Peloton owners urged to stop using product if near children
Peloton owners have been warned to stop using their treadmills “immediately” if they are near children or animals by safety regulators in the US.
The fitness brand has come under fire after the Consumer Product Safety Commission (CPSC) was made aware of 39 incidents involving the Peloton Tread+, including one fatality.
Peloton sell interactive gym equipment such as treadmills and cycling machines that are able to directly stream virtual classes.
They have become one of the winners of the pandemic as consumers have sought to keep fit with gyms being closed, with the the company value tripling to $26 billion over the pandemic.
The commission said the machine posed “serious risks to children for abrasions, fractures, and death”, however, the CPSC has limited powers and usually relies on brands to recall their own products after warnings.
Peloton has responded to the CPSC’s warning, calling it “inaccurate and misleading”.
“Like all motorised exercise equipment, the Tread+ can pose hazards if the warnings and safety instructions are not followed,” Peloton said in a statement.
The company advised owners of the machine not to let anyone under the age of 16 use the product and to keep children and pets away from the Tread+.
Peloton chief executive John Foley said in an email to Peloton customers: “We design and build all of our products with safety in mind.”
“In order to help ensure that you and your family members stay safe with Peloton products in your home, we need your help.”
The CPSC has said that treadmill accidents are common and reported 22,500 injuries in 2019.
51% of retailers have no ethnic representation in boardrooms
New research has found that just over half of retailers listed on the FTSE and AIM have no ethnic minority representation in their boardrooms. According to new data from recruitment firm Korn Ferry, of the 31 listed UK retail companies, 16 do not have ethnic minority representation on their boards. It also found that about a third of the 31 listed retailers have less than 25 per cent female representation on their boards. When looking at wider list of 144 listed companies that encompass retail, FMCG and hospitality, Korn Ferry found that only 8.4 per cent of chief executives were either from an ethnic minority background or female. Of these CEOs, seven are women and 11 are from an ethnic minority background – with the latter all being men. Meanwhile, of the 1103 board directors on these 144 listed companies, Korn Ferry found that 11.6 per cent of those on the FTSE 100, 5.6 per cent on the FTSE 250 and 6.7 per cent on AIM were ethnic minority board directors. In terms of female representation in the board rooms for these 144 listed firms, it was 35 per cent of those on the FTSE 100, 32.5 per cent on the FTSE 250, and 16.9 per cent on AIM. “The key to increasing female and ethnic representation in chair and CEO roles and on boards more widely is to recognise the issue and move it up the priority list on the board agenda,” Korn Ferry managing director and retail lead Sarah Lim said. “The lack of diversity in these positions must be actively addressed in both succession planning and longer-term talent pipelining at all levels of the organisation. “This applies across the spectrum of both large and small-cap companies. “Diversity requires advocacy from the top. It’s proven that organisations with more diverse leadership perform at a higher level, and given the millions of people that the retail, hospitality and consumer goods industries employ, leaders have to be more reflective of the customer base and the communities they serve.” Korn Ferry also found that consumer companies listed on the FTSE 100 have no ethnic minority chairs on the board and just one chairwoman. FTSE 250 consumer companies have no ethnic minority chairs on the board and three female chairs. Meanwhile consumer companies on AIM were found to have five female chairs, four ethnic minority male chairs and one ethnic minority female chair.
