US fashion retailer Forever 21 files for bankruptcy protection

(qlmbusinessnews.com via theguardian.com – – Mon, 30th Sept 2019) London, Uk – –

Firm with 290 UK staff is latest traditional retailer to struggle with shift to online shopping

The US fashion retailer Forever 21 has filed for chapter 11 bankruptcy protection, joining a growing list of companies that have failed to navigate the shift towards online shopping.

The group’s UK arm, which has three stores in Birmingham, Liverpool and London, is expected to appoint the advisory company RSM as administrator on Monday.

The stores, the first of which opened in 2010, employed more than 290 people, according to the latest published accounts, which cover the year to February 2017 when the business made a £61m loss on sales of £26m.

Chapter 11 provides struggling companies with protection from their creditors, giving management time to implement restructuring plans.

Forever 21’s difficulties reflect the problems afflicting traditional retailers on both sides of the Atlantic. Since the start of 2017, more than 20 major US retailers, including Sears and Toys R Us, have filed for bankruptcy as more customers shift to online retailers such as Amazon.

Founded in 1984, Forever 21 has 815 stores in 57 countries. Last week, the retailer said it would stop trading in Japan and close all 14 stores there at the end of October. The company plans to leave most of its locations in Asia and Europe, but will continue to operate in Mexico and Latin America.

The retailer lists assets and liabilities in the range of $1bn (£800m) to $10bn, according to the filing in the US bankruptcy court for the district of Delaware.

Forever 21 said it had received $275m in financing from its existing lenders, with JPMorgan Chase as agent, and $75m in new capital from TPG Sixth Street Partners, and some of its affiliated funds.

With these funds, the retailer said it intended to operate business as usual and would focus on the profitable core part of its operations.

By Staff and Agencies

Wonga’s historic legacy of mis-sold loans of nearly 400,000

(qlmbusinessnews.com via bbc.co.uk – – Mon, 30th Sept 2019) London, Uk – –

Payday lender Wonga mis-sold loans to hundreds of thousands of people who will only receive a fraction of the compensation payments they are owed.

Administrators for the lender, which collapsed in August 2018, have revealed that 389,621 eligible claims have been made since Wonga's demise.

Ex-customers have until the end of Monday to make a claim for historic mis-sold loans via an online portal.

Administrators hope to make payouts to those owed money by the end of January.

Highs and lows

Wonga was once the biggest payday lender in the UK. It was vilified for its high-cost, short-term loans, seen as targeting the vulnerable.

But it became a household name and was enormously successful until stricter regulation curtailed its, and other payday loan companies', lending.

It collapsed in the UK following a surge in compensation claims from claims management companies acting on behalf of people who felt they should never have been given these loans.

The scale of the sale of unaffordable loans seems to have been underestimated, but has now become clearer as the firm's administrators, Grant Thornton, have been running an automated claims service.

The system checks claims against standards agreed with the Financial Ombudsman. The administrators said they had received 560,982 claims by the end of August. The majority (389,621) were justifiable and entitled to compensation.

So far, the compensation bill is £460m, with the average claim £1,181.

Those totals are likely to rise by the time the online claims service is closed at the end of Monday. Claimants only need to include simple information on the online portal, such as their name and address when they were given the loan, and the application should only take a few minutes.

The administrators warn that compensation will not be paid out in full, as those entitled to payouts are among the host of creditors to receive a cut of the assets of the collapsed lender.

But debt adviser Sara Williams, who writes the Debt Camel blog, said it was still worthwhile for those affected to make a claim in the final hours that the service remained open.

“The regulator's rules say a payday loan is unaffordable if you could only repay it by getting behind with other debts and bills or by borrowing more,” she said.

“If you are due a refund, you won't get paid the full amount. I will be surprised if you get more than 10% of it. That is a disgrace and the UK regulators should be ashamed that they allowed so many payday lenders to profit from people's desperation for so long.

“But it is so easy to make a claim to Wonga that this is still worth doing.”

In February this year, the Treasury Committee of MPs said cases of people with historic mis-selling claims had been “cast aside”, with Wonga causing damage to these ex-customers from “beyond the grave”.

At the time, the committee was referring to just 10,500 people awaiting ombudsman rulings. Experts estimated that, by the end of the day, the number of people in the equivalent position could have swelled to more than 400,000.

Guy Laliberté The Billionaire Who Cofounded Cirque Du Soleil Debuts Montreal’s PY1 Pyramid

Source: Forbes

Guy Laliberté changed the world of entertainment when he cofounded Cirque Du Soleil. Now, he's looking to create a brand new phenomenon with Lune Rouge Entertainment, the corporate parent company of the PY1 pyramid and the psychedelic shows inside. In 2015, he sold off most of Cirque—walking away with $1.5 billion to put into new endeavors.

Two years ago, he launched Lune Rouge Entertainment—he has probably sunk $100 million into it between constructing the pyramid and developing the live entertainment—but it’s certainly the most visible part of his second act. And given how Cirque turned out, it could very well turn out to be more valuable than anything he has done since Cirque.

