis by the New Economics Foundation (NEF), with a further 8,300 jobs under threat at suppliers.
The figures, which include those at risk of imminent redundancy as well as workers who have already lost their jobs, adds up to £1.5bn in lost GDP, said NEF’s report.
At the weekend, seven Marks & Spencer clothing stores closed their doors for the last time as the high-street chain pushes ahead with a transformation plan.
M&S said in May it plans to close 100 stores by 2022.
Toys R Us, Poundworld and Maplin have collapsed, while New Look, Mothercare, Marks & Spencer and Carpetright have disclosed plans to close hundreds of stores as weak consumer confidence is compounded by the online shopping boom.
Alfie Stirling, head of economics at the NEF, said: “The shape of our economy is beginning to flex and buckle in response to powerful structural forces such as weakening household spending power and a shift in consumer behaviour towards online purchasing.”
Meanwhile, House of Fraser employees and pensioners are nervously awaiting more details about their future. The £90m rescue deal by Sports Direct, the sportswear chain controlled by Mike Ashley, will protect 16,000 jobs for the time being.
At age 20, professional gamer Michael Schmale had it all: a steady salary, a team mansion overlooking Hollywood and a chef, personal trainer, coach and team manager who were all there to help him play at his best. But the job came with plenty of uncertainties too. This is a series about careers of the future hosted by Bloomberg Technology's Aki Ito.
Video by David Nicholson and Victoria Blackburne-Daniell
(qlmbusinessnews.com via theguardian.com – – Sun, 12th Aug 2018) London, Uk – –
The bargain chain is due to close the last of its 335 stores this week. What happened to the chain’s unstoppable rise?
Last week at the doomed branch of Poundworld in Lewisham, south-east London, toothbrushes for dogs – reduced to 70p – were lying opposite reading glasses for 50p. One-litre bottles of antifreeze were still £1, but the 2017 Justin Bieber annuals, piled up like discarded pizza boxes, were down to 50p after an initial drop to 75p failed to shift them. Telescopic fishing nets were also selling slowly. Elsewhere, shelves were bare. These were for sale, too: notices taped to the shop windows advertised the fixtures and fittings. Wire “dump bins”, in which products were once piled high, were going for £10.
This was one of the last Poundworld branches still clinging to life. Last month, Deloitte, which has run the chain since it went into administration in June, announced that all 335 shops would be gone by the end of this week, along with the last of more than 5,000 jobs. At lunchtime last Tuesday, the man behind the till in Lewisham didn’t know exactly when the end would come. “They’re saying next week, but it could be tomorrow,” he said as I paid 80p for a phone charger cable and a pack of 50 plant ties.
In 2012, when this branch replaced a Peacocks clothes shop on a prime stretch of Lewisham’s bustling high street, the chain was riding high. Four years after the global financial crisis, the retail sector was quaking under an onslaught of discounters. As real incomes were squeezed, the fixed-price chains with their “everything for £1” model were primed to take advantage, offering an Aladdin’s cave of homeware, groceries and trinkets. Just two years ago, Poundworld was opening a new store every week after a £150m takeover by TPG, a US-based private equity group.
Pound chains held a certain fascination beyond their pricing and multiplicity of wares. This week, Saving Poundstretcher, a new series on Channel 4, began following the mixed-price discount chain, as its owner, Aziz Tayub, tried to revive it. In a case of awkward broadcast timing, the man we see Tayub bringing in to oversee the turnaround is Chris Edwards, the former market trader who launched and ran Poundworld until 2015, but failed to rescue it last month. He left Poundstretcher in April this year.
In 2015, a BBC documentary, Pound Shop Wars, followed the rivalry between Poundworld and the bigger Poundland chain. What happened to Poundworld, which until so recently seemed unstoppable? And what can its rise and fall tell us about the forces that have shaped the high street in the past three decades? Deloitte declined to discuss Poundworld, but the story of its creation can be gleaned from In for a Pound, Edwards’ 2015 autobiography. It charts the lives of a family of travelling showmen who began to drift away from the fairground when Edwards bagged the prime stall on Wakefield market in 1968, when he was 18. In 1974, he opened his first homeware shop in the West Yorkshire town and called it Bargain Centre. Other stores followed, while Edwards also moved into the nightclub business.
In 1994, Edwards saw an opportunity in the fixed-price pound shop idea. He was inspired by the early success of Poundland, which had been co-founded in 1990 by former West Midlands market trader Steven Smith (who was in turn inspired by the creation of the pound coin in the 80s). Edwards, who worked with his brother Laurie (his son, Chris Edwards Jr, also later became a senior executive), renamed his six Bargain Centre stores “Everything’s £1” and watched takings rise.
