Ocado report booming sales as home deliveries rise in Covid-19 pandemic

(qlmbusinessnews.com via theguardian.com – – Tue, 9th Feb 2021) London, Uk – –

Online grocery service’s sales reach £2.2bn in 2020, boosted by tie-up with Marks & Spencer

Ocado said many customers were unlikely to revert to pre-crisis shopping habits. 

Ocado has reported booming sales at its online grocery service as shoppers switched to supermarket home delivery services during the Covid-19 pandemic.

Retail sales at Ocado, which now delivers Marks & Spencer groceries, jumped 35% to £2.2bn in 2020, but the overall group, which includes its tech business, Ocado Solutions, made a small loss of £44m. That compares with a pre-tax loss of £214.5m in 2019.

Tim Steiner, Ocado’s chief executive, said coronavirus has caused a dramatic shift in grocery retail and the landscape was “changing for good”.

“Many customers who have tried online grocery for the first time have seen the benefits and are saying they are unlikely to revert to pre-crisis shopping habits,” the company said.

The Covid-19 crisis has seen demand for grocery deliveries rocket to account for 14% of the market. However, Ocado was limited in its ability to take advantage of the huge increase as its robot powered warehouses were soon working at full capacity.

The company said sales growth in the coming year would be “highly dependent” on the length of Covid-19 restrictions. However, it should have more delivery slots available in the UK in the coming months as three new hi-tech warehouses open. It also plans to pour about £700m into new projects for its technology clients.

After the pandemic was over online shoppers would not only want to do their big grocery shop online, but smaller convenience deliveries and click and collect services would also be in greater demand, Steiner said. Ocado’s first site dedicated to its same-day delivery service, Ocado Zoom, is already full. It has secured a second London site for the rapid service and is looking for another dozen inside the M25.

On an underlying basis, Ocado made a profit of £73.1m in the year to 29 November, compared with the previous year’s £43.3m.

By Zoe Wood

TUI banking on vaccinated Brits taking holidays for a much-needed summer recovery

(qlmbusinessnews.com via uk.reuters.com — Tue, 9th Feb 2021) London, UK —

LONDON (Reuters) – TUI Group, the world’s biggest holiday company, needs a summer recovery to relieve pressure on its strained finances and is banking on vaccinated Britons going abroad in the peak months despite tightening travel restrictions.

Germany-based TUI, which before the pandemic took 23 million people on holiday annually, has secured multiple bailouts from the German government to survive. It said it currently had 2.1 billion euros ($2.5 billion) of financial resources.

“That should be enough until summer, until the business takes off in summer,” Chief Executive Fritz Joussen told reporters on a call.

But there is still great uncertainty over travel for the peak holiday months this year. TUI said progress with Britain’s advanced vaccination programme would help demand.

Asked how long its cash could last and whether more state aid would be needed, Joussen said: “I would say we are in a very good position.”

Jefferies analysts said TUI had liquidity to last about seven months if no holidays were cancelled and it did not have make refunds.

UK RESTRICTIONS

In Britain, TUI’s biggest market with Germany, the government has told people not to book trips abroad for the summer, as the country tightens controls with quarantine hotels and more testing.

Britain’s latest measures are designed to fight new variants of the virus, against which vaccines may not work.

Joussen shrugged off the risk from new variants. “This time (summer) we have vaccination and good testing on top so I’m very confident,” he said.

TUI is planning to operate 80% of 2019’s capacity this summer, saying it already had 2.8 million bookings. In the COVID-19 hit summer of 2020, it operated about 25% of capacity.

The company has cut costs during the pandemic. It said that, for the three months to the end of December, its monthly cash outflow was 300 million euros, down from an expected 400 million to 450 million euros.

That resulted in an adjusted earnings before interest and tax (EBIT) loss for the quarter of 699 million euros.

TUI’s net debt has ballooned to 7.2 billion euros during the pandemic and needs to start repayments in 2022. Joussen said selling assets or raising new equity would help, echoing his comments in December.

“It’s very clear that the math says we need, let’s say 1.5 maybe 2 billion (euros),” he said, adding that this could be achieved through divestments and more equity.

($1 = 0.8280 euros)

Reporting by Sarah Young and Ilona Wissenbach

Tesla buys $1.5bn of Bitcoin causing currency to spike

(qlmbusinessnews.com via bbc.co.uk – – Mon, 8th Feb 2021) London, Uk – –

Elon Musk's car firm Tesla has said it bought about $1.5bn (£1.1bn) of the cryptocurrency Bitcoin in January and expects to start accepting it as payment in future.

The news caused the price of Bitcoin to jump 14% to $43,968, a record high.

Tesla said it was trying to maximise returns on cash that is not being used in day-to-day running of the company.

It comes days after Mr Musk added “#bitcoin” to his Twitter profile page, which drove up the price.

He removed it days later, but has continued talking up Bitcoin and other cryptocurrencies, including Dogecoin, which jumped 50% after his endorsement.

In a stock market filing, Tesla said it “updated its investment policy” in January and now wanted to invest in “reserve assets” such as digital currencies, gold bullion or gold exchange-traded funds.

It said it had already bought $1.5bn of Bitcoin and could “acquire and hold digital assets” in the future.

