Arcadia brand Evans sold to Australia's City Chic Collective
Arcadia’s administrators on Monday announced the sale of Evans’ brand, commerce and wholesale business to City Chic Collective for £23 million. City Chic will acquire Evans’ brand and intellectual property, its customer base and inventory under the terms of the deal which is expected to be completed on December 23. Crucially City Chic will not be purchasing Evans’ store network, with Arcadia’s administrators at Deloitte stating that the stores would continue to trade for the time being. “The process to secure new owners for the other Arcadia Group brands is ongoing. There have been significant expressions of interest for all brands. The Joint Administrators expect to provide a further update in the new year,” Deloitte said in a statement to press on Monday. Founded in 1930, Evans now has five standalone stores in the UK, with around 100 locations where Evans clothing is sold within larger multi sites and concessions. The retailer sells plus-size clothing for women from sizes 14-32, as well as lingerie and accessories. Deloitte noted that in the financial year to August 2020, the Evans website had 19 million visits and generated approximately £23 million of sales. Although little-known in the UK, City Chic Collective operates as a global omni-channel retailer specialising in plus-size women’s apparel, footwear and accessories, with 96 stores across Australia and New Zealand.
Mike Ashley's Frasers Group issues profit warning
Mike Ashley’s Frasers Group has issued a profit warning after scrapping its guidance of a 20 per cent to 30 per cent rise in profits this year. The retailer, which includes high street names including Sports Direct, House of Fraser, Evans Cycles and Game Digital, had only made the commitment earlier this month. However, the restrictions – which affect London and southeast of England – will impact the business, with many stores forced to close to customers. Despite this, staff in stores are still expected to go in to fulfil click-and-collect orders. “Given this is a peak trading period, and combined with the high likelihood of further rolling lockdowns nationwide over the following months at least, such is the uncertainty of when stores can and cannot open that the board of Frasers Group plc can no longer commit to Frasers Group achieving its publicised guidance,” Frasers Group said. Earlier this month, the company revealed that pre-tax profits rose by 17.6 per cent to £106.1 million at Frasers Group, in the half-year to the end of October. The retailer said it had benefited from the business rates holiday, although revenues fell 7.6 per cent to £1.89 billion due to the six weeks of store closures in the first lockdown. On Thursday, Frasers Group announced that it would not buy a stake in handbag maker and luxury fashion retailer Mulberry, after building up a 36.8 per cent stake in the business.
Debenhams gift cards expire as Mike Ashley considers empty stores
Debenhams stopped accepting gift cards on Sunday night after the store confirmed it will no longer be accepting them after December 20. “From midnight Sunday 20th December 2020, Debenhams will no longer be accepting Debenhams gift cards, e-gift cards or vouchers on line or in stores,” said a statement on the beleaguered retailer’s website. Elsewhere sources cited by The Mail on Sunday said Mike Ashley could be considering moving his ever-expanding retail empire into empty Debenhams stores. The strategy would form part of a deal to acquire Debenhams, which the sources said would include its online division. By using the empty stores, it’s thought to be an easier approach for Ashley in converting unused Debenhams outlets into his own brands, include House of Fraser, Sports Direct and Flannels. The process of taking what landlords call ‘vacant possession’ would also mean he could avoid redundancy costs for existing staff. It is not yet known how many of Debenhams’ 124 UK stores Ashley is considering, although The Mail on Sunday said even if the retail mogul acquired 30 to 40, another 90 would still be likely to face closure. Debenhams is currently being run by administrators Geoff Rowley and Alastair Massey at FRP, and launched a “closing down sale” last week. The department store chain is offering up to half price off many items and even up 70 per cent off some in its physical stores and via its online business. The closing down sale means that its UK stores and the website are continuing to trade. However, it has been reported that the liquidation should be complete by the end of this month.