New Asda owner EG Group buys Leon restaurants
The new parent company of Asda has announced the acquisition of fast food restaurant chain Leon amid reports that it was also closing on a deal to takeover Caffe Nero. A figure for the Leon deal was not confirmed by EG Group, the petrol forecourt and convenience store giant run by billionaire brothers Mohsin and Zuber Issa, but a report in Mail on Sunday suggests it could have been worth up to £100 million. In a statement on Sunday morning, EG Group said the acquisition of Leon as a proprietary brand would complement the growth strategy in its non-fuel operations and enhance its foodservice brand portfolio, which already includes third party brands such as Starbucks, KFC, Burger King, Greggs and Subway. EG Group currently operates over 700 foodservice outlets in the UK & Ireland – of which 310 operate from standalone premises – and they accounted for 46 per cent of the firm’s gross profit in 2020. Leon has a network of 71 restaurants, of which 42 are company-owned and operated on leasehold locations particularly in London and other large cities across the UK. Leon’s remaining 29 franchised sites are located in transport hubs – mainly airports and train stations – across the UK and five other European markets, principally The Netherlands. Going forward, EG Group said it would invest in the Leon brand, including plans to open around 20 new sites per year from 2022, as well as broaden the current foodservice offer across the extensive global site network. EG Group said it also saw “significant potential” for Leon’s non-restaurant products – such as its branded cookbooks, own-brand groceries and ready meals – across its convenience retail proposition. The Issa brothers added there was a “fantastic opportunity” to further develop Leon’s menu offer, its various concession formats including drive thrus, and to build on the existing network by exploring opportunities across EG Group’s own sites and other strategic locations. “EG Group continues to identify innovative partnerships and acquisitions that complement our existing consumer offer and enable us to stay at the forefront of consumer trends, particularly in foodservice,” the Issa brothers said. “Our equity investment in Leon is to strengthen our own participation in the fast-growing contemporary foodservice segment. “This acquisition aligns with our commitment to being a committed foodservice operator globally, delivers financial benefit to our underlying business, and supports broader commercial strategies to be able to better realise further growth opportunities.” Leon was founded by John Vincent, Henry Dimbleby and Chef Allegra McEvedy in 2004, and is known for its healthy and environmentally sustainable menu. “In some ways this is a sad day for me, to part company with the business I founded 17 years ago in Carnaby Street,” Vincent said. “But I have had the pleasure of getting to know Mohsin and Zuber across the last few years. They have been enthusiastic customers of Leon, going out of their way to eat here whenever they visit London. “They are decent, hard-working business people who are committed to sustaining and further strengthening the values and culture that we have built at Leon, a business that has my dad’s name above the door. “Mohsin and Zuber will not just be superb custodians of the Leon brand, through EG Group they have the vision, investment appetite, foodservice expertise and network scale to take Leon to many more people and places. “This is what Leon has always been built for and I am confident under the new ownership, the brand will flourish and have even greater appeal to a broader customer base, especially outside of London.” The Leon acquisition follows reports that EG Group was also closing in on a deal to take control of Caffe Nero after buying up the struggling coffee chain’s debt pile. According to The Telegraph, the Issa brothers have bought around £140 million of loans from Swiss private equity firm Partners Group via investment bank Morgan Stanley. Buying the loans has reportedly placed the Issa brothers in pole position to takeover Caffe Nero if it were to default on its mountain of borrowing. Caffe Nero is reportedly at risk of breaching its banking covenants and that the coffee chain could struggle to refinance £145 million of senior ranking debts due to be repaid next year. A Caffe Nero spokesperson said: “We have had a successful winter and spring trading and are generating positive cash flow and are ahead of forecast for the last five months. “We are forecasting no covenant issues in our projections over the next 12 months and we look forward to an even brighter future post May 17 when we open up our cafes fully to the public.” Separately, the Issa brothers are due to find out this week if regulators from the CMA will their £6.8bn acquisition of Asda a final green light. The deal – first announced last October – was completed in February, when the Financial Conduct Authority approved the takeover and the parties involved in the acquisition said all deal conditions had been met in full. Prior to the takeover, US retail giant had owned Asda since 1999. While the CMA approval this week is the final hurdle required for the takeover to go ahead, the parties remain confident of a positive outcome. This means EG Group, together with TDR Capital, will acquire a majority ownership stake in Asda from Walmart. Walmart will retain an equity investment in the Big 4 grocer, with an ongoing commercial relationship and a seat on the board. However, since the deal was completed in February, reports have circulated that senior Asda staff were preparing to quit after receiving their final payouts from the Walmart share scheme. Chief executive Roger Burnley has already confirmed plans step down from his role after three years, while deputy finance chief John Fallon will succeed Rob McWilliam, who leaves this summer.
Hammerson to slash rents as it share the pain with retailers
Hammerson has announced it will slash rents for its retail tenants by around 30 per cent as non-essential stores reopen. The property firm’s managing director Mark Bourgeois said that “typically, we’re resetting our rents to more affordable levels”. The landlord owns a raft of properties, including the Bullring in Birmingham, London’s Brent Cross, Reading’s The Oracle and Victoria Quarter in Leeds. Hammerson has been working to collect as many rents as it could but also aimed to “share the pain” with retailers and said it will continue to support retailers post-reopening. “We reckon across the board and our business we’ll probably reduce rents from their peak by about 30 per cent so we are really doing our bit as are all landlords to make sure we maintain vibrancy in these centres,” Bourgeois said. He added that footfall in last week’s first reopening phase was stronger than in the equivalent period last June. The UK’s successful vaccine rollout has made shoppers “feel safer” and that the large amount of cash they’ve saved during lockdown makes them confident to go out and spend.