“Moreover, we expect to begin accepting Bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis,” it said.

Mr Musk said a week ago in a tweet that Bitcoin was “on the verge” of being more widely accepted among investors.

Game-changer?

Some analysts said Tesla's investment could be a game-changer for the cryptocurrency.

“I think we will see an acceleration of companies looking to allocate to Bitcoin now that Tesla has made the first move,” said Eric Turner, vice-president of market intelligence at cryptocurrency research firm Messari.

“One of the largest companies in the world now owns Bitcoin and by extension, every investor that owns Tesla, or even just an S&P 500 fund, has exposure to it as well.”

Bitcoin is a “very volatile” cryptocurrency, said Neil Wilson, chief market analyst for Markets.com.

“Tesla is now starting to take on big [foreign exchange] risk – this may not worry a lot of investors, but some conservative types might be concerned,” he said.

In October, Bank of England governor Andrew Bailey cautioned over Bitcoin's use as a payment method.

“I have to be honest, it is hard to see that Bitcoin has what we tend to call intrinsic value,” he said. “It may have extrinsic value in the sense that people want it.”

Mr Bailey added that he was “very nervous” about people using Bitcoin for payments, pointing out that investors should realise its price was extremely volatile.

Boohoo to pay £25m for Dorothy Perkins, Wallis and Burton

(qlmbusinessnews.com via news.sky.com– Mon, 8th Feb 2021) London, Uk – –

Administrators confirm most staff are to lose their jobs as Arcadia's brands are sold off to face an online-only future.

Boohoo is to pay £25.2m for Dorothy Perkins, Wallis and Burton in a deal set to catapult the fashion brands to an online-only future and result in 2,450 job losses.

The online fashion specialist, which has already snapped up the Debenhams name amid the COVID-19 bloodbath for physical retailers, said it was to buy all the e-commerce and digital assets of the three brands, as well as their stock.

It confirmed that the deal with administrators at Deloitte did not include the brands' retail stores, concessions or franchises.

The collapse of Sir Philip Green's Arcadia empire in December placed 13,000 jobs at risk and only a tiny fraction of 2,500 workers were understood to be saved when Boohoo rival ASOS landed the top names, including TopShop and Miss Selfridge, a week ago.

Administrators confirmed only 260 jobs were to transfer to Boohoo under Monday's deal and all 214 Burton, Dorothy Perkins and Wallis stores – already shuttered by pandemic restrictions – are to be permanently closed down.

They said the staff had been informed via email.

It leaves around 12,400 of Arcadia's 13,000 workers on track to lose their jobs by the time the administration process has been completed.

Deloitte's statement said: “This transaction completes the sale of the Arcadia brands and follows the sale of Topshop, Topman, Miss Selfridge and HIIT to ASOS plc on 4 February 2021 and the sale of Evans to City Chic on 23 December 2020.Retail jobs worst hit by coronavirus pandemic

“In total, these sales together with other asset realisations, have raised proceeds to date of over £500m for the benefit of creditors.

“The process to generate proceeds from the group's remaining assets, principally from the group's property portfolio, is ongoing.”

Boohoo shares, up by 6% in the year to date, fell by 3% in early deals. Traders said the drop could be explained by reports over the weekend that pure online retailers could face a digital sales tax.

“Acquiring these well known brands in British fashion out of administration ensures their heritage is sustained, while our investment aims to transform them into brands that are fit for the current market environment.

“We have a successful track record of integrating British heritage fashion brands onto our proven multi-brand platform, and we are looking forward to bringing these brands on board.”

By James Sillars

The Innovative Flip-Flops Made From Plants And Algae

Source: BI

Researchers at the University of California San Diego have figured out how to turn algae into flip flops. They founded a startup to sell the shoe, but face a challenge in getting their invention mass produced: There aren't enough algae farms to support the startup's supply chain.

10 MOST Likely Industries That Can make YOU a BILLIONAIRE

Source: Alux

This Alux.com video we'll try to answer the following questions: What are the Most Likely Industries That Can make You a Billionaire? What industry makes the most billionaires? What is the easiest industry to get rich in? What business makes the most millionaires? What businesses will make you rich? What is a good business to start in 2020? What is the hottest industry right now? Which industries should aspiring billionaires be aiming for? What industry will make you the richest in the future? Can the e-commerce industry still make billionaires? What industry has produced the most number of millionaires? What industries will create the most billionaires in the next 30 years? Will the biofuel industry create a billionaire, and how? What industry or idea will produce the next generation of billionaires? Will tech still be a good industry for future billionaires in the next 50 years? What are the most common industries to become a billionaire? Which industries will create the most billionaires in the future?

French Connection shares closed up 67% at 26p amid takeover bids

(qlmbusinessnews.com via bbc.co.uk – – Fri, 5th Feb 2021) London, Uk – –

Shares in French Connection closed up 67% at 26p on Friday after the struggling fashion chain said it had received two takeover approaches.

The retailer, which has posted losses for most years in the past decade, said the talks were at an early stage.

One offer comes from Spotlight Brands, which owns Sweaty Betty, together with Gordon Brothers International, which recently bought Laura Ashley.

The other bid is from Go Global Retail and HMJ International Services.