Solidia Technologies The Green Cement Company Says It Can Cut Carbon Dioxide Emissions

Source: CNBC

Every year, the production of cement accounts for 8 percent of global CO2 emissions. If the cement industry were a country, it would be the world's third-largest emitter of CO2. One company working to reduce the carbon footprint of cement is New-Jersey based start-up, Solidia Technologies. Its cement mixture and curing process can cut CO2 emissions by up to 70 percent.

New Money: The Greatest Wealth Creation Event in History

Source: Stansberry Research

Why is one misunderstood nation now the source of more millionaires and billionaires than anywhere else on earth? And why does America’s mainstream press ignore this story? Join entrepreneur and legendary investor Steve Sjuggerud, as he explores this mysterious place, and explains how it now offers what he calls: “The Greatest Moneymaking Opportunity of Our Lifetimes.”

How The RealReal Consignment Company is Cashing in on Pre-Owned Luxury Brands

Source: WSJ

Resellers of designer clothing and apparel say there’s no reason to be closeted about buying and selling pre-owned luxury wearables. The RealReal consignment company is cashing in on the trend.

BoE may need to cut interest rates should Brexit uncertainty persist – policymaker

(qlmbusinessnews.com via bbc.co.uk – – Fri, 27th Sept 2019) London, Uk – –

The Bank of England may need to cut interest rates should Brexit uncertainty persist, one of its policymakers has said.

Even if the UK avoids a no-deal Brexit, rates may still need to be cut, Michael Saunders said.

Interest rates have been on hold at 0.75% since August 2018, when they were raised from 0.5%.

Last week, the Bank said Brexit uncertainty meant the UK economy was performing below its potential.

“If the UK avoids a no-deal Brexit, monetary policy also could go either way and I think it is quite plausible that the next move in Bank Rate would be down rather than up,” Mr Saunders told local businesses in Barnsley.

The pound dropped against the dollar after his comments were reported, trading down about 0.4% at $1.2277, before paring losses.

Pound v Dollar

Mr Saunders, who is a member of the Bank of England's Monetary Policy Committee (MPC), said that even without a no-deal Brexit, high levels of uncertainty surrounding the UK's departure from the EU would persist and act as a kind of “slow puncture” for the economy.

“In this case, it might well be appropriate to maintain a highly accommodative monetary policy stance for an extended period and perhaps to loosen policy at some stage, especially if global growth remains disappointing,” he said.

Passively waiting to see what happened with Brexit risked inappropriate monetary policy, and the cost of reversing a rate cut if the outlook improved would be low, he added at the event at the Barnsley and Rotherham Chamber of Commerce and Institute of Chartered Accountants.

“In general, I would prefer to be nimble, adjusting policy if it appears necessary to keep the economy on track, and accepting that it may be necessary to change course if the outlook changes significantly,” he said.

Policy options

At its last meeting on interest rates, the MPC unanimously held rates at 0.75%.

Mr Saunders said he still agreed with recent Bank guidance that a limited and gradual increase in interest rates would be needed over the medium term, if Brexit uncertainty reduced significantly and global growth speeds up.

In the event of a no-deal Brexit, Mr Saunders repeated the Bank's position that all policy options would be open, depending on the damage to growth and how much inflation spikes from a further fall in sterling.

Analysis: By Dharshini David

A disorderly no-deal Brexit could leave the Bank of England's rate setters with an unenviable dilemma.

Do they cut interest rates to boost growth – or raise them to curb inflation caused by a possible fall in the exchange rate, shortages and tariffs?

With tackling inflation at the top of its remit, the Bank's economic models assume rates would rise in such circumstances. But rates are set by nine humans, not machines.

The governor, Mark Carney, recently indicated he'd be inclined to cut in the event of a no-deal – and the vote usually goes the boss's way.

But what is remarkable is that there appears to a change of view on his panel of what to do even in the event of a deal.

Just last week, the MPC repeated its mantra that rates would likely go up slowly and gradually in the event of a deal.

But now, one of those who had previously warned of the dangers of not raising rates – Michael Saunders – says that a cut is plausible, deal or no deal.

The Bank says the economy has lost momentum; Michael Saunders likens the pace to a slow puncture. If he's shifting in his position, it's likely others are too

But how much would lower rates help in the event of a disorderly no-deal?

A cut aims to put more money in pockets. But if any hit to growth was due to shortages and disruption, a supply shock, boosting demand, may be counterproductive.

More money is great – as long as there's things to spend it on.

Earlier this month, Bank governor Mark Carney estimated that in a worst-case, chaotic scenario that a no-deal Brexit could reduce the size of the economy by 5.5%.

The Paris-based OECD has predicted a 2% hit in the case of a more managed no-deal Brexit.

Prime Minister Boris Johnson has repeatedly vowed to take the UK out of the European Union by 31 October, without a deal if necessary, but is in a stand-off with Parliament which has passed a law designed to block a no-deal Brexit.