Primark profits plunge 90% as AB Foods repays 121m furlough cash
Primark parent company AB Foods has said it will repay £121 million in furlough money claimed under government job retention schemes and pay shareholders a dividend despite a slump in sales and profits. AB Foods said the decision comes despite its stable of Primark stores remaining closed for most of the autumn and winter period, leading to revenues and profits plunging. Primark sales declined by 41 per cent year-on-year to £2.23 billion in the six-month period ending February 27, equating to a drop of almost £1.5 billion. Meanwhile, Primark’s adjusted operating profit for the half-year period came in at £43 million, representing a plunge of 90 per cent when compared to the £441 million recorded the year prior. For AB Foods as a whole, half-year sales were down 17 per cent year-on-year to £6.3 billion while adjusted operating profits fell 50 per cent year-on-year to £319 million. AB Foods attributed these figures to the majority of Primark’s stores being shut down in November through to February due to various lockdown restrictions across the world. It also estimated that loss of sales amounted to £1.1 billion in the periods where its stores were closed, and like-for-likes were down 15 per cent when stores were reopened due to Covid-19 restrictions. In the UK, like-for-like performance was down six per cent in the first half of the year, and down one per cent excluding four major city stores. However, in the US – where all its remained open throughout the half-year period – like-for-like sales was down 11 per cent, or three per cent if excluding the downtown Boston store. Primark also introduced a pre-booking system for its stores in The Netherlands, Belgium and Germany so it could continue to trade safely. In the UK, where its stores and England and Wales reopened on April 12, over half of Primark’s stores broke sales records in the first week thanks to bigger basket sizes and high footfall. AB Foods chief executive George Weston said the furlough repayments would be made as he was confident Primark’s stores would become cash generative following the easing of lockdown restrictions in England and Wales, where 40 per cent of Primark selling space is located. “We are excited about welcoming customers back into our stores as the lockdowns ease and are delighted with record sales in England and Wales in the week after reopening on 12 April,” he said. “With our success in a number of new markets, as wide-ranging as Poland and Florida, we are as convinced as we have ever been in the long-term growth prospects for Primark.” On the furlough scheme, Weston said AB Foods claimed £98 million during the previous financial year to support Primark’s 65,000 workforce. “A further £79 million was claimed in the six months to February 27 and up until today the amount is now £121 million,” AB Foods said. Chairman Michael McLintock said: “Although uncertainty remains, a large proportion of the UK adult population has now been vaccinated and last week we saw the successful reopening of Primark’s English and Welsh stores which represent some 40 per cent of our total retail selling space. “On the assumption that our English and Welsh stores remain open, Primark will return to cash generation. “Accordingly, we do not plan to make any further claims from government job retention schemes for which we would be eligible from this date, and we intend to repay the £121 million referred to above. “This includes the repayment of £72 million to the UK Government.” A dividend of 6.2p a share was declared, worth £49 million, having scrapped any dividend payments last year. AB Foods said it expected to be trading from 68 per cent of selling space by the end of April.
Aldi to bring back Cuthbert the Caterpillar in response to M&S dispute
Aldi has confirmed that it is relaunching a limited edition Cuthbert the Caterpillar cake following a legal dispute with Marks & Spencer. M&S has claimed that Aldi’s Cuthbert product infringes its Colin the Caterpillar trademark. Aldi will be donating profits to its charity partners Teenage Cancer Trust and Macmillan Cancer Support. M&S started legal action against Aldi last week in an effort to protect its Colin the Caterpillar cake. It lodged an intellectual property claim with the High Court and wants Aldi to remove the product from sale and agree not to sell anything similar in the future. M&S is arguing that the similarity of Aldi’s product leads consumers to believe they are of the same standard and “ride on the coat-tails” of M&S’s reputation with the product. Meanwhile, Aldi has called on M&S to “take a stand against caterpillar cruelty”. It posted the following to its social media channels: “Hey Marks and Spencer. Can Colin and Cuthbert be besties? We’re bringing back a limited edition Cuthbert next month and want to donate all profits to cancer charities including your partners Macmillan Cancer Support and ours Teenage Cancer Trust. “Let’s raise money for charity, not lawyers #caterpillarsforcancer.” Aldi is calling on other supermarkets to join it and M&S in raising money or cancer charities through the sale of caterpillar cakes.
