Posts from January 2023

Spalding-based shopping centre Springfield Outlets and Leisure has announced the signing of Cadbury Outlet. Opening in early February, the new store will undergo a fit-out which will include a hot chocolate and ice cream station. The 200,000 sq ft scheme is also celebrating strong Christmas sales, which were 13% higher than pre-Pandemic levels. Its highest weekly sales on record were achieved twice in December which saw a monthly turnover increase of 9%. The scheme said all of its anchor stores traded positively against 2021 and have delivered double-digit growth on a weekly basis. Its winter clearance event, which started on Boxing Day, saw turnover increase by 21% compared to the previous year, while late night Christmas shopping after 6pm rose by 13%. It also said that its Winter Wonderland Christmas Walk proved a big hit, with over 33,000 visitors attending the experience. The retail park is home to a mixture of retail, leisure, and 25 acres of gardens. The scheme was developed and continues to be managed by SLR Outlets for Triton Property Fund, and is home to retailers such as Dune London, Joules, Radley London, OSPREY LONDON, and Jack Wills as well as food and beverage options including The...

Deals

DFS Christmas sales down against 2021 but still ahead of pre-Pandemic levels

Furniture retailer DFS has revealed a period of solid sales over the Christmas period, albeit slightly lower than what it saw in 2021. Although the retailer saw an improvement in sales of 16.3% in the second quarter of its 2023 financial year (FY), this rise was lower than in FY22, when the second quarter saw an increase of 18.8% against the first. Gross sales were down 1.1% against FY22, however were 9.6% higher than FY19, that is, pre-Pandemic. Order intake was also higher than pre-COVID levels by 10.6%. The retailer said its second quarter improvements were supported by further market share gains. Tim Stacey, group chief executive, said: “The Group has traded well through the second quarter and the start of the important winter sale trading period. Whilst the macroeconomic environment remains challenging and hard to predict, we reiterate our full year profit guidance supported by the positive current trading momentum. “As always, we continue to invest for the long term success of the business, to further strengthen our market leading position and with our established platforms, scale and expertise we believe we are well set up for growth over the medium term.”

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Federation of Small Businesses: Concern for small firms despite growth

The Federation of Small Businesses (FSB) has warned that the future for small businesses is uncertain, despite unexpected growth in the UK economy. Office for National Statistics figures have revealed that GDP rose by 0.1% in November 2022 compared to the previous month, but fell by 0.3% for the three months to November. The service sector grew by 0.2% in November and was the main driver of growth in the month. November’s growth saw followed an increase in GDP of 0.5% in October. Reasons for the sharp slowing in growth include industrial action from both rail and postal workers. However, much of the growth in October can be credited to a bounceback after business closures during the funeral of HM Queen Elizabeth II. Between July and September, UK economic output shrank by 0.3%. Despite this better-than-expected growth, the FSB urged caution for smaller businesses. National Chair of the FSB, Martin McTague, said: “The 0.1% growth in November is encouraging, but the concerns that small businesses have over the economy’s direction of travel have not been laid to rest, even though the men’s football World Cup gave a fillip to the hospitality sector as people gathered to watch games. “With costs remaining...

News

Card Factory makes chief financial officer appointment

Card Factory has announced the appointment of Matthias Seeger as chief financial officer (CFO) Seeger has been CFO of Ambassador Cruise Line since February 2022, having previously worked as CFO of Costcutter Supermarkets from September 2015 to September 2021. Other previous roles he has held in his 31 year career include senior finance positions with Procter and Gamble between 1991 and 2013. He has a master’s degree in engineering and an MBA from the University of Texas. He is expected to join Card Factory in May. Kris Lee will leave the company on 31 January 2023, at which time he will step down from the board and as CFO. Pending Seeger’s appointment, Simon Comer, currently group financial controller, will be appointed as Interim Chief Financial Officer, but will not be appointed as a director of the company. Comer has been group financial controller since June 2021, having held previous senior finance roles. Darcy Willson-Rymer, Chief Executive Officer, commented: “Matthias has extensive financial experience and I look forward to working with him again, confident that his expertise and values will support Card Factory’s strategic projects and significant change programme over the next few years. I am grateful to Kris for his...

News

Revolution investigation finds number of wrongdoings

The independent investigation into Revolution Beauty has revealed several concerns about the running of the company, including over historical sales, methods of inventory provisioning and personal loans made by a former CEO. Revolution’s shares were suspended in September 2022 after it twice failed to post its annual results and has since been the subject of an investigation by law firm McFarlanes and accountancy Forensic Risk Alliance. The company’s auditor, BDO, wrote to the board of Revolution on September 21 highlighting a number of serious concerns that had arisen during the course of its work on the audit of the accounts for the 2022 financial year (ending 28 February 2022). The findings highlighted concerns related to Revolution’s acquisition of Medichem, a pharmaceutical company wholly owned by Tom Allsworth, who is an executive chairman and co-founder of the beauty brand. It was revealed that outstanding payments to Medichem of £7m had still not been fulfilled. Issues were also raised over sales made to three key distributors in February 2022, relating to the sales volumes, timing, terms and rationale for the sales to each of the distributors. According to the report, materially larger than normal orders were placed by each of the distributors...