McDonald’s to debut new plant-based burger

(qlmbusinessnews.com via theguardian.com – – Fri, 27th Sept 2019) London, Uk – –

Small-market test rolls out months after rival Burger King began testing the plant-based Impossible Foods burger

McDonald’s is finally taking a nibble of the plant-based burger.

McDonald’s said Thursday that will sell the PLT, or the plant, lettuce and tomato burger for 12 weeks in 28 restaurants in south-western Ontario by the end of the month.

The small-market test is rolling out about six months after rival Burger King began testing the plant-based Impossible Foods burger, which no surprise, is a rival to Beyond Meat. It’s now selling those burgers nationwide because of strong demand from customers.

The entry of McDonald’s, the world’s largest burger chain, into the alternative meat arena has largely been seen as a question of when, and not if. Shares of Beyond Meat Inc bolted 11% higher at the opening bell on the McDonald’s announcement.

It has been a breakthrough year for the companies that are trying to perfect the no-meat burger.

Beyond Meat became a publicly traded company in May when it listed its shares for $45 on the Nadaq. By July, those shares had risen more than 430%. Impossible Foods has raised more than $750m, but remains private.

Beyond Meat and Impossible Foods are now appearing on fast food menus across the United States.

KFC last month began testing plant-based chicken nuggets and boneless wings at an Atlanta restaurant in partnership with Beyond Meat. Carl’s Jr and Del Taco also selling Beyond Meat products. Tim Hortons has tested a Beyond Meat breakfast sausage in Canada.

Impossible Foods announced in May that it was making meatless “sausage” crumbles for the Little Caesars pizza chain in some states.

Fans of Wendy’s have begun a petition to get the chain to add a plant-based burger to the menu. It has garnered more than 26,000 signatures as of Thursday and earlier this month, CEO Todd Penegor said plant-based burgers are “a trend that will be here to stay”.

McDonald’s is pushing forward, albeit in a very limited introduction.

“Why just a small test? We’re in learning mode, so testing is a major part of how we develop our menu,” wrote Ann Wahlgren, McDonald’s vice-president of global menu strategy. “It’s how we look – before we leap.”

British Airways owner IAG warns full-year operating pretax profit will be 215 million euros lower

(qlmbusinessnews.com via uk.reuters.com — Thur, 26th Sept2019) London, UK —

(Reuters) – British Airways owner IAG (ICAG.L) warned on Thursday full-year operating pretax profit will be 215 million euros lower than last year, after major pilot strikes grounded thousands of flights.FILE PHOTO: British Airways aircraft are seen at Heathrow Airport in west London, Britain, February 23, 2018.

The strikes were the latest setback for the airline, which in August suffered its third major computer failure in little more than two years, disrupting flights in its peak travel period.

The group also faces a record $230 million fine under tough new data-protection rules after the theft of data from 500,000 customers from its website last year.

IAG (ICAG.L) said it expected the pilot strikes to cost the company 137 million euros. The strikes on Sept. 9 and Sept 10 by British Airline Pilots Association (BALPA) members led to an initial cancellation of 4,521 flights.

The group now expects full-year operating pretax profit will be 215 million euros lower than the 3.49 billion euros ($3.82 billion) reported last year.

IAG shares were down 2.5% at 468.2 pence at 0717 GMT making them the fourth biggest faller in the FTSE 100.

The airline, whose rivals include easyJet (EZJ.L), Ryanair (RYA.I) and other low-cost airlines, also estimated booking trends in its low-cost segments will be hit by 45 million euros.

British Airways pilots have canceled a strike set for Sept. 27 to allow for talks. BA has offered its pilots an 11.5% pay rise over three years.

“There have been no further talks between British Airways and BALPA,” the company said on Thursday. “Clearly any further industrial action will additionally impact IAG’s full year 2019 operating profit.”

IAG also estimated a further 33 million euro impact because of “threatened strikes” by Heathrow Airport employees.

The owner of Iberia, Aer Lingus and Vueling expects passenger unit revenue to be slightly down on a constant currency basis, with full-year capacity growth expected to be about 4%, compared to 5% previously.

The profit warning comes nearly two months after IAG gave an optimistic outlook from growing revenues in North America and an easing in fuel cost growth.

In its statement on Thursday the company struck a more cautious tone on the prospects for 2020.

“A number of airlines, the weaker ones are disappearing or significantly reducing their capacity so at this stage we still expect 2020 to be a growth year for us but the level of growth that we will be pursuing will be lower than we had previously guided,” the company told analysts in a conference call.

Reporting by Tanishaa Nadkar, Shashwat Awasthi and Aakash Jagadeesh Babu in Bengaluru

Wrightbus falls into administration with the loss of 1,200 jobs

(qlmbusinessnews.com via news.sky.com– Thur, 26th Sept 2019) London, Uk – –

Model bus fan Boris Johnson is urged to help prevent the loss of skilled manufacturing jobs amid union anger at the failure.

