ASOS relaunches Topshop online after £295 rescue
Asos on Sunday relaunched Topshop on its website after spending £295 million snapping up the fashion retailer three weeks ago. A banner on Asos’ homepage says ‘Topshop is now a part of Asos!’, adding that shoppers should ‘stay tuned, the full collection is coming soon…’. Over in Topshop’s dedicated brand section, a headline banner states ‘Topshop is now officially an ASOS brand!’. Although Asos has previously sold Topshop items through its online platform, the relaunch is exclusive to Asos’s website, meaning it will be the only place shoppers can now buy Topshop products. Asos will also relaunch Acadia brands Miss Selfridge and Topman, although it is not yet known when they will appear online. The online-only retailer paid £265 million for the brands and £30 million for stock. Elsewhere, The Mail on Sunday reported that online rival Boohoo could be a surprise contender for Arcadia’s Daventry distribution centre which employs 700 staff. Sources cited by The Mail on Sunday said Boohoo is keen to do a deal in the next week, to ensure it can secure the jobs at the warehouse. It is also understood that Boohoo could create a further 1,000 jobs as part of an agreement to acquire the Northamptonshire site.
M&S to begin rolling our new clothing brand tie-ups online from Thursday
Marks & Spencer will begin to launch ranges from Joules, Phase Eight, Hobbs, Seasalt, Ghost, Jaeger and Finery London on its website from Thursday February 25, according to The Mail on Sunday. In a move being described as the biggest overhaul of M&S clothing in 20 years, the high street retailer will sell third-party fashion brands across its online platform, as it looks to compete with Next, Asos and Boohoo. From Thursday, M&S will start selling an exclusive range from Finery London, owned by entrepreneur and Dragon’s Den star Touker Suleyman, The Mail on Sunday reported. It will then begin to roll-out ranges from Joules, Phase Eight, Hobbs, Seasalt, Ghost and Jaeger from March, and in stores when they are set to reopen in April. ‘I’ve already seen the changes happening at M&S and I feel very bullish about where they are now,’ Suleyman told The Mail on Sunday. ‘They were dipping their toe in the water [selling third party fashion brands] last year and now they’ve got a platform ready, a database to work from and a list of brands to launch,’ Suleyman added. M&S purchased the Jaeger brand, products and supporting materials last month as part of a £5 million acquisition deal with administrators of the collapsed Edinburgh Woollen Mill Group in January. The news comes two weeks after M&S announced two new appointments to the senior leadership team of its clothing and home division in the wake of its recent Jaeger takeover. Anna Braithwaite has been appointed clothing and home marketing director, while Fiona Lambert will join M&S as the managing director of Jaeger.
Clarks CEO Giorgio Presca exits abruptly
Clarks has reportedly seen several members of its executive team step down from the business. Several C-suite directors exited the business last week, including chief executive Giorgio Presca, chief commercial officer Massimo Barzaghi and chief people officer Difna Blamey, who joined Clarks on a temporary contract last year. Clarks non-executive director, former Guess chief executive Victor Herrero will take on a dual role of executive chairman and chief executive. Hong Kong-based private equity firm LionRock Capital acquired a majority stake in Clarks at the end of last year. LionRock Capital is currently appointing a new management team. In November, the footwear retailer said that 90 per cent of its creditors – which include landlords – have voted in favour of its CVA proposals. Group revenue at Clarks fell 6.4 per cent year on year to £1.37 billion, in the 52 weeks to February 1, 2020. Clarks attributed the decrease to challenging trade across the UK, Ireland, Europe and the US. It reported a profit after tax of £17.2 million, a 120 per cent increase on the previous year. Underlying operating profit jumped 53.5 per cent to £46.2 million and its adjusted underlying profit was up 105.5 per cent to £45.2 million.
Shoe Zone finance boss Peter Foot runs to exit
Shoe Zone finance director Peter Foot has unexpectedly stepped down from the company after seven months in his role. Foot had joined the business in July 2020 as the successor to Jonathan Fearn. The reason for his exit remains uncertain, and Shoe Zone said that the board-level change will not have any impact on its year-end results due to be published on March 8. The company has now begun a search for his successor. “The board has started the search for a replacement and a further announcement will be made in due course once an appointment has been made,” Shoe Zone said. “Peter’s departure will not have any impact on the company’s year end results.” Back in October, Shoe Zone had reported on an “incredibly challenging year”. For the 52 weeks to October 5, store trading was down 20 per cent year-on-year while digital trading was up 10 per cent.
Govmt slammed for allowing Amazon to exploit glaring loophole in digital services tax
The UK government has been called on the fix a “glaring loophole” in its ‘Amazon Tax’ which has allowed the retailer to effectively avoid paying the levy.