On Thursday, shares in French Connection began trading at 11p, but rose 40% throughout the day on speculation it could be a bid target.

Responding to the speculation, the retailer confirmed it had received bid approaches, but there was “no certainty that an offer will be made, nor as to the terms on which any offer might be made (although any offer is likely to be in cash)”.

Sales hit

The business was founded more than 50 years ago by chief executive Stephen Marks, who began the business on the back of a consignment of cheesecloth shirts.

It currently has about 78 stores in the UK.

In October, it said that sales for the first half of 2020 had fallen by more than half to £23.9m as the Covid-related lockdowns closed its shops and cut consumer spending on clothes.

The company employs about 1,000 staff, according to its latest annual report. Chief executive Stephen Marks, who founded the company, owns more than 40% of the firm, while billionaire Mike Ashley's Frasers Group owns just under a quarter of the company.

In 2018,French Connection had said it could be sold when it said it was “reviewing all strategic options” including the potential sale of the firm.

BoE give sector six months deadline to prepare for possible negative interest rates

(qlmbusinessnews.com via theguardian.com – – Thur, 4th Feb 2021) London, Uk – –

Bank of England’s monetary policy committee votes to keep rate at 0.1% but gives sector six-month deadline

The Bank of England expects GDP to fall by about 4% in the first quarter of 2021 Q1. 

The Bank of England took a step closer to introducing negative interest rates for the first time on Thursday, after it gave lenders six months to prepare for such a move.

Threadneedle Street’s monetary policy committee (MPC) voted unanimously to keep the official interest rate at historically low levels while it agreed to set the deadline for banks to prepare themselves after policymakers said they were ready to make negative lending rates part of their toolkit.

According to the minutes of the MPC meeting, officials were split over asking lenders to put in place the measures needed to facilitate negative rates on loans and mortgages, with some fearing it would signal to investors that the central bank planned to move ahead in the next few months.Q&A

What would negative interest rates mean for UK consumers?

But the committee agreed that to include a cut in interest rates to below zero in the raft of measures available to policymakers, lenders would need to put in place the technical requirements allowing them to implement it at short notice.

There are fears that negative lending rates, which are expected to lower borrowing costs for households and businesses, would force high street banks and building societies to offer negative savings rates.The Bank must not fear radical action. Britain needs negative interest ratesRead more

Savers would suffer a loss of income and pension funds, which also rely on deposit savings, would also be hit.Officials said the balance of risks in the economy, mainly from new variants of Covid overwhelming the benefits of the current vaccination programme, meant it needed to keep rates low. The negative lending announcement came as MPC members voted unanimously to keep the official interest rate at the historically low level of 0.1%.

GDP is expected to fall by about 4% in 2021 Q1, in contrast to expectations of a rise in the November report.

However, the Bank expects growth to bounce back as the NHS vaccine programme takes effect and schools, universities and most businesses return to more normal levels of activity.

The Bank’s quantitative easing bond-buying programme was left unchanged at £895bn after pumping an additional £150bn into the economy at the outset of the second lockdown in November.

Earlier this week, the chairman of the Building Societies Association said cutting the BoE’s lending rate to below zero would force institutions to subsidise savings rates to keep them positive, leaving them no option but to recoup the costs from higher mortgage costs.

Mike Regnier, who is also the chief executive of Yorkshire building society, said introducing negative rates would hurt consumers and the wider economy.

“I fear this would have the opposite effect from supporting the economy, as rates would go up for borrowers as banks protect their margins,” he said.

The BoE base rate, which was cut to 0.1% last March as the UK prepared to go into its first lockdown, is the cost to high street lenders of borrowing money from the central bank, which they must to offer mortgages and loans to households and businesses.

By Phillip Inman

Jeff Bezos Amazon founder to step down as chief executive

(qlmbusinessnews.com via bbc.co.uk – – Wed, 3rd Feb 2021) London, Uk –

Amazon founder Jeff Bezos is to step down as chief executive of the e-commerce giant that he started in his garage nearly 30 years ago.

He will become executive chairman, a move he said would give him “time and energy” to focus on his other ventures.

Mr Bezos, who has a fortune of almost $200bn, will be replaced by Andy Jassy, who currently leads Amazon's cloud computing business.

The change will take place in the second half of 2021, the company said.

“Being the CEO of Amazon is a deep responsibility, and it's consuming. When you have a responsibility like that, it's hard to put attention on anything else,” Mr Bezos said in a letter to Amazon staff on Tuesday.

“As Exec Chair I will stay engaged in important Amazon initiatives but also have the time and energy I need to focus on the Day 1 Fund, the Bezos Earth Fund, Blue Origin, The Washington Post, and my other passions.”

“I've never had more energy, and this isn't about retiring. I'm super passionate about the impact I think these organisations can have,” he added.

Higher public profile

Mr Bezos, 57, has led Amazon since its start as an online bookshop in 1994. The firm now employs 1.3 million people globally and has its hand in everything from package delivery and streaming video to cloud services and advertising.

He's amassed a fortune of $196.2bn, according to Forbes' list of billionaires., making him the world's richest man. However, Bloomberg's billionaire index puts Tesla boss Elon Musk just ahead of him.