Poundland rolls out chilled & frozen offering to another 46 shops
Poundland has started rolling out its chilled and frozen food offer to another 46 stores as part of wider ambitions to bring the offering to a total of 250 stores by early autumn. Work on converting the 46 stores in question will kick off this week in phase III of the rollout of what is known internally as Project Diamond Ice. Poundland said the current rollout will take the number of stores now with a chilled and frozen food offering to 175. The retailer added that another 70 stores will have chilled and freezer cabinets installed in Phase 4, with the scheme slated to get underway in July. Poundland said that within two years, around 500 of its stores will have a chilled and frozen food section. The new ranges were installed at Hinckley and Salford stores at the end of March and this week work will begin on stores in Streatham, Gillingham, Worthing, Cowley and Thanet and the new Birmingham St Andrews store. Six new stores – details to be announced – are also included in the schedule for May and June. Items in the range include everyday meals and snacks, including ready-meals, pizzas and pies, as well as frozen desserts and ice-cream. The new chilled and frozen ranges were developed in partnership with Fultons Foods, the frozen food retailer that Poundland acquired last October. “The past year has shown how important Poundland stores are to their local communities and providing a range of chilled and frozen food means our customers can get more of what they need in one shopping trip,” Poundland retail director Austin Cooke said. “Where we’ve given stores a makeover, the feedback has been tremendous. Shoppers love the extended ranges, and not just in chilled and frozen, and they really like the store layouts and the work we’ve done to make it easier to shop and check out.”
Amazon could soon overtake Co-op to become UK's 6th largest grocer
Amazon could soon become the sixth largest grocer in the UK as it becomes a “double threat with the launch of Amazon Fresh”.
According to new data from technology consultancy TWC, Amazon is poised to make a significant share steal of the grocery market over the coming months as it continues its rapid roll out of physical stores across the UK.
Its Trends Spring 2021 Report suggests that if customers swapped just one grocery shop per month to Amazon, it could overtake Co-op to become the UK’s sixth largest grocer.
Currently Co-op accounts for around 6.2 per cent of the market, ahead of Lidl’s 5.8 per cent but behind its discounter rival Aldi’s 7.8 per cent.
TWC believes that major supermarkets could soon lose loyalty from younger generations and more affluent shoppers, who are increasingly favouring convenience over price.
“Here at TWC, we believe that although Amazon is discussed a lot as a threat to our channel, the fact that 72% of the population has an account really emphasizes that threat,” TWC’s development manager Tom Fender said.
“And now, it is a double threat with the launch of Amazon Fresh and a triple threat with its investment in Deliveroo.
“Their online platform may not impress Gen Z but their food to go and delivery solutions are sure to be winning hearts and minds in this consumer cohort.”
Fender continued that Amazon has a significant advantage over its rivals thanks to its in-depth customer data, something “many people in retail overlook”.
Its comes after Amazon opened the doors to its third physical Amazon Fresh grocery store in London in just two months.
Amazon Fresh has now opened in White City, one of London’s busiest shopping destinations which hosts Europe’s biggest shopping centre Westfield London.
Like its two other Fresh stores in Ealing and Wembley Park, opened on March 4 and March 16 respectively, the new store will feature Amazon’s flagship “Just Walk Out” shopping’ technology.
The 2500sq ft store uses “computer vision, deep learning algorithms and sensor fusion” to automatically detect any items a customer puts in their shopping basket or returns to the shelf.