Labour MP and tax campaigner Dame Margaret Hodge has slammed the treasury for allowing Amazon and other tech giants like Google to exploit a loophole in its new digital services tax (DST), The Telegraph reported.
“Our high streets and smaller businesses are desperately struggling” she said.
“That’s why it’s so galling that Amazon doesn’t pay its fair share and avoids the new digital services tax”.
“Amazon is taking advantage of a glaring loophole in the tax. (It) passes the levy onto smaller businesses and escapes any charges for the products it sells itself. The DST is a terribly designed tax and raises little cash, but it’s necessary until there is international agreement on corporate tax reform.
“Until then, the Government needs to step up and sort out the digital services tax so that Amazon and others can’t shirk their responsibilities.”
This tax was launched in April to ensure search engines, social media services and online marketplaces which derive value from UK users pay their fair share of taxes, adding a two per cent levy on all revenues with hopes of raising £500 million a year.
In August Amazon revealed that it would simply pass this two per cent tax along to sellers who use its third-party marketplace, effectively meaning it would not pay a penny on its own sales.
In response, an Amazon spokesman said: “Like many others, we have encouraged the Government to pursue a global agreement on the taxation of the digital economy at OECD level rather than unilateral taxes, so that rules would be consistent across countries and clearer and fairer for businesses.
“We continue to actively support and contribute to the OECD’s work to achieve a consensus-based solution.”
The Treasury added: “The Digital Services Tax is a proportionate measure that ensures tech firms pay their share of tax in the UK. We have been clear it is a temporary tax.”
Landlords must consider adjusting rents to protect high street
Landlords must have “productive” talks with retailers and other businesses over rent arrangements and beyond to help protect high streets, according to the government. During a sitting in the House of Commons yesterday, communities secretary Robert Jenrick said “urgent” dialogue or mediation must be taking place between the two parties. MPs also heard that it was not in the interests of landlords to lose viable businesses as the country prepares to lift lockdown restrictions. Speaking in the Commons, Conservative MP for Sevenoaks Laura Trott said: “The last year has been incredibly difficult for businesses on the high street across Sevenoaks and Swanley, but whilst some landlords have shared that burden, others have not. “What more can the government do to encourage landlords to adjust rents where businesses have lost significant trade or, indeed, have been unable to trade?” Jenrick replied: “What is required now, if it hasn’t happened already, are very urgent conversations – or mediation, if that is necessary – between landlords and their tenants to ensure that, where they can pay, they obviously do so – and we expect that to happen. “But where they can’t pay, that sensible, pragmatic arrangements are put in place. “It is not in the interests of good landlords to lose viable businesses at this moment and we strongly encourage landlords, if they haven’t already, to have those productive conversations as quickly as they can.” For Labour, shadow communities secretary Steve Reed questioned how much money areas will receive under the Levelling Up Fund. “Now high streets need support to help them recover,” he told the Commons. “So will the Secretary of State guarantee that the funding all areas receive under the Levelling Up Fund will be at least as much as they received under their local growth deal?” Jenrick replied: “Of course, we will keep on supporting small businesses on the high street, the Chancellor has done that very successfully over the course of this year in difficult circumstances with the business rates holiday, with the cut in VAT, with the support for business grants. “And we are going to be doing more, as (Reed) says, with the £4 billion Levelling Up Fund which builds on the success of the £3.6 billion Towns Fund. “That will ensure that communities across the country, but particularly those which are furthest away from the labour market, have the highest levels of deprivation and have not seen the levels of government investment that we would wish hitherto get the funding they need to move forward into the year.” Liberal Democrat MP for Richmond Park Sarah Olney asked what provisions will be made to local authorities so people who are evicted from their homes can be supported. Jenrick responded: “Well, my right honourable friend the Lord Chancellor (Robert Buckland) and I are working to consider what further steps are necessary.” He added: “It’s important that we keep in place measures that protect the most vulnerable in society, including those who are renting. “That’s exactly what we’ve done since the beginning of the pandemic and I intend to keep doing so for as long as is necessary.”
New store openings help Home Bargains reach £2.8bn in turnover
Home Bargains has witnessed a 13 per cent increase in its turnover to £2.8 billion in the year to June 30, 2020. The retailer also saw its operating profit rise by 13 per cent to £261 million during the period. The accounts attribute turnover growth to new stores as well as relocations and improving sales at existing branches. The business had 525 retail outlets at the end of the period, up from 506 a year earlier. Home Bargains has been pressing on with its store opening programme during the latest lockdown. The most recent to open in Twickenham features a “new format” with “different ranges and narrower aisle widths to try and maximise every inch of space”, senior store development manager Paul Cooney said. The company was hit with exceptional costs relating to Covid-19 of £14.4 million in the year to June 30, 2020. Gross profit was £886 million, up from £778 million, while profit before tax was £263 million, up from £233 million the previous year. The business employed an average 25,300 during the period, 2500 more than the previous year, with about 2000 of the new jobs in retail and the rest in warehouse and office roles.