Sainsbury's warns of food shortages following France ban
Sainsbury’s has warned that food may begin to disappear from its shelves within days after France’s ban on freight from the UK. The grocer said there would be shortages on products including lettuce, salad leaves and cauliflowers if transport ties with France are not restored immediately. Despite the warning, Sainsbury’s ensured it had “plenty” of products needed for “the Great British Christmas lunch”. The Food and Drink Federation (FDF) said that fresh food supplies face “serious disruption” over Christmas. France has not banned lorries from travelling into the UK but concerns have risen that hauliers will not want to enter the country if they cannot return home. “We are sourcing everything we can from the UK and looking into alternative transport for product sourced from Europe,” Sainsbury’s said. “If nothing changes, we will start to see gaps over the coming days on lettuce, some salad leaves, cauliflowers, broccoli and citrus fruit – all of which are imported from the Continent at this time of year. “We hope the UK and French governments can come to a mutually agreeable solution that prioritises the immediate passage of produce and any other food at the ports.” BRC food and sustainability director Andrew Opie said the situation “poses difficulties for UK capacity to import and export key goods during the busy Christmas period”. “While goods can enter from France, few haulage firms will be willing to send trucks and drivers across to the UK without a guarantee they can return to the EU in a timely manner,” he said. “This is a key supply route for fresh produce at this time of year: the channel crossings see 10,000 trucks passing daily during peak periods such as in the run-up to Christmas. “We urge the UK government and the EU to find a pragmatic solution to this as soon as possible, to prevent disruption for consumers. “Retailers have stocked up on goods ahead of Christmas which should prevent immediate problems. “However, any prolonged closure of the French border would be a problem as the UK enters the final weeks before the transition ends on 31 December.”
Tesco warns shoppers not to panic buy after France ban
Tesco has issued a warning after shoppers were seen panic-buying following France’s decision to close borders. The Big 4 grocer ensured households it has plenty of food for Christmas and has also encouraged customers to “shop as normal”. Tesco is currently looking at using ferries direct from Spain and increasing stock from the UK to deal with the disruption. However, it warned that “there may be reduced supply on a few fresh items, such as lettuce, cauliflower and citrus fruit later this week, but we don’t expect any problems with availability on these lines today or tomorrow”. “We’ve been building our stockholding of key products ahead of the Christmas peak and are working closely with our hauliers and suppliers to continue the supply of goods into our stores,” Tesco said. “We’re doing everything we can to limit the impact for our customers.” The supermarket rush on Monday was prompted by news that the French had imposed a 48 hour ban on travel from the UK in a measure that includes freight. Moreover, those in the new tier system added to the shopping spree as they also hit stores early to buy Christmas supplies after the ban came into practice on Sunday. On Monday, fellow Big 4 grocer Sainsbury’s warned that food may begin to disappear from its shelves within days after France’s ban on freight from the UK. The grocer said there would be shortages on products including lettuce, salad leaves and cauliflowers if transport ties with France are not restored immediately. Despite the warning, Sainsbury’s ensured it had “plenty” of products needed for “the Great British Christmas lunch”. “If nothing changes we will start to see gaps over the coming days on lettuce, salad leaves, cauliflowers, broccoli, citrus fruit – all of which are imported from EU at this time of year,” Sainsbury’s said. “We hope UK and French governments can come to a solution that prioritises immediate passage of produce and food.”
Royal Mail halts deliveries to mainland Europe
The Royal Mail has stopped deliveries to mainland Europe, Canada and Turkey due to a UK travel ban caused by a new strain of coronavirus.
A statement on the Royal Mail website said it had temporarily suspended some international services due to impacts from coronavirus.
With the exception of the Republic of Ireland, Royal Mail said it had temporarily suspended all mail services to Europe, adding that it was keeping the situation “under close and constant review”.
“We’re working with our airline and postal/courier partners across the globe to maintain services, however delays should be expected. Many countries have implemented special measure to combat the spread of Coronavirus COVID-19, especially for signature service to maintain social distancing. The number of countries we can access is changing daily,” Royal Mail posted on its website on Monday.
In a separate update regarding postal services in the UK, Royal Mail noted that the pressure of ongoing lockdowns and the rise in online shopping has meant a huge rise in numbers of parcels and deliveries being sent through its network.