230 jobs at risk as Argos closes Somerset distribution site
Argos has announced plans to close down its Somerset distribution site early next year, a move that will place 230 jobs at risk. The retailer’s owner, Sainsbury’s, confirmed that the Bridgewater depot was one site set to be affected as part of plans to integrate the logistics networks for the two brands. Last year, Sainsbury’s said some distribution sites would be impacted by a move to streamline logistics operations for the Sainsbury’s, Argos and Habitat fascias into one network. The supermarket group said it would look to redeploy workers impacted by the announcement elsewhere in its operations. “Last year we shared plans to accelerate the integration of the Sainsbury’s and Argos logistics networks and confirmed a number of our existing depots would close,” a Sainsbury’s spokeswoman said. “Our Bridgwater depot is one of the sites affected and we are supporting the teams in any way we can. “This includes exploring redeployment opportunities for our colleagues within Sainsbury’s.” The Unite union said it was “committed to fight to save as many jobs as possible” after the site was earmarked for closure. Unite regional officer Tim Morris said: “Our members at the Argos Bridgwater distribution centre have continued to work throughout the pandemic and their reward for this dedication, is to face losing their jobs. “Unite will be holding an urgent meeting with the company to better understand why this announcement has been made. “The union will fully engage in the consultation process and will explore all options to preserve as many jobs as possible in Bridgwater or at alternative locations.” The news comes a month after Sainsbury’s said that around 1150 jobs would be affected as part of a restructuring which included about 500 head-office roles being axed.
Primark boss defends decision not to launch online despite 90% profit drop
Primark’s boss has once again defended the company’s reluctance to launch online despite profits plunging 90 per cent over lockdown.
Primark’s parent company Associated British Foods (ABF) yesterday celebrated record sales in the week following the reopening of non-essential retail stores.
Despite last week’s sales spike, which often saw queues for Primark stores stretching the length of the high street, Primark reported losses topping £1.1 billion over the last six months as its stores remained shut during the UK’s longest lockdown to date.
In the face of staggering losses, ABF’s chief executive George Weston once again defended the fashion retailers decision to remain a pureplay physical retailer stating that last week’s footfall “gives us every indication that millions of other people want to get back on the high street”.
“It’s where we go for coffee, to meet friends, to see a movie, go shopping, touch and feel clothing,” he added.
“I personally don’t want to live my life behind a screen. I think all of that is just a normal part of life, a permanent part of being human really.”
Primark has come under fire from investors before about it reluctance to launch online, arguing that it’s model simply couldn’t operate with the additional delivery costs associated with ecommerce.
Weston explained: “Our cost advantage comes from the fact that we are a bricks and mortar retailer which has neither the picking up costs, nor the distribution costs, of an online retailer.”
In January, as the UK’s third national lockdown began, director of discount online retailer offeroftheday.com Rick Harris warned that Primark’s loyal fanbase would not remain so forever, and months without being able to shop with Primark could force customers to turn elsewhere.
“If truth be told, the resistance to move online is no doubt in part due to there not being a large enough margin in their clothes to justify a high level of return,” he said.
“Customers will only remain loyal for so long though; could this be the start of the end for Primark?”
On the news of Primark’s successful reopening last week, Hargreaves Lansdown’s Susannah Streeter commented: “Primark has been lost in the retail jungle during the pandemic, left stranded by repeated Covid closures.
“Without an online crutch to lean on, it’s been a harsh environment during lockdowns with a £1.1 billion hit to revenues. Even when stores were open, social distancing meant like-for-like sales were 15 per cent lower.
“Primark’s powerful social media presence has been key to its success in drawing shoppers back in, with 8.7 million followers on Instagram alone. For now it seems, this leopard won’t be changing its spots when it comes to its online strategy, with no plans to open a digital store.”
Carphone Warehouse shuts down all Irish stores
Carphone Warehouse is to shut 81 stores in the Republic of Ireland, a move that result in the loss of almost 500 jobs. Parent company Dixons Carphone confirmed yesterday that it would close 69 of its standalone stores and 12 stores within outlets. Staff were informed about the closures, the company said. Carphone Warehouse said that customers are changing the way they buy mobile devices. It added that customers were replacing their handsets less often and were buying them separately or as part of more flexible bundles. “Although these changes in behaviour were anticipated, they were expected to occur over a longer period of time,” Dixons Carphone said in a statement. “However, the change in shopping behaviours has been accelerated by the pandemic. “Carphone Warehouse Ireland colleagues have worked hard to make Carphone Warehouse Ireland a success and have been the driving force behind its well-earned reputation for excellent customer service and support. “This difficult decision is no reflection on their commitment, dedication, and professionalism.” The news comes just over a year after Dixons Carphone announced a similar store closure scheme in the UK. In March last year, just days before the nation entered its first nationwide Covid-19 lockdown, it was announced that all 531 Carphone Warehouse stores in the UK would shut down as part of the ongoing overhaul of Dixons Carphone’s mobile arm. The UK store closures resulted n 2900 job losses.