Wrightbus, the Northern Ireland maker of the so-called Boris bus, has fallen into administration with 1,200 jobs lost.

Hours after a story by Sky News that an announcement was imminent, employees and their union representatives were told at a meeting a buyer or new investment could not be found.

It followed the breakdown of talks with a number of interested parties including Chinese industrial group Weichai and Jo Bamford – a member of the JCB-founding family.

About 50 workers have been kept on – for now.

Many of those made redundant left the staff briefing to express their disbelief that a deal – believed to have been close only last week – had not been completed.

One, Gordon Mairs, told reporters: “Officially we were made redundant this morning, we have no jobs. Twenty-two years I have been an employee.”

Michael Magnay, joint administrator at insolvency specialists Deloitte, said: “It is bitterly disappointing for all concerned that despite extensive efforts over recent months it has not been possible to find a buyer who wanted to maintain the business as a going concern.

“We recognise the companies are crucially important employers in Ballymena, and this will be devastating news for those who worked there, their families and the town, which has already suffered from a number of manufacturing closures in recent years.

“We will continue to support employees through this difficult time. The joint administrators will explore all remaining options for the business and assets, and would encourage any parties with an interest to contact them.”

The Unite union said the collapse of the 73-year old Balymena firm threatened “devastating consequences” for the economy in County Antrim and beyond as it built on the closures of Michelin Tyres and Gallaher's Tobacco operations.

Regional secretary, Jackie Pollock, said: “This is a workforce at the cutting edge of technological advancements in the design and supply of green public transport.

“We cannot afford to lose any more jobs or skills in this area.

“Just three months ago Boris Johnson gave assurances that he ‘will do everything we can to ensure the future of that great UK company'.

“He has a chance today to do something decent.”

Unite said 4,700 jobs were now at risk across the company's operations and in its supply chain.

The company is best-known for its double-decker Routemasters – with lower-emission vehicles commissioned for use in London while PM Boris Johnson was London mayor.

His successor at City Hall, Sadiq Khan, has shied away from them amid a wider fall in orders in recent years that has coincided with bus services drying up.

The company made two rounds of redundancies in 2018.

Wrightbus owner William Wright was the first prominent businessperson in Northern Ireland to declare support for Brexit.

The company has stopped short of blaming the decision to leave the EU for some of its financial troubles.

Sainsbury’s to close 60 Argos stores as part of reorganisation

(qlmbusinessnews.com via bbc.co.uk – – Wed, 25th Sept 2019) London, Uk – –

Sainsbury's is shutting another 60 to 70 Argos shops and moving them inside its supermarkets as part of a reorganisation.

It will also close up to 15 supermarkets and 40 convenience stores.

The closures are part of a plan to reduce costs by £500m over five years, it said.

However Sainsbury's also plans to open around 120 new grocery outlets, mostly convenience stores.

The supermarket did not say where the closures would be, but said all Argos staff would be relocated.

The plans were announced as Sainsbury's warned investors profits had dipped over the last six months.

It blamed bad weather and higher marketing costs for the forecast £50m drop on the period last year.

Analysis: Emma Simpson

Sainsbury's has been under pressure to show that its business is on track after the collapse of its plan to merge with Asda.

Overhauling its large store estate is part of the new plan.

It was clear when Sainsbury's bought Argos in 2016 that hundreds of Argos stores would be closed and relocated into Sainsbury's stores.

This integration is now well underway. There are now some 290 Argos stores inside a Sainsbury's shop – half of these are relocations.

Sainsbury's is keen to point out that ultimately, it'll end up with as many as 100 more shops overall, including a net loss of around five supermarkets.

There's no detail today on where the openings and closures could be, nor how many roles will be affected, only that it hoped to boost operating profits by £20m a year through the changes.

Sainsbury's is now on a mission to cut costs, some £500m, over the next five years. It's got a tricky balancing act ahead as it tries to cut prices to fend off the discounters and improve its profitability.


The supermarket will also cease new mortgage sales as part of a plan to make its financial services division more profitable.

Earlier this month, larger rival Tesco sold its entire mortgage portfolio to Halifax, exiting a very competitive market. Low interest rates have made mortgages less profitable for lenders.

These moves add weight to the view that offering banking services is becoming a lower priority for the supermarkets, the BBC's personal finance reporter, Kevin Peachey said.

“The big grocery stores were often talked of being the main challengers to the established High Street banks, given customers' brand loyalty and an existing “branch” network,” he said.

Value brands

Sainsbury's reported sales for the three months to 21 September for stores open at least a year and excluding fuel dropped 0.2%. Clothing and food sales rose, while household goods sales dropped 2%.

A fall in its pension deficit means it can reduce its contributions by £50m a year.

“We have focused on reducing prices on every day food and grocery products and expanding our range of value brands, which have been very popular with customers,” said Chief Executive Mike Coupe. “At the same time, we are investing significantly in our supermarkets.”