The company said it could not guarantee special delivery items would arrive before December 23 due to the tighter coronavirus restrictions in England that were introduced over the weekend.
“The combination of greatly increased uptake of online Christmas shopping, in no small part driven by the recent lockdown, and the ongoing COVID restrictions mean that all delivery companies are experiencing exceptionally high volumes this year,” the company said in a statement on its website posted on Tuesday December 22.
Elsewhere Deutsche Post said it wold need to temporarily suspend services to Britain and Ireland.
“We have sadly been forced to impose a complete stop on deliveries for private and business packages and goods-bearing letters to Great Britain and Ireland until further notice”, said a spokesperson for Deutsche Post DHL.
M&S extends Christmas refund period
Marks & Spencer has extended its Christmas refund period in response to the latest government guidance. For purchases made between October 4 and December 27, 2020, items can now be returned up until the extended date of January 31, 2021. The last date for M&S refunds was previously January 10. This change applies across the whole of the UK. M&S said it continues to offer one of the longest returns periods on the high street at 35 days.
Online purchases now account for up to 70% of John Lewis sales
Purchases made online accounted for up to 70 per cent of sales at John Lewis this year, as the retailer reported back on its Shop, Live, Look consumer report for 2020.
Examining customer trends in the past 12 months, John Lewis found customers were now using their working day to shop online, with peaks at 11am-4pm, as opposed to in the evening between 7-10pm.
Online now accounts for 60-70 per cent of John Lewis sales whereas before the pandemic it was only 40 per cent.
Elsewhere the department store retailer said it had seen a 55 per cent rise in people sending JL.com orders as a gift.
Looking ahead, John Lewis said it expected to see a baby boom in 2021, with searches for ‘new baby’ on its website up 274 per cent in December.
The retailer said it expects customers to also be looking to upgrade their living space and technology after the national lockdowns of 2020 and beyond.
“The world is a very different place than it was in January. This year we stayed in, hunkered down, decked out and spruced up our homes,” John Lewis trading director Simon Coble said.
“At John Lewis, we’ve been quick to change the way we help our customers – from the launch of virtual services bringing our Partners’ expertise directly into their homes to offering them more local and convenient places to pick up their Click & Collect purchases.
“While this extraordinary year is drawing to a close, there are many lessons we’ve learned, from embracing time spent with loved ones to enjoying the simpler things in life which will stay with us for the future,” Coble added.
Ed Miliband calls for High Street fightback fund in the wake of Tier 4
On Tuesday night Labour issued a call for the government to “stand up for businesses and ensure those hit by unexpected Tier 4 restrictions” with the proposal of a Hospitality and High Street Fightback Fund. In a report on Labour’s website, the party argued that almost 175,000 businesses across Tier 4 areas in London, the South East and the East of England have been affected by last-minute instructions to close, including more than 13,000 hairdressers and beauty salons, more than 8,600 gyms and leisure centres, and more than 45,000 retail businesses including clothes shops, homeware and book shops. They pointed out that many of those businesses had paid for stock or taken final bookings for the Christmas period. Labour said it is calling for the £2 billion in funding recently returned to the Treasury by supermarkets from their business rates relief to be redeployed into a Hospitality and High Streets Fightback Fund to help struggling businesses on the high street and those excluded from support. “Businesses are facing a Christmas nightmare on the high street, forced to close at the last minute by Tier 4 restrictions,” Labour shadow business secretary Ed Miliband said. “Many shops, leisure and beauty businesses just getting back on their feet have had the rug pulled from under them, joining struggling restaurants and pubs already shut. “Businesses are doing the right thing and closing to keep people safe, but Ministers are not doing the right thing by them. We need these businesses on the other side of the crisis but the support is hopelessly inadequate, and the Business Secretary seems to be asleep at the wheel. “The government can’t keep leaving businesses in the lurch like this. Ministers must urgently boost support for closed businesses through a Hospitality and High Street Fund to save businesses and jobs now,” Miliband added. The government’s announcement that it would place large swathes of the south and east of England under a new Tier 4 lockdown came with little warning for retailers last Saturday. The restrictions closed non-essential shops, which alongside a new lockdown in Wales, is thought to be costing retailers £4 billion in lost trade this Christmas.