Gear4music sales smash £157m as Brits turn to musical instruments
Gear4music has witnessed a full year sales rise of 31 per cent to £157.5 million thanks to an increase in people playing musical instruments during Covid-19 lockdowns. UK sales jumped by 27 per cent in the 12 months to March 31, while sales in Europe and the rest of the world were also strong with an uplift of 35 per cent. The online musical retailer now expects its full year EBITDA to come in ahead of market expectations at no less than £19 million – compared to £7.8 million in the previous year. “I am very pleased to be reporting results that are ahead of our previous expectations, representing a transformational FY21 trading performance for the group, and building on the significant progress we made in FY20,” Gear4music chief executive Andrew Wass said. “Further improvements in gross margins have driven our profits to record levels, amplified by the previously reported exceptional sales growth and marketing efficiencies which were driven by Covid-19 lockdowns, particularly evident during Q1 FY21. “Whilst it is still very early in the new financial year, we are pleased with FY22 trading to date, relative to the exceptional period of trading during April FY21. “We also remain mindful of the ongoing global pandemic and operational challenges posed by Brexit, but are confident that we have appropriate plans in place to mitigate their effects. “Underpinned by our strong financial position, the board is confident that our online business model and specialist market knowledge, supported by our Europe-wide operational platform, will continue to deliver long-term sustainable and profitable growth.” During the year, Gear4music signed a new £35 million three-year revolving credit facility with HSBC. The company said this will be used to accelerate its growth strategy which will include strengthening its European distribution network, investing in its ecommerce platform and considering acquisition opportunities as they arise.
2000 Co-op staff affected by store management overhaul
The Co-op is overhauling its store management structure in a move that will impact more than 2000 staff. The grocery and convenience retailer revealed it was cutting four layers of managers in each store down to three following a successful trial in around 300 shops over the past two years. It will axe the role of team manager across its 2600 stores, but stressed there would be no compulsory redundancies. The retailer added that each impacted staff member would offered an alternative role as team leader. The new three-tier management structure – which is set to be in place by the end of May – will comprise store manager, team leader and customer team leader. The Co-op said those that choose to take the role of team leader will have their pay protected for six months. It added that team managers would also be able to apply to become trainee store managers, with the potential to take part in a development programme, or other roles within the group. The Co-op said where trialled in stores so far, the new management structure had “successfully given store colleagues more time to serve customers and members in our communities”. The retailer, which employs around 50,000 staff across its food stores, began a 45-day consultation with impacted staff this week. “Our aim at Co-op is to serve and support our communities, giving our customers the best possible shopping experience,” a Co-op spokesman said. “As we move our stores over to a three-tier management structure, protecting jobs is a continuing key priority and we are pleased to be able to offer alternative positions to all the colleagues affected. “These changes will free up store colleagues to give our customers great service from efficient and well-run shops.” The move comes after the Co-op Group revealed just two weeks ago that annual profits after tax and discontinued items more than doubled to £77 million, with like-for-like food sales at its retail arm up 6.9 per cent. The Co-op said on reporting the full-year figures that it would repay the UK Government £15.5 million it received in furlough support at the height of the pandemic, but stopped short of handing back the £66 million it secured in business rates relief.