Fewer items on promotion and fewer new video game and toy releases hurt sales at Argos, he said, while Sainsbury's Tu brand of clothing performed well.

‘Few tweaks'

Sainsbury's has been under pressure to come up with a “plan B” after its failed attempt to buy Asda earlier this year. It had argued the tie-up was necessary to cut costs and improve its buying power so it could reduce prices to counter the rise of the discounters.

Mr Coupe told investors that Sainsbury's could thrive on its own and the reorganisation represented a continuation of his existing strategy with a “few tweaks” along the way.

“We're more competitive than we've ever been,” Mr Coupe said.

“We are confident in our ability to sustainably fund investment in the customer offer.”

Sainsbury's is hoping to generate an extra £20m a year in operating profit with the overhaul of its store estate.

New convenience stores will be more targeted to what shoppers want, it said. For instance, in London and other city centre locations, outlets will have more “food-to-go”.

It also wants to open around ten larger convenience stores, containing Argos services, in more suburban locations.

Sainsbury's has been cutting prices on some daily essentials as well as launching new budget brands , like J James meat, fish and poultry, as they try to match the success of Asda and Tesco's new own-brand ranges.

Nuclear plant at Hinkley point C to run £2.9bn over budget

(qlmbusinessnews.com via bbc.co.uk – – Wed, 25th Sept 2019) London, Uk – –

French power company EDF said the new nuclear plant it is building at Hinkley Point C will cost up to £2.9bn more than thought.

It raised its estimate for the project, in Somerset, to between £21.5bn and £22.5bn, blaming “challenging ground conditions”.

It also said the risk of the project being 15 months late had risen.

The firms constructing the new plant, not taxpayers and customers, pay the bill for the increase in costs.

“This is clearly bad news for nuclear new build prospects in the UK, particularly in light of recent record low offshore wind prices,” said Investec analyst Martin Young.

Cheap wind

Because of the way that the project is being funded, taxpayers and customers will not foot the bill for the increase in costs – EDF and its partner on the project China General Nuclear Power Corp (CGN) will pay.

However, the companies should be cushioned by a comparatively high fixed price for electricity for customers, which was agreed in order to make costs predictable for consumers and to provide leeway for the builders.

Last week, prices for new wind power delivered by 2025 were set at prices as low as £40 per megawatt hour. By comparison, power from Hinkley Point C is expected to cost £92.50 per megawatt hour.

While EDF and CGN, which is partnering the French firm on the work, are still aiming to finish in 2025, the chance of that being 2026 has risen.

“We've given the best view we can, given what we know,” Paul Spence, EDF's director of corporate and regulatory affairs, told the Today programme. “I can't say today what will happen over the course of the construction.”

EDF last raised its estimate for the project in 2017, by £1.5bn.

In common with other major UK building projects, such as Crossrail and HS2, the power plant is over budget.

The first phase of the HS2 high-speed railway between London and Birmingham will be delayed by up to five years, Transport Minister Grant Shapps said earlier this month.

Its cost has also risen from £62bn to between £81bn and £88bn.

Crossrail, the new railway line bisecting London from Reading to Shenfield, was due to be operating by December. The project was allocated £14.8bn in 2010, but this has since swollen to £17.6bn, and is likely to rise further, according to a report by MPs.

“Cost increases reflect challenging ground conditions which made earthworks more expensive than anticipated, revised action plan targets and extra costs needed to implement the completed functional design, which has been adapted for a first-of-a-kind application in the UK context,” EDF said in a statement.

Analysis: Simon Jack

Why the Hinkley overrun matters

These cost overruns will not hit UK consumers. However, a new way of paying for further nuclear stations, such as Sizewell, is being considered.

Under this new model, consumers would see costs of construction added to their bills as the project went along. It means that customers could be exposed to cost overruns.

That is why today's announcement is important and why EDF will find it harder to make the argument for building Sizewell.

That argument is already getting tougher as the price of zero carbon offshore wind continues to plummet.

Making a forty-year bet on another nuclear station with a funding model that exposes consumers to those overruns, is a big call for any government to make.

California passes landmark bill that paves the way for gig economy workers

(qlmbusinessnews.com via bbc.co.uk – – Wed, 11th Sept 2019) London, Uk – –

California lawmakers have passed a bill that paves the way for gig economy workers to get holiday and sick pay.

Assembly Bill 5, as its known, will affect companies such as Uber and Lyft, which depend on those working in the gig economy.

Some estimates suggest costs for those firms would increase by 30% if they have to treat workers as employees.

But opponents of the bill say it will hurt those people who want to work flexible hours.

Assembly Bill 5 would put into law a decision by the state's supreme court last year. Then, judges ruled that workers should be considered employees under state law if they are integral to a company's business or it tells them what to do.

US democratic presidential hopefuls Elizabeth Warren, Bernie Sanders and Kamala Harris have all come out in support of the bill.

