NEWS
Black Friday failed to lift consumer spending but sees increase of footfall
Latest UK consumer spending index data from Visa, compiled by finance data company Markit, has indicated that consumer spending declined for the third month running in November. On an annual basis, total expenditure fell by -0.9%, which was less severe than the -2.1% reduction seen in October, but nonetheless kept spending on track for its weakest calendar performance for five years. Expenditure on the High Street declined for the seventh month in a row on an annual basis in November, declining by -3.5% overall. Although this marked an improvement from the -5.1% decline in October, it was still one of the strongest reductions recorded since 2012. Meanwhile, E-commerce spending continued on an upward trend, though the growth rate of +2.4% remained modest in the context of the survey’s history.
Chief Officer of commercial at
Visa, Mark Antipof, commented: “Festive cheer was in short supply for the UK’s retailers during last month as Black Friday promotions failed to lift consumer spending. November’s poor performance means that we stand by our earlier prediction that the UK will see its first fall in overall Christmas spending by consumers since 2012.
However data from the British Retail Consortium (BRC) shows Footfall in November increased on average by 0.2% year-on-year, an improvement on the figure seen for November 2016 (-1.0%). This was above the 3-month rolling average of -1.0% and the 12-month rolling average of -0.4%.
Chief executive of the BRC, Helen Dickinson OBE said: “Though very welcome after four consecutive months of decline, the month’s growth in footfall is unlikely to signal a reversal of the longer
term trend. As price increases for food continue to eat into household finances, consumer spending power for discretionary non-food items will inevitably weaken. So a cautious consumer may sap some of the sparkle from this year’s Christmas trading, which means retailers are going to have to compete even harder for customer spend, which is always good news for consumers. “With these tough conditions in
mind, it’s crucial that the Government now negotiates the best deal for UK consumers by securing tariff-free trade and as frictionless movement of goods as possible with the EU.”
Poundland’s parent company under investigation for accounting scandal
Global retailer and parent company of Poundland, Steinhoff, has come under fire recently due to an investigation into an accounting scandal at Steinhoff International Holdings NV that has seen the value of the company decrease sharply by $11.4 million so far. The accounting irregularities caused the resignation of the retailer’s chief executive officer Markus Jooste, who owned the france-based Conforama furniture chain, Mattress Firm in the US and Poundland in the UK, shortly after an auditor was brought in to investigate further. The retailer’s biggest
shareholder is billionaire chairman Christo Wiese, who has stepped in to take temporary charge of the company. In addition to purchases like the UK’s Bensons for Beds, the company has made plays for appliance chain Darty in France and household-goods retailer
Retail park giant Hammerson to acquire rival Intu
Hammerson plc, which operates 17 UK retail parks, as well as shopping centres and outlets across the UK and Europe has made an all-share offer to acquire Intu, with a view to create a £21billion pan-European portfolio. The boards of the two companies have reached
agreement on the terms of a recommended all-share offer by Hammerson to acquire the entire issued and to-be issued share capital of Intu. Intu Properties operates 14 shopping centres across the UK, including Lakeside and the Trafford Centre in Manchester. It expanded its reach into Spain in 2015.
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The boards of Intu and Hammerson believe that there is a compelling strategic rationale for the acquisition, which will bring together the retail property portfolios of the two firms and their combined expertise “to create a leading European retail real estate investment trust (REIT) with a strong income profile and superior growth prospects”. The acquisition will result in Hammerson shareholders owning 55% of the enlarged business. Both boards believe that, following the acquisition, the ‘enlarged group’ will be better placed to enhance its position within its geographic markets and across its retail formats, allowing for “a more
efficient and adaptable platform allowing it to respond to fast- changing consumer preferences and retail trends”.
15 DECEMBER 2017 DIY WEEK 3
Argos in Britain. South African regulators have joined the investigation as Steinhoff has deep roots in the country; the Pretoria-based Financial Services Board has started an independent probe into possible false and misleading financial reports, Finance Minister Malusi Gigaba said in an emailed statement on Thursday, adding that he supports the inquiry. Steinhoff, which employs about 130,000 people worldwide, announced Wednesday that it was delaying the release of its results as
new information had come to light on a criminal and tax investigation in Germany. The retailer, which also has a base in Amsterdam, said in a statement that it had received expressions of interest in “certain non-core assets.” Steinhoff also said its African unit will formally commit to refinancing its long-term liabilities owed to the company, boosting liquidity further.
Earlier this year Poundland put UK discount chain 99p Stores - which it bought for £55m two years ago – into administration.
Akzo Nobel gets green light to separate out Speciality Chemicals division
The Dutch coatings firm’s newly-appointed chief financial officer (CFO) and three supervisory board members have gained shareholder approval for the move, which forms part of its strategy to create two “focused, high- performing businesses,” with Paints and Coatings and Specialty Chemicals. The motion was carried at Akzo Nobel’s extraordinary general meeting (EGM) on Thursday, November 30. The appointment of new CFO Maarten de Vries as a member of the Board of Management, effective January 1 was also approved, in addition to the appointment of three new members to the Akzo supervisory board: Sue Clark, Patrick Thomas, and Michiel Jaski. Shareholder approval enables
Akzo to separate its Specialty Chemicals business through a private sale or legal demerger. The firm, which owns leading decorative brands Dulux,
Hammerite, and Cuprinol, believes the dual-track process will ensure the flexibility needed to obtain “an optimal result for shareholders and other stakeholders”.
As Akzo Nobel has previously announced, it intends to return the vast majority of the net proceeds from the separation of the division to its shareholders - starting with advance proceeds of €1 billion through a special cash dividend. The special dividend will be paid on December 7, 2017.
Chief executive officer Thierry
Vanlancker commented: “We welcome Maarten de Vries to Akzo Nobel. With his extensive international business experience he will further strengthen the leadership of our company. Today marks a significant milestone in the transformation of Akzo Nobel into two focused high performing businesses, which remains on track for April 2018.”
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