Advertising watchdog bans irresponsible Klarna adverts
The Advertising Standards Authority has upheld claims made against a series of Instagram posts promoting Klarna Bank’s deferred payment services.
The ASA on Wednesday ruled that Klarna could not show a series of adverts made with Instagram influencers that links using Klarna’s credit service with improving someone’s mood.
While the first stages of the coronavirus pandemic hit the UK in April and May this year, Klarna engaged a number of Instagram influencers with paid advertising to discuss using its services to improve their mood during lockdown.
The ASA received a complaint from the Labour MP Stella Creasy that the promotional Instagram posts were irresponsible for encouraging the use of Klarna’s deferred payment service to help people lift their low mood whilst the nation was under lockdown.
Klarna said it believed the four adverts complied with the CAP Code and were not irresponsible, and said the key theme was to take care of one’s self during the coronavirus lockdown period.
They said the ads were intended to highlight that self-care, skincare routines and pampering could be beneficial for improving one’s mental health and staying entertained during the lockdown period.
Where references to lifting one’s mood were made, Klarna said these were in reference to using a beauty product or taking care of one’s self.
The Swedish bank argued that the posts did not infer that using Klarna lightened one’s mood. Klarna confirmed that the four Instagram posts were the result of a paid engagement with each influencer.
Klarna went on to add that during the lockdown period they were sensitive to the tone of the influencers’ posts, removed all commercial calls to action and asked them to focus on contributing in positive ways to their community.
The buy now, pay later-specialist also highlighted that the call to action in the three posts was not to use Klarna’s services, but to highlight a competition which gave consumers the opportunity to win £500 worth of beauty products.
The ASA upheld the complaints made against Klarna, stating that in the context of the national restrictions, all four of the adverts “made references to purchasing beauty or clothing items to help with ‘lifting’ or ‘boosting’ one’s mood during the pandemic and lockdown, in association with Klarna.”
“We acknowledged that purchasing non-essential items was likely to be a source of comfort for some people during the national lockdown,” the ASA said.
“However, each ad promoted the use of Klarna’s deferred payment services, and we considered that the respective influencers had linked buying beauty or clothing products through this service with enhancing their mood during an uncertain and challenging period, when many people were experiencing difficult circumstances and isolation during the lockdown, including financial concerns and mental health problems,” the ASA added.
The ASA concluded that in the context of the challenging circumstances caused by the lockdown at the time, including impacts on people’s financial and mental health, the ads irresponsibly encouraged the use of credit to improve people’s mood, breaching its Committee of Advertising Practice Code for social responsibility.
Retailers to face supply issues despite boarder backlog clearance
The retail sector has been warned over supply issues for some fresh goods until the backlog of trucks at Dover is cleared. The BRC said thousands of trucks have been stranded in Dover after France closed its borders earlier this week. The border closure came after a new highly-infectious coronavirus variant was found in the UK. The closure has stopped the movement of some goods, including fresh foods, between Europe and the UK. But the UK and French governments have reached a deal to reopen the border between the two countries to hauliers and some passengers from today, provided they test negative for Covid-19. However, the backlog of lorries waiting to make the crossing could take days to clear. “The deal was good news for consumers but it is essential that lorries get moving across the border as quickly as possible,” BRC food and sustainability director Andrew Opie said. “Until the backlog is cleared and supply chains return to normal, we anticipate issues with the availability of some fresh goods.” The closure has led to a rise in customers panic-buying. Tesco reintroduced rationing rules on several products, following an increase in customers stockpiling. The grocer’s UK chief executive Jason Tarry ensured that customers will have enough stock to get them through Christmas and the new year despite the ongoing closure of French and Belgian ports. Waitrose said its stock levels “remain strong” and it is continuing with limits on a “very small number of products online”. Morrisons and Aldi both said they had no plan to introduce limits, with Aldi adding that its stores were “fully stocked”.