But Uber and Lyft have both proposed a referendum on the decision. In a statement after the bill was passed, Lyft said: “We are fully prepared to take this issue to the voters of California to preserve the freedom and access drivers and riders want and need.”

Analysis: By David Lee

The business models of gig economy companies are already under strain – Uber lost more than $5bn in the last quarter alone. Some estimates suggest that having to treat workers as employees, rather than independent contractors, could increase costs by as much as 30%.

Uber and rival ridesharing service Lyft joined forces to push back again the bill. They suggested a guaranteed minimum wage of $21 per hour instead of the sweeping changes the bill would bring.

But that pledge wasn't enough to sway California's Senate, and the state's governor Gavin Newsom is expected to soon sign the bill into law. That paves the way for California's 1 million gig workers to gain added rights next year.

Bovis increase bid for Galliford Try’s housebuilding arm to £1.1bn

(qlmbusinessnews.com via theguardian.com – – Wed, 11th Sept 2019) London, Uk – –

Company improves offer to rival after its first approach was rejected in May

Bovis Homes has revived talks to buy Galliford Try’s housing businesses after improving its potential bid to almost £1.1bn and adding cash to the proposed deal.

The companies have agreed basic terms of a transaction that would more than double Bovis’s housebuilding and enlarge its affordable homes operation. Bovis, the smallest of Britain’s major housebuilders, would be building 10,000 homes a year, from a projected 4,000 this year, and would gain sites in new areas such as Yorkshire and Bristol. It plans to keep the Bovis and Galliford’s Linden Homes brands.

Bovis expects to pay Galliford £675m in shares based on its closing share price on Monday plus £300m in cash. It would also take on £100m of Galliford’s debt and its pension scheme, which has a small surplus. The two companies hope to seal a deal and get it approved by shareholders before Christmas.

The deal would leave Galliford as a construction and infrastructure business concentrating on bigger projects such as the Aberdeen bypass.

Galliford rejected an all-share approach from Bovis in May that valued the businesses at £1.05bn including debt. The revised proposal is £25m higher puts the value at £1.075and offers Galliford shareholders a large chunk of cash.

Bovis said it planned to raise the cash by selling shares worth 9.99% of its existing share capital as well as using existing funds and raising more debt. Bovis rejected a bid from Galliford in 2017 and hired its rival’s former boss Greg Fitzgerald as its chief executive after a damaging scandal over poorly built homes. The turnaround was declared complete when Bovis reported record profits in February.

Bovis would also gain an established affordable homes business with an order book of more than £1bn to expand its own division, which it launched this year and works in partnership with housing associations. It is a more stable business, while private housebuilding is reliant on the ups and downs of the economic cycle, and is more vulnerable to a no-deal Brexit.

The government announced a £3bn programme in March to fund the building of 30,000 affordable homes by providing Treasury backing to housing associations.

Analysts at Jefferies said: “We see the rationale for the deal as the opportunity to buy inexpensive assets well known by the current CEO, bringing Bovis larger market share, speeding up the development of Bovis’s partnership business as well as the potential for cost savings. However, we believe the market will question the timing of such a large deal at this stage in the cycle given all the political and economic uncertainties.”

Bovis shares dropped 4% to £10.16 by lunchtime, while Galliford Try shares initially jumped 20% to 737.5p and later traded 9% higher.

By Sean Farrell and Julia Kollewe

JD Sports reports a 10% leap in like-for-like sales in the UK during the first half of the financial year

(qlmbusinessnews.com via news.sky.com– Tue, 10th Sept 2019) London, Uk – –

JD updates on its Brexit preparations but says it has no plans to significantly cut back its store estate as rivals struggle.

JD Sports has reported a 10% leap in like-for-like sales in the UK during the first half of its financial year, in defiance of the struggles facing the wider high street.

The sports fashion chain credited investment in its store and online offering for the performance across the six months to 3 August.

The wider group, which includes a gym chain and overseas store brands, recorded a 47% surge in revenues to £2.72bn with underlying profits growing by 37% to £235.2m.

On a pre-tax profit basis, which takes one-off costs into account, earnings were 6% higher at almost £130m.

JD Sports executive chairman Peter Cowgill said: “Against a backdrop of widely-reported retail challenges in the UK, it is extremely encouraging that JD has delivered like-for-like sales growth of more than 10% with an improved conversion reflecting consumers' increasingly positive reaction to our elevated multi-channel proposition where a unique and constantly evolving sports and fashion premium brand offer is presented in a vibrant retail theatre with innovative digital technology.”

The results were consistent as far as investors were concerned.

Shares – up 83% in the year to date – were more than 4% higher when trading began on Tuesday.

The company said it was raising its dividend by 3.7% and was on track to deliver on the mid-range of full-year expectations despite the potential for disruption, should the UK leave the EU without a deal on 31 October.

JD said it was planning to open a warehouse in Belgium next year, earlier than initially planned, to assist its logistical operations.