Amazon saw its already explosive growth skyrocket last year, as the pandemic prompted a surge in online shopping.

The firm reported $386bn (£283bn) in sales in 2020, up 38% from 2019. Profits almost doubled, rising to $21.3bn.

In announcing the plans, Mr Bezos said he would continue to focus on new products and initiatives.

“When you look at our financial results, what you're actually seeing are the long-run cumulative results of invention,” he said. “Right now I see Amazon at its most inventive ever, making it an optimal time for this transition.”

The shake-up comes as Mr Bezos has developed an increasingly public profile.

He has endured a public divorce, become a target for labour and inequality activists, and poured his wealth into other businesses, such as space exploration firm Blue Origin and the Washington Post newspaper.

‘Not leaving'

Amazon also faces increasing scrutiny from regulators, who have questioned its monopoly power. And its dominance in cloud computing is being increasingly challenged by other tech firms, such as Microsoft and Alphabet, parent company of Google and YouTube.

Mr Bezos's decision to hand over the day-to-day operation of the company came as a surprise. But investors appeared unfazed, with little change in the firm's share price in after-hours trade.

In a call with analysts to discuss the firm's financial results, Amazon chief financial officer Brian Olsavsky said: “Jeff is not leaving, he is getting a new job… The board is super active and important in Amazon's success story.” 

Mr Jassy, a Harvard graduate, has been with Amazon since 1997 and helped develop Amazon Web Services, which has long been seen as the profit engine of the company.

The division provides cloud computing and storage for governments and companies including McDonald's and Netflix.

“Andy is well known inside the company and has been at Amazon almost as long as I have. He will be an outstanding leader, and he has my full confidence,” Mr Bezos said.

Sophie Lund-Yates, analyst at Hargreaves Lansdown, said it was “no accident” that Amazon is tapping the head of the cloud business to lead the company.

Analysis: By James Clayton

This is a real surprise. But you have to remember that Jeff Bezos himself is worth nearly $200bn.

And when you're that rich imagine what you can do. Jeff Bezos has some pretty lofty ambitions outside of Amazon.

His Blue Origin company wants to “build a road to space”. He's also sunk $10bn into Earth Fund, designed to help combat the effects of climate change.

Oh, and he also owns the Washington Post.

How will Amazon cope? Well, importantly, he's not leaving. As executive chair and founder he'll still exercise huge power over the company.

However, stepping back will inevitably mean less influence.

His replacement – Andy Jassy – has been running Amazon Web Services, Amazon's booming cloud business division.

His rise to the top underscores how important this business has become to Amazon.

Another top executive, Jeff Wilke, who led the firm's consumer business, announced his retirement last year.

Amazon Web Services “continued to shine in [its most recent] quarter, and now accounts for a more meaningful chunk of sales. The potential here is huge, and the scalable benefits that come with it should have ears pricking up,” she said.

Overall sales at the company rose 44% in the last three months of the year to $125.6bn, boosted in part by renewed lockdowns in some parts of the world as well as a later date for the firm's “Prime Day”, when the firm drives sales with a slew of discounts.

Amazon Web Services saw sales rise 28% to

The BBC is not responsible for the content of external sites.

Carolina Milanesi, an analyst at Creative Strategies, wrote on Twitter that the “huge” announcement showed how central cloud services are to Amazon's business.

But she added that she did not think Bezos was “done making an impact on the future of the company”.

Critics of the firm reacted to the announcement similarly.

“Do not be fooled by Amazon. Jeff Bezos is still in a position of immense power as executive chair,” said Public Citizen, a US-based consumer rights activist group. “This abusive, predatory monopoly still needs a complete overhaul.”

Asos online fashion retailer buys Topshop, Topman and Miss Selfridge brands

(qlmbusinessnews.com via bbc.co.uk – – Mon, 1st Feb 2021) London, Uk – –

Online fashion retailer Asos has bought the Topshop, Topman, Miss Selfridge and HIIT brands from failed retail group Arcadia in a deal worth £295m.

Sir Philip Green's Arcadia group fell into administration in November last year, casting doubt over the future of its brands and 13,000 jobs.

Asos is acquiring the stock and the brands. However, it is not taking on the stores.

It is paying £265m for the brands and a further £30m for the stock.

Asos chief executive Nick Beighton said: “The acquisition of these iconic British brands is a hugely exciting moment for Asos and our customers and will help accelerate our multi-brand platform strategy.

“We have been central to driving their recent growth online and, under our ownership, we will develop them further, using our design, marketing, technology and logistics expertise, and working closely with key strategic retail partners in the UK and around the world.”

Mr Beighton told journalists on a conference call that acquiring the brands would accelerate Asos's mission to become “the number one destination for fashion-loving 20-somethings throughout the world”.

“This deal makes perfect sense for us on every level,” he added.

Investment plans

Administrators for Arcadia confirmed the deal, saying about 300 people currently employed by the brands in design, buying and retail partnerships would transfer to Asos.

The administrators added that the deal was expected to complete on 4 February.

However, neither Asos nor the administrators made any mention of the people who worked in the brands' store networks.

It is thought that the deal puts about 2,500 jobs at risk.

Asos said it had acquired “strong consumer-facing brands” and saw “a significant opportunity” to drive further growth for them globally.