John Lewis and Next at threat of paying higher taxes
Some of the UK’s biggest high street retailers reportedly face potentially higher taxes if the government imposes a charge on online sales to fund a reduction in business rates. Fashion retailer Next, electricals group Dixons Carphone, cycle retailer Halfords and department store chain John Lewis could end up paying more if a tax on ecommerce were implemented. The Treasury is reviewing the future of business rates and is due to report its conclusions in autumn, Financial Times reported. The current year-long relief from the tax is likely to be extended. One of the options for reform is a tax of about two per cent on sales made online. Taxing online sales would benefit retailers such as Primark, Aldi and B&M, which do not sell online but have large store estates. However, online-only retailers such as Amazon would attract tax of £380 million at two per cent — many times the estimated £19 million reduction in its rates bill. Ecommerce now represents more than 60 per cent of John Lewis’ revenue, compared with 40 per cent before the Covid-19 pandemic struck. Next’s annual business rates bill would drop from about £115 million to £80 million if the multiplier were reduced to 35 per cent. However, a two per cent tax on its online sales — £2.15 billion last year — would more than cancel out that saving. Meanwhile, Dixons Carphone would also see any savings from a business rates reduction cancelled out by a two per cent tax on online sales. Nevertheless, Big 4 grocer Tesco has suggested a one per cent levy, while Marks & Spencer has advocated increasing corporation tax to fund a cut in business rates. Next chief executive Simon Wolfson has called for higher business rates applied to the warehouses that online-only players depend upon.
Gap fights landlords to close all UK stores in July
Gap is reportedly at war with its landlords after telling them it plans to hand back the keys to all its shops across the UK this July, which will result in the loss of hundreds of jobs. The US fashion retailer, which has 95 stores across the UK, is currently mulling becoming an online-only business in Europe. Gap first announced in October that it was considering shifting its operations to a franchise-only model in Europe. However, it is putting increased pressure on landlords as it tries to break lease contracts early, The Times reported. In December, Gap announced it will close one of its two stores on Oxford Street in central London. While Gap still operates a large flagship further down the famous shopping street opposite Bond Street underground station, the closure reflects the difficulties many apparel retailers face as the Covid-19 pandemic affects bricks-and-mortar. For the to February 1, 2020, Gap’s UK retail sales fell by 9.5 per cent to £195.1 million that year, while it produced operating losses of £40.7 million. Gap had also offered landlords to pay reduced rent until July.
H&M to refashion stores in the wake of Covid19
H&M has reportedly announced that it will be refashioning its network of 5000 stores in the wake of Covid-19 which has seen shoppers shift online. The Swedish retailer has also considered examining whether its shops can play a role in the logistics of online selling. H&M chief executive Helena Helmersson said it is all about boosting relationships and engagement with customers, Financial Times reported. “The physical store network that we have is one of our strengths. It’s the different roles the stores can play, the different formats,” she said. At the height of the first wave of the Covid-19 pandemic, four-fifths of H&M’s physical stores were closed and a big push online was unable to offset the hit. Sales fell a fifth in H&M’s financial year until the end of November to SKr187 billion, while pre-tax profits plunged 88 per cent to SKr1.2 billion. Sales plunged in March and April, before rebounding strongly in the summer, and then getting hit again around Christmas. H&M’s shares fell consistently from 2015 to 2018, although they have climbed 50 per cent since their Covid-19 low in March last year. Opening new stores gave the Swedish group an easy path to sales growth but did not help its profit margins, which have been declining consistently for the past decade. Helmersson said H&M took “really, really fast decisions” at the start of the pandemic on how it bought garments, worked with its supply chain, and moved to selling more online. H&M is currently trying to increase its speed on sustainability, bringing in a target of using 30 per cent recycled materials by 2025. Earlier this month, H&M announced plans to expand online second-hand fashion retailer Sellpy into The Netherlands and Austria. It has been investing in Sellpy since 2015 and became its majority owner in 2019, when it increased its stake to 70 per cent. Sellpy’s first expansion move outside of Sweden was in Germany last summer. Helmersson, a former head of sustainability at H&M, said that the hardest task for the retailer was decoupling its growth from its use of natural resources.
Online sales tax would be a huge mistake as industry splits
An online sales tax would be “a huge mistake” retailers have warned as the industry splits in its support for the controversial tax.
Retailers across the UK are vehemently voicing both their support and opposition to an “Amazon Tax” which is expected to be announced in the Spring Budget next week.