It has proved another difficult year for the wider retail sector with fierce rival Sports Direct facing a series of challenges including a £605m tax claim – ironically from authorities in Belgium.

While JD acknowledged the struggles facing UK retailers, a combination of weak consumer confidence from political and economic uncertainty and higher costs, it said it had no current plans to reduce Its UK store portfolio, which includes Blacks and Go Outdoors.

It said: “We are very aware of the financial benefit that other retailers appear to get when they downsize their estates and, whilst we have no plans to fundamentally alter the size of the JD store network in the UK at this time, we continue to seek fairness and flexibility in the terms of our leases.”

By James Sillars, business reporter

WeWork urged to shelve planned IPO over valuation concerns

(qlmbusinessnews.com via uk.reuters.com — Tue , 10th Sept 2019) London, UK —

TOKYO (Reuters) – SoftBank Group (9984.T), a leading shareholder in the holding company of U.S. office-sharing startup WeWork, has urged it to shelve a planned IPO on concerns over the valuation, the Financial Times reported on Monday.

A SoftBank spokeswoman declined to comment on the report, which cited sources familiar with the matter.

Investor scepticism has already forced money-losing The We Company to consider slashing its IPO valuation to a little more than $20 billion, sources told Reuters last week. That followed weak initial trading at other startups including SoftBank-backed Uber Technologies Inc (UBER.N).

While SoftBank and its $100 billion Vision Fund emphasize their long-term investing credentials, founder and CEO Masayoshi Son has set out an ambitious IPO pipeline for tech investments spanning ride-hailing, fintech and health startups.

Putting The We Company’s offering on hold would disrupt that schedule at a time when SoftBank is seeking funds from investors for a second Vision Fund.

SoftBank made a follow-up investment in We Company, one of its biggest tech bets, at a $47 billion valuation earlier this year – a number widely treated with scepticism by analysts.

Sanford C. Bernstein analyst Chris Lane said that if The We Company halts the IPO, SoftBank could come up with an alternative funding plan for the startup, which he estimates needs $9 billion in funding to become cash-flow positive.

SoftBank “have got an important voice, but more importantly they have money … (The We Company) will have to listen to them,” said Lane, who values the office space-sharing firm at $23 billion.

Tech conglomerate SoftBank has burned through much of the $100 billion raised by its first Vision Fund in just two years, recording big paper gains on internal revaluations of its tech investments.

Vision Fund defends its valuation techniques, which include cash-flow analysis, recent transactions and comparison with peers to underpin its numbers.

At the end of June the fund recorded the value of $71 billion invested in 83 investments as having grown by $20 billion. Since then the share price of portfolio companies Uber and Slack (WORK.N) have both fallen by around a third.

SoftBank says many investments receive a vote of confidence as third parties come in as co-investors or by making follow-on investments at the same or higher valuations.

In the case of The We Company’s $47 billion valuation, if a tech company shelves an IPO due to a lower valuation than expected, investors are generally expected to take that fall into account when appraising their stakes.

Reporting by Sam Nussey and Tim Kelly in Tokyo, Julie Zhu in Hong Kong and Bharath Manjesh in Bengalurus

British Airways pilots strike begins over pay conditions

(qlmbusinessnews.com via bbc.co.uk – – Mon, 9th Sept 2019) London, Uk – –

British Airways pilots have begun a two-day strike in an ongoing dispute over pay and conditions.

Tens of thousands of passengers have been told not to go to airports, with the airline cancelling some 1,700 flights due to the disruption.

The pilots' union Balpa said BA management's cost-cuts and “dumbing down” of the brand had eroded confidence in the airline.

But BA chief Alex Cruz said investment in the operator had never been so big.

Both sides say they are willing to hold further talks, but no date has been set. The pilots are currently scheduled to stage another strike on 27 September.

Balpa's general secretary, Brian Strutton, said: “It is time to get back to the negotiating table and put together a serious offer that will end this dispute.”

But he told the BBC that while BA says publicly it is willing to talk, “in private they say they are not going to negotiate”. And although the headline dispute is about pay, he said there was also deep resentment about the airline's direction.

“BA has lost the trust and confidence of pilots because of cost-cutting and the dumbing down of the brand… management want to squeeze every last penny out of customers and staff,” Mr Strutton said.

Mr Cruz defended the airline against Mr Strutton's claim, saying it had never in its history embarked on such a big investment programme in services and training. He said the airline was “ready and willing” to return to talks with Balpa.

It is the first time BA pilots have walked out and the action could cost the airline up to £40m a day. Some 4,000 pilots are involved in the strike.


Analysis

By Katie Prescott, Business reporter

It's unlikely that passengers will see that much disruption at airports – most of the real problems have happened over the past few weeks as people have rushed to make other travel arrangements, rebook their flights or apply for refunds.

In terms of the negotiations, both sides say that they are open to talks but neither has responded to the other, underlining just how acrimonious their relationship has become.