It added that the brands would benefit from “investment into customer engagement and brand positioning in line with our existing model”.

Asos has seen strong sales in the pandemic and is already one of the biggest wholesalers for the brands that it has acquired.

Analysis: By Dominic O'Connell

Asos' purchase of the four main Arcadia brands leaves the thousands of staff employed in the Topshop, Topman, Miss Selfridge and HIIT shops facing a desperately uncertain future. They are unlikely to keep their jobs. It is hard to see a buyer emerging at the right time to keep them employed.

There are also 10,000 members of the Arcadia pension scheme who face a possible hit to their retirement benefits. The scheme has an estimated deficit of £350m and is being assessed by the Pension Protection Fund, the government-backed lifeboat scheme for orphan pension plans.

Council leaders all over the country will also be fretting at the rapid exodus from the High Street. Topshop once had 300 shops – only 70-odd are still operating – and Debenhams' 124 High Street stores are expected to close from next month. This is a double blow to town centres, which will now look much emptier when pandemic trading restrictions are lifted.

Landlords will be wondering who might be their new tenants. As one retail observer has noted, there is only so much street food and crazy golf that a single postcode can take. Many councils will hope a conversion of empty premises into flats will make the difference. However, the British Property Federation is warning that new government plans to fast-track the re-purposing of retail premises risk making matters worse.

Another of Sir Philip Green's brands, Evans, was bought by Australia's City Chic in December for £23m.

Other brands in the Arcadia stable that have not yet been sold are Dorothy Perkins, Wallis and Burton.

It emerged last week that online fashion retailer Boohoo was in “exclusive” talks to snap up those brands.

Also last week, Boohoo sealed a deal to buy the Debenhams brand and website for £55m. However, the price tag did not include any of the retailer's remaining 118 High Street stores or its workforce, resulting in up to 12,000 job losses.

Sir Philip Green is under pressure to use his own money to plug an estimated £350m hole in Arcadia's pension fund, which has about 10,000 members.

Last year, the retail tycoon had an estimated fortune of £930m, according to the Sunday Times Rich List.

Prof John Colley, associate dean of Warwick Business School, described the Asos deal as “another nail in the High Street's coffin”,

“Meanwhile. landlords will have to try to re-let the properties and there will be few takers in the current climate,” he said.

“With retail values collapsing, it is likely that many of these properties have to be converted for other uses. In that sense, we can see Covid-19 accelerating and crystallising trends which have been developing for many years.”

Shell likely to announce purchase of the Post Office’s broadband operations this week

(qlmbusinessnews.com via news.sky.com– Mon, 1st Feb 2021) London, Uk – –

The oil major's latest purchase outside its core business is likely to be announced early this week, Sky News understands.

The FTSE-100 oil giant Shell will this week clinch the purchase of the Post Office's broadband operations, transforming its presence in the UK home communications market.

Sky News understands that Shell was on Sunday close to signing the deal after weeks of talks.

It is expected to cost the energy behemoth in the region of £80m, and will add roughly 500,000 customers to Shell Energy Retail's existing base.

The deal, which could be announced early this week, will again reinforce how the world's oil majors are reshaping their businesses to reduce their reliance on their traditional hydrocarbon operations.

Last week, Shell announced the acquisition of Ubitricity, the UK's largest electric vehicle-charging network.

Shell has had a presence in the broadband market since acquiring First Utility in 2018, which also took it into the supply of energy to British households.A

Shell Energy Retail – the new name of First Utility – has roughly 130,000 UK broadband customers, as well as 870,000 domestic energy accounts.

For the Post Office, the disposal enables Nick Read, its chief executive, to refocus on its core operations of mail and parcels, banking, travel services and bill payments.

A source close to the Post Office said it would ensure that no postmaster is out of pocket as a result of the sale, with its telecoms arm accounting for just 0.3% of their total pay during the last financial year.

By Mark Kleinman

What’s Driving California’s Mass Exodus?

Source: CNBC

As Oracle, Palantir and Hewlett-Packard Enterprise move their headquarters out of California and Elon Musk moves to Texas, California is considering raising taxes on the wealthy to unprecedented levels. Experts say California needs to find more ways to reverse the trend.

Bitcoin to $1 Million in Five Years, Enormous Wall of Money is Coming says Raoul Pal

Source: Stansberry Research

In this interview with Daniela Cambone, former hedge fund portfolio manager Raoul Pal discusses his views on the current state of the economy. Pal recently moved more than 50% of his assets into bitcoin. The chief executive officer of Global Macro Investor said that it is not an “end of the world' philosophy which will drive the cryptocurrency to rally but an adoption by the real large holders of capital. “I have reduced cash and put that into bitcoin. I'm also thinking of selling my gold to buy more…bitcoin will massively outperform gold, I am 100% convinced of that,” he said.

Boohoo online retailer confirms ‘exclusive’ talks to snapped up three Arcadia brands

(qlmbusinessnews.com via news.sky.com– Fri, 29th Jan 2021) London, Uk – –

Online retailers are on course to deliver a huge blow to the high street as they head the race to snap up Arcadia's main brands.

Boohoo, the online retailer which snapped up the Debenhams brand this week, has confirmed “exclusive” talks to buy remnants of Sir Philip Green's Arcadia empire.