While British retailers almost unanimously agree that business rates desperately need reforming, few agree on whether an online sales tax is an effective solution to balance the playing field between physical and online retailers.
Treasury officials are understood to have been meeting with business leaders in private to explore how an online sales tax, which is likely to impose a two-percent levy on all sales made online in the UK, would work.
Many have warned that this could not only actually raise taxes for physical retailers like John Lewis and Next which have significant online operations, but would also hamper independent retailers at a crucial impasse for the British economy.
“As we approach the budget, an online sales tax would be a huge mistake from Chancellor, Rishi Sunak,” chief executive of UK online marketplace OnBuy Cas Paton said.
“While it’s been nicknamed the ‘Amazon Tax’, the reality is that it won’t impact the big players in the market but will stifle the growth of so many independent British retailers which have relied on online sales as a lifeline over the past twelve months.
“As an online marketplace, we’ll of course feel the impact of this type of tax, but I am far more concerned about the millions of entrepreneurs and SMEs across the country.
“Over 6,000 independent British retailers sell on OnBuy and it is those business owners that will take the hit. It won’t touch the sides when it comes to the big corporates.”
ParcelHero’s head of consumer research David Jinks added: “Ironically, a new tax supposedly aimed at saving town centre stores may drive the final nail into their coffins by slashing their online sales.
“The Chancellor should not make UK’s beleaguered online shoppers and indie stores pay the price for lost business rates income.
“The new tax would hit shoppers and remaining retailers alike. Those High Street outlets that find ways to survive must have websites as well as physical stores. A new online sales tax will leave most retailers paying a second raft of taxes.”
The tax would generate significant proceeds, seeing Amazon alone paying roughly £380 million in tax on sales equivalent to those made in 2020, dramatically more than the £19 million it paid under the current system.
These proceeds could then be used to offset business rates bills, which have been cited as the key factor leading to the collapse of countless high street giants over the last two years.
Business rates bills are currently calculated by applying a tax “multiplier” to the annual rental value of a property.
An online sales tax could potentially see this multiplier drop from 50 per cent to around 35 per cent, returning to levels seen in 1990 and providing a welcome reprieve for retailers which rely on their vast store estates, like Primark.
However, as John Lewis’ executive director for operations Andrew Murphy pointed out, taxing online sales is “highly likely to harm the very businesses that such a move would seek to support.”
Primark set for £1.1bn hit but expects big spending after lockdown
The parent company of Primark believes the retailer will have lost out on sales of £1.1 billion as a result of the increased Covid-19 restrictions and lockdowns of the past six months. Associated British Foods (AB Foods) said it expected to take a further £480 million hit to sales in the second half of its financial year – March to August – but expects a strong boost once stores can reopen and pent-up demand is met. The company added that, despite the heavy falls, sales at Primark in the six months to February 27 were still expected to come in at £2.2 billion, as some stores remain open overseas and taking into account sales periods before the new restrictions were introduced. However, this is well down on the £3.7 billion in sales recorded in the same period a year earlier, prior to the global pandemic. Just 77 Primark stores are currently open worldwide – representing 22 per cent of total store selling space – and most of them are in the US. Bosses said they expected to be “highly cash-generative” when stores can finally reopen, with 83 per cent of floor space able to welcome customers by April 26, based on current estimates and government announcements in different countries. AB Foods said it has saved money through cost-cutting measures to mitigate the falling sales and still has spring and summer stock from a year ago that could not be sold due to the pandemic, which will go into stores when they can reopen. Later in the year, stores will also be able to rely on the autumn and winter collections from last year. “We expect the period after reopening to be very cash-generative,” AB Foods said in a pre-close period trading update. “We expect to sell the £150 million of spring/summer inventory held over from last year, and our cash outlay in the second half for the coming autumn/winter season will mostly benefit from the £260 million autumn/winter stock held over from the first half.” AB Foods added that, when Primark stores were open, trading continued to be strong, with sales up 15 per cent on a like-for-like basis compared with last year. However, the number of customers when stores could open was down and trading hours restricted. “Performance has varied by store, reflecting the prevailing circumstances of our customers including home working, less commuting and very little tourism,” AB Foods said. “Like-for-like sales at our stores in retail parks were higher than a year ago, shopping centre and regional high street stores were lower than last year, and large destination city centre stores, which are heavily reliant on tourism and commuters, continue to see a significant decline in footfall.” The firm added that it expects adjusted operating profit for Primark in the first half to be marginally above break-even, compared with an adjusted operating profit of £441 million for the same period in the last financial year. Based on the recent announcements by the UK Government, bosses said they expect to reopen 153 stores in England on April 12, and it is hoped a further 20 in Scotland can open by the end of April. AB Food’s other divisions in grocery, sugar, agriculture and ingredients are expected to see revenues and profits ahead of expectations, the firm added.