John Lewis founder's great grandson receives £1.54m golden handshake
The great grandson of the founder of John Lewis has received a farewell cheque of just over £1.5 million, a sum that exceeds the annual salary of the retailer’s chairman. According to its annual report published today, the John Lewis Partnership is handing Patrick Lewis, the last remaining member of the family in the business, a pay out worth £1.54 million. Lewis, who spent more than 26 years at the partnership, stepped down as finance director late last year following a head office shake-up that led to 1500 job cuts. He has since been replaced by Bérangère Michel, formerly John Lewis’s director of customer service. Although Lewis has been on leave since December, his official departure date is not until June. His golden handshake includes payment for loss of office and contributions towards legal fees as well as cash in lieu of salary, car, pension and other benefits for the remainder of his contractual notice period. Lewis’ payoff also exceeds the annual salary package for Dame Sharon White, the partnership’s chairman, who earned just over £1 million last year despite taking a 20 per cent cut to her base salary for three months amid the Covid-19 pandemic. White, who joined the retail giant just weeks before pandemic plunged the UK into a series of lockdowns, earned £947,000 in her base salary for 2020. This was topped up by £115,000 in payments in lieu of a pension and £5000 in other benefits including a car allowance and healthcare. Along with every other staff member in the John Lewis Partnership, White’s pay did not include an annual bonus last year. Her total pay package was around £400,000 less than what Sir Charlie Mayfield received in his final year as chairman. Mayfield did not receive any payoff. The John Lewis Partnership also spent almost £2 million on paying off the former bosses of John Lewis and Waitose – Paula Nickolds and Rob Collins – as part of a board restructure last year. They have since been placed by Pippa Wicks and James Bailey, respectively. The executive payments come a month after the John Lewis Partnership it posted a £517 million full-year pre-tax loss – compared to profits of £146 million the previous year. Since the pandemic struck in March last year, the partnership has announced the closure of 16 John Lewis stores, affecting more than 2600 staff, and updated its transformation strategy with a focus on digital investment and repurposing existing store space. While the partnership’s department store arm has struggled over the past year or so, its stablemate Waitrose has fared well due to its status as an essential retailer.
Frasers Group ordered to reinstate Jenners signs on Edinburgh landmark
Frasers Group has been ordered to reinstate the letters of the Jenners sign after they were removed from the Edinburgh landmark. City of Edinburgh Council has issued a formal notice to the Mike Ashley-owned retail firm, over work “executed to the listed building… having regard to the effect of the works on the character of the building as one of special architectural or historic interest”. Jenners has been a landmark department store on Princes Street for more than 180 years, previously trading as an independent retailer until it was acquired by the Al-Fayed family – then-owners of House of Fraser and also former owners of Harrods – in 2005. Unlike other acquisitions that saw a rebrand and rename, Jenners managed to keep its identity – although it was still considered and traded as a House of Fraser site nonetheless. House of Fraser has been owned by Frasers Group since August 2018, when it was acquired in a pre-pack administration deal. The City of Edinburgh alleged that Ashley’s company “without listed building consent” removed “the individual letters forming ‘Jenners’ located at high level on both the eastern (South St David Street) and southern (Princes Street) elevations”. The council said the firm was required to “reinstate the letters to their original location on the eastern and southern elevations of the department store to form the name ‘Jenners’”. Another section of the notice confirms the letters are intact and are “currently stored in the department store”. Frasers Group has been given three months to comply after the notice takes effect on May 14. Ashley can appeal against the notice, but the council said “any appeal must be received, or posted in time to be received, by Scottish ministers” before that date. Retail Gazette has contacted Frasers Group for comment. Earlier this year Frasers Group announced it would permanently shut down the iconic Jenners store after it failed to reach an agreement with the owner of the building, Anders Povlsen, to continue the tenancy. The closure, slated for May 3, will lead to the loss of 200 jobs.
Nike named world's most valuable apparel brand for 7th consecutive year
Nike has taken the top spot for the seventh consecutive year in a list of the world’s most valuable apparel brands. According to the annual Brand Finance ranking, Nike’s value has fallen by 13 per cent to $30.4 billion due to the challenges of Covid-19 despite its top spot. Nike’s sales took a hit last year due to enforced store closures but it “saw an impressive untick in online sales”. Brand Finance uses various metrics to come up with its figures, which include actual sales and profits. “2020 was undoubtedly a tough year for the apparel sector,” Brand Finance managing director Richard Haigh said. “Global and widespread economic disruption caused a sharp decrease in demand and lockdown-induced store closures forced brands to digitalise quickly or face dire consequences to sales and profits. “Despite the total brand value of the world’s top 50 most valuable apparel brand declining eight per cent year-on-year, on the whole we have witnessed remarkable agility and innovation across the sector, which will no doubt stand brands in good stead in the coming year.” The total value of the world’s top 50 most valuable apparel brands declined by eight per cent last year, down from $301.9 billion in the 2020 report to $276.4 billion as of January this year. Meanwhile, the report added that brands to watch are Fila and Bosideng, but Tapestry’s Coach was the sector’s fastest falling brand, with its brand value down 31 per cent. Rolex was the world’s “strongest apparel brand” with a Brand Strength Index (BSI) score of 89.6 out of 100. Behind Nike on the overall list was Gucci in second place with a brand value of $15.6 billion, down 12 per cent from 2020. The rest of the top 20 were Louis Vuitton, Adidas, Chanel, Zara, Uniqlo, H&M, Cartier, Hermès, Rolex, Dior, Tiffany, Chow Tai Fook, Coach, The North Face, Anta, Victoria’s Secret, Omega and Puma. The apparel ranking is divided into sub sectors: luxury; sportswear; fast fashion; watches, accessories & jewellery; high street designer; underwear; and footwear. Fila became the fastest-growing brand in this year’s Brand Finance Apparel 50 ranking following a 68 per cent brand value increase to $2.7 billion. Timberland and Bosideng were the second and third fastest-growing brands, up 47 per cent and 39 per cent respectively. Brand Finance said that in the UK, Burberry was 21st in the global ranking but lost 26 per cent of its brand value. Meanwhile, Asos and Boohoo saw their values rising by 38 per cent and 22 per cent respectively.