Sky News revealed on Thursday night that Boohoo was leading the race for the Dorothy Perkins, Wallis and Burton brands and was prepared to pay around £25m.

That is because Boohoo – like fierce rival ASOS, which is locked in negotiations over the most valuable parts of Arcadia including Topshop – also has no plans to take on any physical sites amid COVID-19 chaos on the high street.

It places 13,000 Arcadia jobs in peril on top of more than 10,000 at Debenhams,which is also set to see stores shuttered once stock clearances are completed ahead of a pure digital future.

Boohoo said on Friday: “The group confirms that it is in exclusive discussions with the administrators of Arcadia over the acquisition of the Dorothy Perkins, Wallis and Burton (excluding HIIT) brands.

“These discussions may or may not result in agreement of a transaction. A further announcement will be made when appropriate.”

Boohoo shares were 1% down at the open.

Analysts at Jefferies Equity Research said of the potential deal: “While not viewed (or priced) as the ‘jewels in the Arcadia crown', Dorothy Perkins, Wallis, and Burton are well-known brands that in the year to Sep-18 generated a sizeable £580m of revenue between them.

“These acquisitions would be very much consistent with boohoo's successful approach to date, and we would view the brands as a good fit within the group, particularly given the recent Debenhams deal, through which all three traded.”

Boohoo issued the update as industry figures compiled by the Local Data Company showed retail store vacancy rates already at record levels in the three months to December amid a tough Christmas season.

Physical stores deemed non-essential retail, such as fashion, saw a stop-start 2020 as a result of pandemic restrictions.

The British Retail Consortium has warned the situation is only going to get worse as current lockdowns continue.

It has demanded further government support for the retail sector including an extension to the business rates holiday beyond April.

By James Sillars

Pub chain Marston’s shares jumped almost 20% on takeover news

(qlmbusinessnews.com via bbc.co.uk – – Fri, 29th Jan 2021) London, Uk – –

British pub giant Marston's says it has received an “unsolicited” takeover offer from US private equity firm Platinum Equity Advisors.

Marston's said it was evaluating the proposal with its advisers and a further announcement would be made in due course.

Shares in the pub chain jumped almost 20% on the news.

Marston's added there could be “no certainty that any firm offer will be made for the company”.

Platinum Equity Advisors has made the offer for Marston's as the pub chain's share price languished close to a low not seen for more than 20 years.

When the London Stock Exchange closed on Thursday, shares in Marston's were changing hands for 74.80p each. That makes the pub chain look relatively cheap compared to this time last year when shares were 104p each.

All of Marston's 1,368 pubs across the country remain closed because of the coronavirus lockdown. In October, Marston's said it would axe up to 2,150 furloughed jobs because of the rolling lockdowns.

The hospitality sector has been particularly heavily affected by government restrictions, which have forced pubs, restaurants and hotels to close their doors.

Earlier this month, Marston's reported revenues of just £54m for the final three months of last year, which includes the all important Christmas period when hospitality firms traditionally earn the money they need to get through January, which is typically quiet.

That was a dramatic fall from the £1.2bn it earned in the same period a year earlier.

Last year, Marston's combined its brewing operations with Carlsberg UK in a £780m merger. And in December, Marston's agreed to take over the running of all 156 pubs owned by Brains, the largest brewer in Wales.

Brains said restrictions during the pandemic had put the business under “significant financial pressure”, adding that the move would safeguard 1,300 jobs.

Lidl’s UK business fell £25m into the red despite strong sales growth

(qlmbusinessnews.com via theguardian.com – – Thur, 28th Jan 2021) London, Uk – –

Investment into dozens of new stores and refurbishments prompts £25m loss despite strong sales growth

Lidl’s British business fell £25m into the red last year despite ringing up strong sales growth.

The company, which has 800 outlets in England, Scotland and Wales, said the losses followed investment of £654m in 51 new stores, the extension of 13 more sites, and the opening of a new distribution centre in Motherwell, Scotland. The business made a pretax profit of £19m a year before, but that came before a restructuring which combined the group’s store operations and property management into one company.

Lidl, which now employs nearly 24,000 staff, will invest £1.3bn this year and next with a plan to open about 50 more new stores in 2021 and shift to a new British headquarters in south-west London and build a new warehouse in Luton. The company also plans to install at least 300 electric car charging points in its car parks by 2022 and is installing solar panels on new freehold stores.

The German discount chain said it booked sales of £6.9bn in the year to 29 February 2020. While it could not provide a comparable figure from the previous year after the company reorganisation, data from market analysts Kantar indicates sales rose by about 7% during the year, making it one of the UK’s fastest-growing grocery chains.

Like almost all the grocers, Lidl has seen sales growth rise as families have been forced to cook more at home because restaurants, cafes and canteens in many schools and workplaces have been closed during the pandemic.https://www.theguardian.com/email/form/plaintone/business-todaySign up to the daily Business Today email

Sales rose by 18% in the four weeks to 27 December, compared with the same period a year earlier. The increase was larger than those at the UK’s four biggest supermarkets – Tesco, Sainsbury’s, Asda and Morrisons – and Aldi.