TK Maxx owner posts sales drop as lockdown continues
TK Maxx’s parent company TJX Companies has witnessed a sales decline of 10.7 per cent year on year to $32.1 billion (£22.8 billion) in the year to January 30 2021, as lockdown closures affect trading. For the full year, store sales outside the US were down four per cent compared to the same period last year. Net sales for the fourth quarter were down 23 per cent to $10.9 billion (£7.7 billion), compared to last year, with overall store sales down three per cent. The company currently has approximately 690 stores that are temporarily closed due to government mandates. Stores across Europe were closed for approximately 63 per cent of the period and stores in Canada were closed for about 32 per cent. The group operates a total of 4572 stores in nine countries. “Our brands, values, and exciting gift assortments resonated with customers, and we achieved these results despite numerous Covid-related headwinds,” TJX Companies chief executive and president Ernie Herrman said. “As we start the new fiscal year, while uncertainty around Covid-19 remains, we feel very good about the strength of the business and our market share opportunities beyond the health crisis. “We are convinced that our entertaining, treasure hunt shopping experience, our differentiated, branded merchandise selections, and value proposition will continue to resonate with consumers. “We see many opportunities to leverage our flexible business model, gain more customers, and continue driving the successful growth of TJX for many years ahead.”
Asda places 5000 staff into consultation as it launches major restructuring
Asda has launched consultations with around 5000 staff over a major restructuring scheme that could put around 3000 back office store workers at risk. The Big 4 grocer said the restructuring was being driven by the “structural shift” towards online grocery shopping during the Covid-19 pandemic, and that redundancy would only be “the last option” for the roles up for consultation. Asda stressed it would try and move “as many colleagues as possible into alternative roles” within the business, with plans to create around 4500 separate jobs across the country in its online operations this year. Nevertheless, Asda said the consultations would impact about 3000 back office store workers, particularly staff with cash and administrative roles amid the continued slump in cash transactions. The retailer added that it plans to close its Dartford and Heston home shopping centres, with around 800 jobs affected, as it looks to shift more picking operations into stores. It also said that around 1100 of its store management roles would change to support online grocery operations as more picking takes place in stores. However, Asda said this could increase the total headcount in these roles by around 60, as part of the consultations. “The pandemic has accelerated change across the retail sector, especially the shift towards grocery home shopping, and our priority is to serve customers in the way they want to shop with us,” Asda chief executive Roger Burnley said. “The last 12 months have shown us that businesses have to be prepared to adapt quickly to change and I am incredibly proud of the way we demonstrated our agility and resilience through the pandemic. “We know that these proposed changes will be unsettling for colleagues and our priority is to support them during this consultation process. “Our plans to transform the business will result in more roles being created than those we propose to remove and our absolute aim is to ensure as many colleagues as possible stay with us, as well as creating the opportunity to welcome new people to our business.” It comes months after the billionaire Issa brothers and private equity backer TDR Capital agreed a £6.8 billion deal for the supermarket chain. While the takeover process has completed, it is still awaiting approval from regulators at the CMA, so the new owners are yet to take control of Asda’s operations.
Waitrose to donate 1 million meals directly from suppliers in pioneering new scheme
Waitrose is launching a pioneering new initiative that will see over one million meals donated directly from its food suppliers.
Waitrose has partnered with food distribution charity FareShare and some of its biggest food suppliers to redirect surplus farm food to vulnerable households.
From March 1 to June 30 Waitrose will fund FareShare to distribute surplus food from its own farms, significantly reducing handling and logistics costs.
This new initiative is expected to see five million surplus apples, carrots, mushrooms and sweet baby sprouts redirected, with the target of creating more than one million meals.
Alongside this, Waitrose will also purchase and donate one million British eggs and 22 tonnes of British beef to support vulnerable families.
“We’ve all been inspired by the brilliant work Marcus Rashford has been doing, and we believe there is now a real opportunity for the industry to stand united and help tackle food poverty right from the farm,” Waitrose executive director James Bailey said.
“While farm surplus is put to good use, we must do everything in our power to divert any edible food we can to families that need them during this pandemic.
“As the only supermarket to own and run its own farm, we know how much pressure farmers are under to keep the nation fed, so it’s vital this burden and cost does not rest on their shoulders.
“This is why we will be funding all handling costs until the end of June to get food on the plates of those that need it most. This is just the start and we hope this will lead to us achieving our goal to one day eradicate all avoidable and edible farm waste.”
FareShare’s chief executive Lindsay Boswell added: “This is a significant moment in our battle against food waste and hunger in the UK.
“Working with Waitrose farms and suppliers offers FareShare a fantastic opportunity to access food that would otherwise end up going to waste, at a time when millions of people are going hungry across the UK.”