News

WHSmith makes non-executive board change

Stationer WHSmith have announced that Maurice Thompson will step down from the board effective from January 18. Thompson has held the role of non-executive director of the company since February 2019, and has informed the board of his intention to step down after the business’s annual general meeting. He has held a number of senior roles at financial institutions in a 33-year career in banking. His previous roles have included global head of equity capital markets at SG Warburg, global head of investment banking and on the group executive committee at Deutsche Bank, and various roles for Citi, including vice chairman of banking, head of continental Europe for the corporate and investment bank, and country officer and CEO of Germany and the UK.

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Successful festive period for leading supermarkets

Tesco and M&S both enjoyed fruitful festive periods, with sales seeing a huge jump in the run up to Christmas. Tesco saw like-for-like UK sales increase by 7.2% in the Christmas period, allowing them to maintain a market share of 27.5%. The grocer said its strong performance was driven by a focus on value & quality, and strong execution across every part of the shopping trip. Tesco added that it had seen constant growth across both large stores and its convenience branches, with online sales also returning to growth across the period, with sales 59% higher than pre-pandemic levels. Ken Murphy, Tesco chief executive, said: “We go into the new calendar year with good momentum and I am confident we can continue to maintain our competitiveness and deliver a strong performance relative to the market despite the challenging conditions ahead.” M&S also enjoyed a strong festive period, seeing an increase in UK sales of 9.7% for the third quarter of its 2022/2023 financial year. This was a like-for-like increase of 7.2%. Stuart Machin, M&S chief executive said: “M&S sustained trading momentum through the peak quarter and both Food and Clothing & Home have delivered strong growth. M&S Food outperformed the market...

News

Consultation begins on Manchester retail park regeneration plans

Consultation has begun on regeneration plans to transform the former Central Retail Park site in Manchester to a mixed-use scheme. Details of a refreshed strategic regeneration framework (SRF) were heard by Manchester Council executives in December, updating a previous SRF which was agreed in 2020. The draft SRA lays out plans for the 457,000 sq ft site, which closed down in 2019, including space for new offices and workspaces, green areas, transport routes, as well as retail and leisure spaces. This would include spaces for shops and cafés for the new working population on the site. The Government Property Agency (GPA) is exploring options for office solutions in Manchester, as it looks to support the Government’s commitment to locate more civil servants outside of London to support levelling up. The newly proposed development has thus led to interest from the GPA to locate government offices on the site. The former retail park, which was purchased by Manchester Council in 2017 for £37m, used to be home to household names such as Toy ‘R’ Us and Argos. The newer SRA revealed that the local council had approved plans for ‘The Garden’, a huge open park space, as part of the developments,...

News

Toby Carvery owner enjoys strong festive period

Mitchells & Butlers, the parent company of Toby Carvery, has recorded a period of strong trading in the run up to Christmas. The restaurant and pub group, who also operate Harvester, All Bar One, and O’Neill’s amongst others, revealed a total sales growth of 13.3% for the festive season. In the group’s results for the first quarter of its 2023 financial year, it saw a like-for-like sales increase of 6.5% in the first ten weeks up to December 3, driven primarily by drinks growth. However it adds that this number is likely to be significantly increased due to the impact of the Omicron variant of COVID-19 in late 2021. Comparing the same period in FY2019, the last full financial year before the pandemic, like-for-like sales were up by 8.9% against the first 15 weeks to January 12 2019, with 9.2% growth in the first ten weeks of FY2023 followed by 8.5% growth in the five weeks to January 7. The group said it is continuing to invest in its existing properties, having completed 43 conversions and remodels in the year to date as well as the opening of a second All Bar One at Edinburgh Airport. However, the group’s chief...

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Halfords revenue up against pre-Pandemic levels but issues profit warning

Halfords has recorded a period of strong revenue against pre-Pandemic levels, but warns that a lack of skilled labour could lead to lower profit margins. The motoring and cycling retailer saw an increase in revenue of 38.3% against pre-pandemic levels with an increase of 12.6% on a like-for-like basis. However, Halfords describes a challenging labour market, resulting in lower recruitment of skilled technicians in its Autocentre businesses, which the retailer expects will limit the growth of higher margin sales. As a result, Halfords has revised its expected underlying profit before tax for the 2023 financial year from £60m to £50m. Looking ahead to the 2024 financial year, the retailer said it remained particularly difficult to forecast with any certainty. It added that consumers will continue to face inflationary pressures, and so it does not expect a significant short-term recovery in discretionary spending. Halfords said it anticipates a year-on-year cost inflation in wages, energy and currency, but added that it will partially offset these pressures through reductions in freight and product costs, whilst continuing to reduce its cost base. “We remain confident in the longer-term outlook and believe the business is well positioned to capitalise on the strong platform we have...