Christian Härtnagel, the chief executive of Lidl GB, said: Whilst the world has changed considerably since this financial period [year to February 2020], our driving focus remains on offering customers the best quality products at the lowest prices in the market. We will continue to focus on providing customers up and down the country with this, as we grow our store estate, logistics and operations.

“We are confident in our strategy and see huge potential in the market long-term and will continue to hire more colleagues, invest in British suppliers, open more stores and become an integral part of more communities.”

London stocks hit a near one-month low as lockdown fears weigh

(qlmbusinessnews.com via uk.reuters.com — Thur, 28th Jan 2021) London, UK —

(Reuters) – British shares hit a near one-month low on Thursday as energy stocks tracked commodity prices lower following virus and lockdowns-led demand worries, while the vaccine row between the European Union and AstraZeneca Plc continued to weigh.

AstraZeneca was one of the top drags to the FTSE 100 index as Britain demanded it must receive all of the COVID-19 vaccines it had ordered and paid for after the European Union asked the drugmaker on Wednesday if it could divert supplies of the Oxford-developed shots from Britain.

The blue-chip FTSE 100 index fell 1.5%, with automakers and energy stocks being one of the top losers. The mid-cap index shed 1.6%.

“It’s a very speculative bubble of a market that has definitely led to people suggesting for a pullback,” said Keith Temperton, an equity sales trader at Forte Securities.

“So, in my view, it’s a long overdue pullback and nothing to be alarmed about particularly, but rather just an expected market reaction for London.”

Higher virus cases and lockdowns led the UK to see its biggest rise in vacant shops in over two decades, while car output fell to its lowest level since 1984 after the pandemic shut factories and hurt demand.

The export-heavy FTSE 100 recorded consistent monthly gains since Novemeber, but has recently lost steam and trades flat for January, as a surge in infections and tougher restrictions hit sentiment for risk assets.

British airline easyJet fell 1.1% after warning that it would fly no more than 10% of 2019’s capacity in the Jan-March quarter, while London-listed shares of Hungarian airline Wizz Air gained 0.6% even after reporting a third-quarter loss.

Miner Anglo American slipped 0.1% after it trimmed its production outlook for diamonds in 2021, owing to operational challenges, but it kept output targets for most other metals unchanged.

Reporting by Shashank Nayar 

Contactless card payment limit could be increased to £100

(qlmbusinessnews.com via news.sky.com– Wed, 27th Jan 2021) London, Uk – –

The limit for contactless card payments was raised from £30 to £45 last April at the start of the coronavirus pandemic.

The contactless card payment limit for a single transaction could be raised to £100 – more than double the current amount.

Since the limit was raised from £30 to £45 at the start of the COVID-19 pandemic last April, people have increasingly made use of contactless payments, the Financial Conduct Authority (FCA) said.

The FCA said it is now consulting on raising the limit again.

“Recognising changing behaviour in how people pay, as part of a wider consultation, we will shortly be seeking views on amending our rules to allow for a possible increase in the contactless limit to £100,” it said.

The current £45 limit is three times the amount it was a decade ago.

There are concerns that increasing the contactless payment limit may lead to the end of customers using cash, but the Government intends to legislate to protect against this.

To prevent contact and protect customers during the pandemic, some retailers encouraged shoppers to pay by card, but a recent Bank of England study found the risk of catching coronavirus from banknotes was low.

The FCA made the comments as it confirmed further coronavirus support measures.

It said that for mortgage customers, it is extending current guidance so firms should not enforce repossessions, except in exceptional circumstances, before 1 April.

For consumer credit customers, it has updated the guidance so firms will be able to repossess goods and vehicles from 31 January.

The finalised guidance emphasises this should only be a last resort, subject to complying with government public health guidelines and regulations, for example on social distancing and shielding.

Firms will also need to consider the potential wider impact on vulnerable customers when deciding whether repossession of goods or vehicles is appropriate, the FCA added.

Amateur investors buy stock as ‘failing’ firm soars in value

(qlmbusinessnews.com via bbc.co.uk – – Wed, 27th Jan 2021) London, Uk – –

It's a battle between Wall Street pros and upstart investors using social media platforms like Reddit. And at the moment, the upstarts have the upper hand.

At the centre of the tussle is a US video games bricks and mortar retailer called Gamestop, arguably something of a relic in a world moving online.

Shares in the business have skyrocketed, with the price up 92% at the close of play on Tuesday, bringing the gain over the last few trading days to 276%.

It is, says analyst Neil Wilson from markets.com, getting weird: “We are seeing some serious funny business in some corners of the market.”

“Will it end badly?” asks Thomas Hayes, managing director at Great Hill Capital hedge fund. “Sure. We just don't know when.”

What's driving up the Gamestop price? Certainly not any good news coming out of the company. Gamestop – described as a “failing mall-based retailer” by one professional investor – made a loss of $795m in 2019, and probably several hundred more in 2020.

Instead, an army of savvy social media day traders with access to free trading platforms, and who probably have a lot of time on their hands during lockdown, are swapping tips and ramping up prices via Reddit's chat thread wallstreetbets.

Gamestop is not the only stock to get their attention – Blackberry and Nokia Oyjis are others – but is currently the battleground between the Goliaths like hedge funds and big investors, and the Davids who make up Reddit's private punters.