Farfetch swings to £1.65bn loss despite soaring revenues
Farfetch has reported a full-year loss after tax of $2.3 billion (£1.65 billion), despite a soar in its revenues and profits. Full year revenue at the online fashion retailer increased by 64 per cent year-on-year to $1.64 billion (£1.17 billion). Revenue for the quarter ending December 31, 2020, rose by 41 per cent year-on-year, to $540 million (£387 million). Gross Merchandise Value (GMV) for 2020 exceeded $3 billion (£2 billion), up 49 per cent for the year. The retailer’s loss before tax included $2.1 billion non-cash impact of higher share price on items held at fair value and remeasurements. It made a loss after tax of $110 million (£78 million) in for fourth quarter in 2019. Gross profit for 2020 was $770 million (£552 million), but Farfetch made a loss after tax of $3.3 billion (£2.36 billion – almost ten times that of its $373 million loss at the end of 2019. Farfetch achieved its first ever quarter of positive adjusted EBITDA. The last quarter of 2020 adjusted EBITDA increased to $10 million (£7 million), up from a loss of $18 million (£12.9 million) in Q4 2019. “2020 put the Farfetch platform to the test, but thanks to our robust capabilities, resilient operations and utmost perseverance from our more than 5000 Farfetchers, we rose to the challenge and enabled our nearly 1400 marketplace sellers and Farfetch Platform Solutions clients to continually serve millions of luxury consumers across the globe, Farfetch founder, chairman and chief executive José Neves said. “We cemented our leadership as the largest global online destination for luxury fashion, accelerated our Chapter 2 initiatives with strategic partnerships advancing our position to be the global platform for the luxury industry, and demonstrated the scale and attractiveness of our business model as we achieved the key milestone of Adjusted EBITDA profitability in the fourth quarter. “As we enter 2021, I am more energized than ever by the prospects of leveraging our incredible achievements to date and our unique platform capabilities to go after the significant growth opportunities we see in our vision to be a digital enabler connecting the creators, curators and consumers of the global luxury industry, both online and offline – a nearly $300 billion opportunity we remain laser-focused on and plan to continue investing behind to deliver significant value over the long-term.” Farfetch chief financial officer Elliot Jordan said: “The strong performance of Farfetch in the fourth quarter completes a remarkable year and is the result of our focused execution against the long-term strategy and the leveraging of our investments to date. “We exceeded our own initial expectations for the year; accelerating growth in our digital platform, improving margins across all areas of the business and delivering strong operating cash flows. “As a result, we delivered our first ever quarter of positive adjusted EBITDA. Our industry partnerships and strategic alliances, as well as our $1.6 billion of liquidity, position us well to continue investing behind the long-term growth opportunities we see in digitally enabling the luxury industry.”
Pets at Home upgrades profits forecast for the 4th time since September
Pets At Home has upgraded its profits guidance for the City for the fourth time since September, as the pandemic boost in pet ownership shows no sign of letting up. Bosses said they now expect underlying pre-tax profits to hit £85 million, ahead of previous guidance of £77 million – itself an upgrade on previously announced forecasts. The pet goods retailer said it made the call because trading during the fourth quarter of its current financial year – January to March – was stronger than expected during the new lockdown measures introduced at the start of 2021. Pets At Home stores have remained open throughout the pandemic and various other restrictions, due to being classed as an “essential” retailer. “In our trading update on 8 January 2021, our guidance for full-year profit out-turn reflected a number of ongoing uncertainties over the near-term outlook, including renewed challenges from higher Covid infection rates and restrictions on a national level, as well as potential supply disruption relating to the UK’s exit from the EU,” the firm said. “Notwithstanding this challenging external environment, our performance over the last eight weeks has been ahead of expectations, with continued strong and broad-based growth across all channels and categories.” Last month Pets At Home revealed that like-for-like retail sales soared 17.5 per cent in the three months to the end of December, including a 19.3 per cent jump during the final month of the quarter.
Boots to cut 300 jobs at Nottingham head office
Boots has revealed plans to axe 300 office jobs as it continues to grapple with “changed consumer behaviours forever” in the wake of the Covid-19 pandemic. The proposed job cuts will see health and beauty retailer lose about 10 per cent of its workforce at its Beeston head office in Nottinghamshire. The roles affected will range from various divisions and seniority levels. No store or pharmacy roles will be impacted by the proposed job cuts. The proposed restructure is part of Boots’ transformation strategy that features digital investment to serve customers “more efficiently”. The proposed job losses are subject to consultation. “The events of the last year have changed consumer behaviours forever and we must adapt our business to meet these new needs,” Boots managing director Seb James said. “This means investing in our digital business, serving customers more efficiently and, above all, becoming much swifter and more agile. ”I am acutely aware that this structural change will be difficult for our amazing team in Nottingham and we will do everything we can to make sure that we support and help anybody who is affected.” The news comes after chief operating officer Tracey Clements and vice president of beauty and gifting Joanna Rogers both resigned from Boots in recent weeks for new roles.