It was not exactly a new concept. In 1884, a Polish-Jewish migrant called Michael Marks opened Penny Bazaar in Leeds. His slogan was: “Don’t ask the price, it’s a penny”. Marks joined Tom Spencer, a bookkeeper, and, by 1900, Marks & Spencer had 36 Penny Bazaars. Eventually, the pair began moving away from fixed pricing and began trading under their own names. Woolworths started in a similar vein – when the chain arrived in Britain from the US in 1909, almost all its products were priced at threepence or sixpence.
Yet fixed-price discounting then fell out of favour for several decades. Leigh Sparks, a professor of retail studies at the University of Stirling, partly blames retail price maintenance, a practice adopted in the 20s under which retailers agreed not to discount manufacturer prices. It was only abandoned in 1964. Other factors were the rising postwar affluence, followed by 70s inflation. “The consumer boom in the 1980s was also anathema to the model,” Sparks says, pointing to a lingering snobbery towards discounted goods in a decade of excess.
But by the 90s, Poundland and Everything’s £1 (which Edwards renamed Poundworld in 2003) could tap into a renewed appetite for simple, low prices. “We opened with 648 products and on the first day we took over £13,000,” Smith tells me in an email, recalling the first day of trading at the original Poundland in Burton upon Trent. (Smith sold the company for £50m to a US private equity firm in 2002. It has more than 700 stores and is now owned by Steinhoff International, a South African retail giant, after a separate £610m sale in 2016.)
“There was this feeling in British retail that we had gone through the building of cathedrals of consumption in the 1980s and the sector was moving up in quality and price,” Sparks adds, recalling the spread of shopping centres and supermarkets. “There was room underneath.” Notably, Aldi and Lidl arrived in Britain in the same years that Poundland and Everything’s £1 launched (in 1990 and 1994 respectively). Snobbery and old loyalties made growth gradual at first, Sparks says, but then China entered the equation. Edwards writes in his book of a trip to China in 1997: “I would see stuff I had bought from wholesalers in Britain for 55p and it would be for sale [in China] to us for 25p. It was exciting!” With the help of local agents, Edwards adopted the Poundland model of dealing directly with manufacturers, cutting out wholesalers.
Shoppers were excited, too. “There is this sense of freedom about walking into a pound shop,” says Alison Hulme, a lecturer in international development at the University of Northampton, who specialises in the sociology and history of consumerism, and wrote her PhD on pound shops. “You don’t feel you need to keep track of what you’re spending, because you just count the items in your basket.” There are no shocks at the till in a pound shop, nor any fumbling for coppers.
The chains lured supermarket shoppers with everyday goods and groceries, including some from bigger brands. You could go in for a drying rack and come out with a month’s supply of Heinz baked beans. In Poundworld’s Lewisham store, Kath Burton, a shopper in her 80s, told me: “I usually come in for things like fly killer.” This time, she had grabbed a wodge of glittered gift tags from the chaotic array of Christmas goods. (On the next aisle, the chain had brought out a load of Easter products, presumably retrieved from the corner of a warehouse.)
Then came 2008 and the economic downturn. Suddenly, bargain-hunting was more necessity than sport. Growth soared and the number of pound shops doubled between 2010 and 2016, according to the retail analyst the Local Data Company, when Poundland and Poundworld peaked with more than 1,000 stores between them. Valuable sites were opening on the high street: more than 130 former Woolworths stores were taken over by fixed-price discounters after the chain failed in 2008. As Edwards’ brother Laurie writes in one chapter of In for a Pound: “Before the tough times, the powers that be didn’t want pound shops in town centres – I think they thought we lowered the tone.”
That all changed after the financial crisis and the stores began to welcome affluent shoppers. In 2009, Poundland recorded a 22% rise in customers from the highest wealth bracket, AB. That year, Poundland’s CEO, Jim McCarthy, told the BBC: “I remember going to dinner parties a few years ago where the topic of conversation was how much the value of their house had gone up. Those days have gone. Now it’s about how much money they’ve saved on their purchases.”
As it grew, Poundworld tried to pass down its family-run ethos to shop floors. “It’s really hard to explain it to the outside [world],” says one former Poundworld store manager, who prefers not to be named, days after handing over the store’s keys. “I started doing weekend shifts out of school and worked my way up. I absolutely loved working there, and that definitely came from the top. My team still has a WhatsApp group and even now everyone still says ‘Good morning’ and ‘Goodnight’ to each other.”