News

ASOS Christmas sales dip amid challenging conditions

ASOS has seen its revenue drop after challenging economic conditions in the festive period. In the four months ending December 31, the online fashion retailer saw a fall in revenue of 3%, with UK sales seeing a dip of 8% from 2021. The group recorded a global revenue of £1.3m, down 6% from 2021. ASOS said this fall in revenue was broadly in line with its expectations, but anticipates a stronger second half to the financial year. The retailer cited weak consumer sentiment as a reason for the fall in UK sales. It said this was particularly significant in September, which the group said was a result of “national newsflow”, and December, which was affected by disruption in the delivery market. ASOS said that a comparatively strong December 2021, which saw an Omicron COVID variant push online sales up. José Antonio Ramos Calamonte, ASOS chief executive officer, said: “We are undertaking necessary strategic and operational changes, with our focus shifting from prioritising top-line growth to building a more relevant and competitive fashion business with a disciplined approach”. “We have made good early progress against a number of measures to simplify the business, including re-positioning our inventory profile, reviewing our operational...

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Guildford North Street regeneration plan rejected on affordable housing grounds

Plans to develop a key part of Guildford town centre have been rejected by local councillors who felt the scheme did not create enough affordable housing. On Wednesday evening, the proposals were thwarted by councillors in a hung vote which fell to a decision from the Planning Committee’s Chairman. There were also concerns issued by Surrey County Council, who opposed the plans, relating to public transport disruption caused by alterations to the bus station. Some members of the public also voiced concerns over the heights of the proposed buildings, while others consider the designs to be an eyesore in the historic town. A joint venture between the Berkeley Group and M&G, known as St Edward, looked to rejuvenate a brownfield site and pedestrianise North Street. The proposed mixed-use scheme would develop a residential quarter with 473 new homes. The site would include cafés, bars, and restaurants alongside amenity space. The final application was submitted in August 2022 after a lengthy consultation process which began in 2019. The currently derelict site has so far taken more than three decades to be redeveloped, with seven or eight previous proposed schemes failing to get off the drawing board. A mixed-use scheme was recently...

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Tenpin looking to open four new sites in 2023 after successful year

Ten Entertainment Group (TEG), the owners of entertainment centres Tenpin, has said it expects four new sites to be developed and open in 2023. The group, which operates 48 centres across the UK, also revealed that it had had a highly successful 2022 which saw a total sales growth of 87.6% compared to 2021. Like-for-like (LFL) sales growth against 2021 was up by 5.5%. The group added that LFL sales against pre-pandemic levels was higher by almost 40%. TEG invested in 11 centres in 2022 with six refurbishments and five bowling upgrades. Tenpin offers laser arenas, escape rooms, karaoke, arcades, pool tables, soft play, and food and beverage on top of its core bowling experience. “The Group has delivered its strongest ever trading performance in FY22, the first undisrupted financial year of trading since the pandemic began in March 2020. It is expected that profit for the 2022 financial year will be at the upper end of market expectations”, TEG said in its financial report. It added: “Our pipeline of new centres is healthy. There were two new centres opened in 2022 and we are excited that at least four more centres are expected to be developed and open in...

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Byron to slash restaurant count in half

Burger chain Byron is to close nearly half of its restaurants in a restructuring programme, after owners Calveton filed a notice of intention to appoint administrators earlier this month. Sky News have reported that the struggling chain will permanently shut down around ten of its 21 restaurants as part of a pre-pack administration process. Byron previously collapsed during the peak of the COVID-19 pandemic, which led to Calveton taking charge of the business. It is unclear how many jobs will be lost as a result of the restructuring. Sky have reported that a deal with administrators Interpath Advisory could be completed as soon as this week. At its peak, Byron operated dozens of restaurants, but was a victim of its own success when it rapidly expanded before the pandemic caused widespread problems in the hospitality industry. Other restaurant chains which suffered included Prezzo and Carluccio’s.

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Israeli donut concept to make UK debut

Israeli café and bakery chain Roladin is set to make its UK debut later this month with the launch of its ‘Donutelier’ concept. The brand, which operates around 95 sites in Israel, will open the bakery concept in the former Patisserie Valerie site on the corner of Charing Cross Road and Great Newport Street in London. As well as donuts, customers will be able to order coffees and pastries to have in-store or takeaway. The concept was founded in 1989 by brothers Kobi and Avi Hakak and also operates a Dutch store, having launched at the Westfield Mall of the Netherlands in December 2021. The wider bakery market continues to grow in the UK, and Roladin will face competition from the likes of Gail’s, Krispy Kreme, London-based donut chain Crosstown, and Pret A Manger, which itself recently reached a deal to launch in Israel. The Urban Concepts founder Arik Waiss is overseeing the launch of the business in the UK. Raven Rose acted on the deal.