Sainsbury's reveals new brand slogan to support sustainability
Sainsbury’s is set to drop its ‘Live Well for Less’ brand slogan this spring and replace it with ‘Helping Everyone Eat Better’. The grocer’s new motto seeks to focus on “how delicious food can also be healthy, sustainable and affordable”. Sainsbury’s made the announcement at the same time as it said it would be the key supermarket partner of the COP26 climate summit – set to be held in Glasgow this November. The grocer has pledged to become carbon neutral by 2040 and cited research on how shifting customers away from red meat, dairy and high-fat food consumption could help it achieve those goals. “We believe that everyone wants to play their part and reduce their impact on the planet – and that we can help shoppers find simple ways to make delicious, great value food healthier and more environmentally friendly, one plate at a time,” Sainsbury’s chief executive Simon Roberts said. “We have long recognised our responsibility to protect the environment and I’m extremely proud that we continue to lead the charge. “Tackling climate change requires transformational thinking across industry and government and a willingness to collaborate globally. “We are delighted to partner with COP26 and hope that it inspires our colleagues, customers and other businesses to rally together to protect and restore our planet for future generations to come.”
93% of the UK bought on Amazon last year
A whopping 93 per cent of the UK say they have shopped on Amazon at least once over the past 12 months, as the online giant solidifies its dominance during lockdown.
According to a new research from ecommerce specialist Pattern, just seven in 100 UK citizens avoided Amazon all together over the last year.
The UK’s successive national lockdowns were unsurprisingly a key factor in driving shoppers to Amazon’s vast marketplace, with 43 per cent of respondents stating closure of non-essential stores was the key reason behind them making a purchase.
A further 40 per cent said they were now buying items online which they previously would have bought in store, with 39 per cent stating they were now buying more with Amazon as a result.
Looking ahead throughout 2021, 39 per cent of shoppers said they expect to spend more online on non-food items, while 30 per cent said they expect to purchase more with Amazon.
While Amazon has been a key beneficiary of the shift online, other online retailers also reaped the rewards.
According to Pattern’s data 28 per cent of respondents said they had changed the online retailers they bought from in the last year, while 29 per cent said they expect to buy from other throughout 2021.
“Amazon makes no secret of the fact that selection is crucial to its appeal,” Pattern’s general manager for Europe Nicola Hollow said.
“Our research shows that consumers particularly appreciated its wide range during lockdown, and have broadened the type of products they are willing to buy from the marketplace in the future as a result.”
Nearly 60 per cent of shoppers said they visited Amazon last year to find products they were unable to find in stores, while 40 per cent said they went to Amazon after being unable to find what they were looking for online.
“Online sales were of course going to rise while many physical stores have been closed, but our research gives credence to the theory that some of this switch to online shopping is permanent,” Hollow continued.
“Amazon has been one of the biggest beneficiaries of lockdown, and we don’t expect it to lose ground even when all stores open again in April.”
M&S offer 360 work placement jobs
Marks & Spencer is offering 360 work placement jobs that provide training and skills in retail as part of a scheme to give 16-24-year-olds a step onto the career ladder. In partnership with The Prince’s Trust charity, M&S said it would deliver two cohorts of placements in April and June this year, with 180 people each. M&S said the scheme was in support of the UK Government’s Kickstart programme, which provides funding to create new job placements for 16-24 year-olds who are on Universal Credit and are at risk of long-term unemployment. The new scheme is also part of M&S’s wider commitment to employability such as Marks & Start, which has helped over 20,000 young people facing barriers into work. Successful applicants will join as trainee customer assistants for six-month placements rotating across M&S’s Foodhalls, backstage operations, hospitality and clothing and home departments. The roles will be available across the UK, including M&S’s 30 regional academy stores. Once their six-month tenure is finished, M&S said would aim to support the work placement staff to apply for permanent positions, where available, across its stores. All Kickstart colleagues will be paid in line with current in-store pay levels. “Through our partnership with The Princes Trust, we’re proud to have supported thousands of people who face barriers to jumpstart their careers,” M&S retail director Sacha Berendji said. “But now more than ever, as a result of the pandemic, we know the challenges to find work are even greater for young people. “That’s why, we’re proud to play our part by backing the government’s Kickstart scheme and helping to build essential employability and skills to improve their chances of finding long-term careers.” Applications for the April workers have now opened at Jobcentre Plus locations across the UK.