Retailers cautious after Westfield owner wins unpaid rent court case
Retailers have expressed concern after the High Court ordered The Fragrance Shop to pay Unibail-Rodamco-Westfield £160,000 in unpaid rent and service charges that accrued during the pandemic. The High Court gave judgment last week on the first case where a “Covid defence” has been raised for non-payment of rent. The Fragrance Shop took a five-year lease of premises at Westfield London in July 2019 at an initial rent of £200,000 a year, but in a “side letter” agreed to an aggregate of a £180,000 per year base rent plus turnover rent. The retailer remained closed to the public from March 26 last year to June 15, between November 5 and December 2, and from December 19 to April 12. The Fragrance Shop has not paid any rent since April 2020. The monthly service charge for April, May and June 2020 is also outstanding. Fund manager Commerz Real Investmentgesellschaft, which owns the centre in a joint venture with Unibail-Rodamco-Westfield, sought payment for rent amounting to £166,884 (inclusive of VAT) and interest at the contractual rate. Chief master Matthew Marsh at the High Court granted Commerz Real Investmentgesellschaft summary judgment in its claim against the perfume retail chain, TFS Stores, without the need for a full trial. However, the ruling has led to concerns for many retailers as unpaid rents continue to pile up. Unibail-Rodamco-Westfield chief operating officer UK, Scott Parsons said the impacts of the past year, which has seen the industry endure months of government imposed closures, has created “unprecedented challenges for both retailers and landlords”. “Over that time, Unibail-Rodamco-Westfield has put in place a number of support measures, such as moving to monthly payments, deferred rents and reduced service charges,” he said. “However, rent collection remains an issue and the government moratorium is not helping as it encourages ‘can pay, won’t pay’ behaviour. “Ultimately, our strategy is to work with those who engage with us to reach a fair and positive outcome for all and for those who refuse to engage, we have been forced to take stronger action.”
Frasers Group ordered to pay rent arrears
Mike Ashley’s Frasers Group has been ordered to pay rent arrears built up since the beginning of the Covid-19 pandemic. The High Court has ruled against the Sports Direct owner in its clash with landlords over arrears during enforced store closures. Master John Dagnall awarded landlords AEW UK Reit and Bank of New York Mellon (International) summary judgment in their claims for an undislosed amount of unpaid rent relating to a Sports Direct store in Blackpool. He said that the voluntary code of practice for commercial property relationships during the pandemic was no obstacle to bringing a claim for unpaid rent. “I do not see that the existence of a voluntary code encouraging negotiation should in any way obstruct a claimant who contends that they have a clear case seeking summary judgment. “Assuming that such a clear case is made out, from obtaining it at this point, I regard the code both as being outside the litigation process and not applicable to these tenants who are not said to be unable to pay,” Dagnall said. “The situation of Covid and the Covid Regulations has (at least in modern times and as a matter of degree) been unprecedented and, in particular, with regard to its effect upon the entertainment (and hospitality) sector but also the nonessential retail sector which has been deprived of the turnover which is the lifeblood of their businesses (and especially where there is no online equivalent). It is impossible not to feel sympathy for them.”