Key to what's going on is “shorting”, where, say, a hedge fund borrows shares in a company from other investors in the belief that the price of stock is going to fall.

The hedge fund sells the shares on the markets at, for example, $10 each, waits until they fall to $5, and buys them back. The borrowed shares are returned to the original owner, and the hedge fund pockets a profit.

That's the somewhat simplistic theory, anyway.

$2bn losses

Gamestop is the most shorted stock on Wall Street, with some 30% of the shares thought to be in the hands of hedge fund borrowers. But Reddit's retail investors have been spurred into buying Gamestop shares and placing options – pushing up the price and putting a “short squeeze” on the pros.

In this supercharged trading environment, the big Wall Street investors rush back into the market to limit their losses – with the demand pushing up the price still further. One hedge fund, Melvin Capital Management, reportedly had to be bailed out with more than $2bn to cover losses on some shares, including Gamestop.

For many Reddit investors, it not just about making money. They smell blood.

Analyst Neil Wilson says that, from reading the Reddit chat threads, the day traders' battle with Wall Street is clearly personal.

“Among the many aspects of this story that are strange, what is so unusual is the peculiar vigilante morality of the traders pumping the stock. They seem hell-bent on taking on Wall Street, they seem to hate hedge funds and threads are peppered with insults about ‘boomer' money.

“It's a generational fight, redistributive and all about robbing the rich to give to the millennial ‘poor'.”

But many big investors are refusing to budge and continue to hold their Gamestop stock at rock bottom prices. They believe the tide will turn on Reddit's herd instinct and Gamestop shares will come back to earth.

“These are not normal times and while the [Reddit] thing is fascinating to watch, I can't help but think that this is unlikely to end well for someone,” Deutsche Bank strategist Jim Reid said.

Tears and headaches

For stock market veterans it's an example of the madness of speculative trading that can only end in tears. And for regulators, it's a headache, as they are the ones who should be cracking down on market manipulation.

Jacob Frenkel, a former lawyer at the Securities and Exchange Commission, the main US financial regulator, said: “Such volatile trading fuelled by opinions where there appears to be little corporate activity to justify the price movement is exactly what SEC investigations are made of.”

However, other experts believe Reddit's legion of investors represent a generational shift in attitudes to money and use of new technology.

“I don't think this is a fad,” said John Patrick, a fund expert at VanEck. “A retail trader will not lean on Wall Street to manage their money and I definitely now see an antagonistic relationship between the old guard [Wall Street] and individual traders who are on the rise,” he said.

By Russell Hotten

Small British businesses struggling to navigate new Brexit VAT rules

(qlmbusinessnews.com via theguardian.com – – Tue, 26th Jan 2021) London, Uk – –

Britain is no longer part of the EU VAT area, leading to extra costs for companies exporting to Europe

Some hauliers have refused contracts with small UK businesses because of the need for VAT guarantees.

Small British businesses exporting to the EU are struggling to navigate a new VAT regime, with one tax advisory firm receiving up to 200 calls a week from worried companies.

The Federation of Small Businesses (FSB) said its members are facing “significant issues” as a result of leaving the EU VAT area. “Businesses just did not have enough time to prepare for this,” said Selwyn Stein, managing director of VAT IT, a firm that helps reclaim the sales tax. “They’re being hit by a rulebook from 27 separate countries, when they are used to dealing with the EU as a single bloc.”

“They are calling us in a panic because their goods have been stopped and they don’t know what to do,” he said. “They have become fearful about trading so are stopping shipments until they have a resolution.”Advertisement

The UK is no longer part of the single EU VAT area, which means the sales tax is now collected by each country. Bills must be settled up front by the buyer, with a lack of preparedness on the part of exporters and purchasers resulting in shock demands for payment at the border in recent days.

Many small firms are having to consider registering for VAT in multiple jurisdictions for volumes in sales that are often relatively low, according to the FSB, which said the extra administrative burden could be off-putting.

Phil Ward, managing director of Bristol-based firm Eskimo, which sells designer radiators for up to £4,000, said he is considering moving some of its manufacturing to Poland to stay competitive. Brexit had dealt his business a blow, because the EU accounted for 25%-45% of its sales.

Eskimo has not exported anything so far this year as its main distributor has been unable to find a carrier willing to take the job.“We are the only designer and manufacturer of posh radiators in the UK – everything else is imported from Turkey or Italy,” said Ward, who is concerned it is a “hell of a lot more difficult” for EU buyers to deal with a British company than its main rivals, which are based in Italy.

Leaving the bloc also means UK firms can no longer take advantage of the VAT triangulation scheme, which makes cross-border trade easier between EU countries.

David Lee, managing director of Torqueflow-Sydex, an engineering company, said it is now charged VAT at 22% on goods manufactured by its Italian sister company, which are then sold to another EU country, because it is a UK entity.

“This is adding 22% on to our costs, which in a competitive market is an absolute killer,” said Lee. His company’s options include routeing shipments via the UK or registering as a tax entity in every EU country it trades with.

“I’ve been in the industry for over 30 years, working with Australia, Russia and the Middle East – this just makes everything look a joke,” he said.

By Zoe Wood and Caroline Bannock