But the economic environment in which Poundworld had flourished was tightening. Competition became fierce with the growth of other big names in discounting, including B&M, Home Bargains and Savers, and supermarkets hit back with their own discount lines. Some of the challenges have been universal – online competition, rising rents, business rates and wage bills among them – but margins are particularly tight for pound shops. When the pound drops in value, as it did after the Brexit referendum, or the cost of goods rises with inflation, other stores can raise prices in an instant. Pound shops have to be smarter.
At one point, Poundland almost had to stop stocking reading glasses, one of its biggest sellers. “We had to work very hard with our supplier,” says Nick Agarwal, a consultant at the chain. “They took out metal parts from the spring hinge in the arms and changed production to produce the plastic in each pair in one go.” In 2013, Edwards Sr travelled to a factory in China to look at bras, an item typically out of Poundworld’s reach. By reducing the amount of elastic and switching to a cheaper material, Edwards was able to make the price work. He ordered half a million £1 bras on the spot, worked up a smart press release and sold them in days.
“Shrinkflation”, whereby bags of Maltesers lose a few grams or a set of pencils a few, well, pencils, is another tactic. The pound chains work directly with manufacturers to tweak packaging and weights. Customers don’t always like it, a response Poundland seized on in 2016 when Mondelez, which makes Toblerone, increased the gaps between the chocolate bar’s Matterhorn-like pieces. Months later, Poundland, which had sold 12m Toblerones a year, created Twin Peaks, a familiar bar with no gaps and two peaks in each piece. (It was inspired by the Wrekin and Ercall hills in Shropshire, not far from Poundland’s headquarters, the chain said.) Now that a legal dispute with Mondelez as bee setteled , Agarwal says, Twin Peaks will replace Toblerone later this year.
Thanks to its greater size, Poundland, which has so far managed to ride out the retail storm, had more power than Poundworld to negotiate and manage these changes – and fast. But both chains were also struck by volatility in currency exchange rates, especially when they buy in bulk, often in US dollars. Moreover, one can only fit so much into a pound shop basket, making it difficult to profit from each customer. One way past these obstacles has been to inch away from the fixed-price model, as Marks & Spencer did a century ago. Last year, Poundland introduced 50p, £2 and £5 ranges (although Agarwal says 90% of stock is still £1) and began offering Pep&Co clothing ranges without fixed prices. (Pep&Co launched in 2015 and shares the same parent company.) The key, Agarwal says, is to preserve the clarity of pricing.
The unnamed former Poundworld store manager says the first sign of trouble came when the chain changed its own prices in 2016. “Each week we would be rolling out new shelving bays as ‘manager’s specials’, where prices were written by hand,” the former manager says. “Customers would say: ‘I thought this was supposed to be a pound shop.’” Yet Poundworld was already fixated on growth, desperate to bolster its footfall and purchasing power. It opened a vast new distribution centre in 2016. “Expansion is definitely on our minds,” Edwards Jr wrote in his contribution to his father’s book. “We have research showing there’s definitely room for hundreds more stores. Then we’ve got Europe and the question becomes: ‘Where do you stop?’” This summer, the answer came back.
There were several attempts to save Poundworld. The Edwards family tried, even after Edwards Sr had left the company in 2016. Even Smith, the Poundland founder, considered rescuing his old rival. Both men have accused Deloitte of not doing enough, but the administrator said it received no “credible and acceptable bid” for the chain. “It is very difficult to do a deal with a business that is in administration,” Smith says. Meanwhile, there are hundreds more empty stores on high streets.
As I browsed the chaotic aisles in Lewisham, a man armed with a clipboard was surveying the store for the landlord. “It’s absolutely massive for this location,” he said, also preferring not to be named. Finding a new tenant may not be easy.
The former Poundworld manager, who starts a new job this week, wondered about the state of the business earlier this year when the inventory on the store’s online ordering software began to shrink: “Groceries were going from 24 pages down to 12 and you were worried about filling the shelves.” As rescue attempts failed last month, staff knew it was over. The closing-down sale and clear-out were “heartbreaking … I really struggled to get through it,” the manager says. “It has been like a bereavement. We were tired and we had given this store everything.”
(qlmbusinessnews.com via bbc.co.uk – – Sat, 11 Aug 2018) London, Uk – –
Reggie Nelson was fed up with the world around him after his dad died. An inspirational chat led to Reggie deciding to take a risk knocking on the doors of the wealthy to find out how they amassed their wealth. One day a door opened.
This is his story.
Produced and Filmed by Cebo Luthuli