Debenhams shuts all 15 Scottish stores
Debenhams is to shut down all 15 of its stores in Scotland, resulting in almost 650 job losses, as administrators provide an update on the retailer’s liquidation and wind-down process. However, following the announcements of the plans for easing lockdown for non-essential retailers, the collapsed department store chain confirmed that it intends to re-open its stores in England, Wales and Northern Ireland “for a short period” to complete its stock liquidation process as soon as government restrictions allow. In England this is expected to be no earlier than April 12 based on the latest government guidance. A specific lockdown exit date for Northern Ireland and Wales is set to be revealed. Meanwhile, the Scottish Government stated that the reopening of non-essential stores there would not begin until April 26 at the earliest, and that this would then be on a tiered basis. Debenhams’ administrators said this timeline did not align with those expected in other parts of the UK, prompting it to make the decision to not reopen its Scottish stores briefly as it plans to do so in England. The total number of Debenhams employees affected is 647. “With the planned wind-down of the Debenhams business, regrettably our 15 stores in Scotland will now not reopen and are closed permanently,” the retailer said in its update. “As a result of these closures, all employees in our Scottish stores will be made redundant. “A number of employees will be retained for a short period of time to support an orderly exit from the stores.” Geoff Rowley, joint administrator and partner of FRP Advisory, said: “The Debenhams liquidation clearance continues online, and will restart in stores in England, Wales and Northern Ireland once restrictions allow. “We regret that Debenhams’ Scottish stores will not be able to reopen, and would like to thank all those employees affected for their commitment to Debenhams during what I know has been an extremely unsettling time.” Debenhams went into liquidation in December, after an administration process failed to secure any buyers to save the department store chain. About a month later, Debenhams’ brand and assets were purchased by Boohoo Group in a £55 million deal. Boohoo’s deal only includes Debenhams’ brand and other business assets – including all the in-house brands and websites – and will see Boohoo take ownership of Debenhams’ ecommerce operations and products around the start of its next financial year in March. This allows enough time for administrators to continue running closing down sales across Debenhams’ remaining shops – which counted 118 at the time – once they are allowed to reopen once lockdown restrictions are lifted. The Insolvency and Companies Court also gave the department store retailer orders to wind down hours after the Boohoo deal was confirmed. With all of Debenhams’ stores closing down permanently as part of the liquidation and wind-down process, it means up to 12,000 staff would not have their jobs saved. Since it fell into administration last April, Debenhams had already announced significant job losses and store closures – including the more recent announcement of six store closures, of which its flagship outlet on London’s Oxford Street was a part. That administration itself was the second of its kind that Debenhams had launched within the space of 12 months. Shortly after the first administration, it launched a CVA that saw it close down scores of stores immediately after the 2019 Christmas trading season. At its peak and before the first administration in 2019, Debenhams operated from around 160 stores across the UK.
Sainsbury's & Argos shop staff given pay rise & 3% annual bonus
Sainsbury’s will increase salaries for staff at its supermarkets and Argos stores and pay a bonus to frontline workers – the third since the pandemic started, the retailer said. Sainsbury’s staff currently receive £9.30 an hour while Argos workers get £9 an hour, but from March this will rise to £9.50 per hour. Staff at central London stores will see their hourly pay rise to £10.10. A three per cent annual bonus will also be paid out to frontline staff, meaning a full-time worker will take home an extra £530. The announcement comes after Lidl announced a £200 bonus for its 23,000 UK workers, Aldi revealed a wage increase to a minimum of £9.55 an hour, and Morrisons said its shopworkers would take home at least £10 an hour from April. Supermarkets have been one of the biggest winners during the Covid-19 pandemic, remaining open throughout and enjoying strong sales as non-essential retailers, pubs, cafes, restaurants, hairdressers and beauty salons remain shut. The latest pay rise from Sainsbury’s means workers at the retailer have seen salaries increase 24 per cent over the last five years. The bonus is also the third since the pandemic and means the retail giant has handed out more than £100 million in extra cash to workers. A 10 per cent pay boost was made between March and April last year and a second boost of 10 per cent for four weeks in November. In March last year, Sainsbury’s also increased pay for store staff to £9.30 per hour, while pay for workers in central London – zones 1 and 2 on the London Underground map – received £9.90 per hour. Sainsbury’s and other grocers had faced criticism earlier in the crisis when attention appeared to be focused on handing out dividends to shareholders from the extra profits generated during the pandemic. However, several agreed to hand back cash saved from business rates holidays, and increased pay rates, paid bonuses and agreed to Boxing Day holidays before making the dividend payments. “In the last 12 months our frontline colleagues have shown outstanding commitment to our customers,” Sainsbury’s retail director Clodagh Moriarty said. “In recognition of everything they have achieved, we are giving them a pay rise, plus an additional one-off payment.”