Ostensibly this is about pay, but there's also underlying discontent among pilots with the company's strategy. Some say they don't like British Airways' cost-cutting drive and they want to see more of the benefits of their bumper profits.

But industry insiders say BA has made those profits because they have cut costs. And that airlines are expensive and unpredictable beasts to run, in thrall to a fluctuating oil price (jet fuel accounts for a quarter of their operating costs) and random acts such as drones in the air.

If they don't come to an agreement in the next few weeks, another strike is scheduled for 27 September. The result of the pilots' union ballot allows strike action until the start of next year, but Balpa says it hopes to resolve the situation well before then.


How did we get here?

Pilots previously rejected a pay increase worth 11.5% over three years, which was proposed by the airline in July.

Balpa says that its members have taken lower pay rises and made sacrifices during more stringent times for the airline in recent years. The union insists that now that BA's financial performance has improved – its parent company IAG reported a 9% rise in profits last year – they should see a greater share of the profits.

BA says its pilots already receive “world-class” salaries. The airline believes the pay offer is “fair and generous”, and that if it is good enough for BA cabin crew, ground staff and engineers – whose unions, Unite and the GMB, have both accepted it – it should be good enough for pilots, too.

The airline says once the 11.5% pay deal has fully taken effect in three years' time, some BA captains could be taking home more than £200,000 a year, allowances included.

Two weeks ago, BA informed some customers they would have to re-book their flights next week due to the planned industrial action.

Unfortunately, due to “human error” the airline mistakenly sent emails to some customers whose flights were not actually affected, throwing BA's customer service operations into a tailspin over the bank holiday weekend.

On Friday, BA said the “vast majority” of affected customers had now either accepted a refund or rebooked, either on alternative dates or with other airlines.

What rights do passengers have if their flight is affected?

BA advice says you can request a full refund, rebook your flight for another time in the next 355 days, or use the value of your fare to fly to a different destination.

If your flight has been cancelled due to a strike, the Civil Aviation Authority sayspassengers also have a legal right to a replacement flight at BA's expense to get you to your destination, even if this means travelling with a different airline.

Most affected passengers would already have been in contact with BA, but they may not have considered additional costs, such as airport parking. They are advised to keep receipts for these extra costs, and BA said it would look at refunding them on a case-by-case basis.

The cost of separate hotel or accommodation bookings that cannot be used may need to be claimed from travel insurance.

Lloyds Banking Group expect a further charge of up to £1.8bn to cover more PPI claims

(qlmbusinessnews.com via theguardian.com – – Mon, 9th Sept 2019) London, Uk – –

Bank says in run-up to deadline it was receiving 800,000 inquiries a week

Lloyds Banking Group will incur a further charge of up to £1.8bn to cover claims relating to mis-sold payment protection insurance after being hit by a surge in claims last month.

Lloyds said the last-minute rush was bigger than expected, and has prompted it to make another PPI charge of between £1.2bn and £1.8bn. At the top end, this is double the £900m charge taken by Royal Bank of Scotland last week, which also saw a last-minute surge in claims. CYBG, which owns the Clydesdale and Yorkshire banks and Virgin Money, also warned last week that it faced a potential bill of £450m for new claims.

The latest charge takes Lloyds’s total compensation bill to nearly £22bn – by far the largest of all the banks. In total, the five major high street banks have set aside more than £40bn to compensate people who purchased often worthless cover in what has become the UK’s largest mis-selling scandal.

Since Lloyds started taking claims in 2011, it has typically received 70,000 PPI information requests a week, but this soared to 600,000 to 800,000 a week in the final weeks before the 29 August deadline.

Lloyds said the number was “higher than expected, with a significant spike in the final days before the deadline expired”.

In light of this, the bank has decided to suspend the remainder of its 2019 share buyback programme, leaving £600m of the £1.75bn programme unused. Lloyds expects capital growth, and its return on equity, to be below its previous guidance, with the final outcome dependent on the actual PPI charge taken.

The latest provision comes on top of £550m in PPI charges taken in the second quarter, which pushed down Lloyds’s pretax profits by 7% to £2.9bn for the six months to the end of June.

By Julia Kollewe

Why Young Professionals Are Willing to Pay $1,000 For Royal Etiquette Classes

Source: Insider

INSIDER's Emily Christian heads to the Plaza Hotel to find out why young professionals are seeking out etiquette classes. She meets with expert Myka Meier, the founder of Beaumont Etiquette, who teaches Emily the graces of a duchess and explains why etiquette is more important today than ever. Does Emily have what it takes to act like a royal for the day?

Why Did Volkswagen Kill The Beetle? One of Its Best Known Iconic Brands

Source: CNBC

Volkswagen is one of the world’s largest automakers. It houses brands such as Audi, Porsche, and Bentley. But perhaps its best-known vehicle is the Volkswagen Beetle. Over its entire lifespan, Volkswagen sold over 22.5 million of all three versions of the Beetle. But in July of 2019, production one of the most iconic and important cars of all time came to an end.