Deals

LVMH makes a number of senior changes

LVMH, the parent group of Christian Dior, Louis Vuitton, and Hennessy amongst others, has announced a number of senior changes. Pietro Baccari, who has been in charge of Christian Dior Couture since 2018, will become chair and chief executive officer of Louis Vuitton. He succeeds Michael Burke, who will take up new responsibilities after 10 years as head of Louis Vuitton, overseeing the integration of Tiffany. Daughter of LVMH CEO Bernard Arnault, Delphine Arnault, who has been executive vice president of Louis Vuitton since 2013, will succeed Baccari as chair and chief executive officer of Christian Dior Couture. Meanwhile, Charles Delapalme, who since 2018 has been in charge of commercial activities at Christian Dior Couture, has been named managing director at the brand. Stéphane Bianchi, chair and chief executive officer of the Watches and Jewellery Division, will now oversee Tiffany and Repossi, who join the division. Bernard Arnault, commented on the integration: “The inclusion of Tiffany in the Watches & Jewellery Division is a natural step following the company’s successful integration within the LVMH Group. Stéphane Bianchi’s leadership skills, his understanding of products and markets, and his organisational acumen have enabled the Maisons in the division to achieve remarkable results...

News

Demand for pubs still strong with freehold prices up 41% in 2022

The average price of a trading freehold pub rose by 41% in 2022, according to new information from leisure property specialists Fleurets. This was primarily driven by sales in the South, which saw a dramatic increase in price of 54% to £1,148,750, while the average sale price in the North was £530,688. Although the prices of pubs have gone up, Fleurets said there was a reduction in transaction volumes, especially in the South with a fall of 35%. The price of bottom end freeholds, that is, pubs sold without accounts and often closed, also rose. Bottom end freeholds saw an increase to 15% to £373,712 in 2022. The amount of transactions did decrease, however, as more operators looked to balance the books and continue operating, through increased staycation trade, government support, and savings. Fleurets’ data also revealed that 37% of 2022 freehold pub sales were for alternative uses, which was in fact lower than in 2020 and 2021. The most common alternative use was for residential, at over 60%. While 52% of bottom end pub sales were for alternative uses, a substantial 83% of trading freeholds were sold for continued pub use. The number of pubs in England and Wales...

Insights

GPE looks to strengthen West End offer with three retail deals

Great Portland Estates (GPE) has announced that jewellery retailer Pandora will be opening its new concept store at its 70/88 Oxford Street development, taking the retail space to 96% let. This follows yesterday’s announcement that GPE has signed deals with fashion brands Dsquared2 and Hackett, who will be joining the real estate investment trust (REIT)’s Hanover development. The REIT said the signing of the three brands signifies continued demand for high-quality retail units across London’s West End. The two-storey Pandora store will be the jeweller’s third on Oxford Street and will sit directly opposite the Tottenham Court Road Elizebeth Line exit. The retailer will join competitive escape room concept Boom: Battle Bar, which opened at the end of 2022, and fashion retailer Reserved, occupying a total of 19,645 sq ft at 70/88 Oxford Street, set to open in the third quarter of 2023. Sarah Goldman, senior portfolio manager at GPE, said: “As a hugely popular and globally recognised brand, Pandora will add to the premium retail offering across our wider West End portfolio. Together with Boom: Battle Bar and Reserved, the development is becoming a prime destination on the doorstep of the Elizabeth Line station at Tottenham Court Road.”

Deals

SEGRO in £120m retail park deal

SEGRO has completed the acquisition of Bath Road Shopping Park in Slough. The £120m deal sees the real estate investment trust (REIT) take over the scheme from Royal London Asset Management, who purchased the site from The Crown Estate for £93.65m in 2016. The retail park is located next to Slough Trading Estate and covers 194,000 sq ft. Comprising of 10 retail units, roughly a third of which are vacant, the scheme provides immediate opportunities for asset management or redevelopment initiatives, SEGRO said. The remaining leases expire between 2023 and 2028. “Land suitable for industrial development is in high demand and short supply in the Thames Valley and the relatively short lease terms of the retail units creates an opportunity to redevelop the site into modern warehousing suited to a variety of users, including data centres”, said the REIT. SEGRO was represented by Knight Frank and CMS. CBRE and GunnerCooke advised Royal London.

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Investment in lower prices sees record Christmas for Sainsbury’s