Posts from February 2023

Apple sees biggest drop in sales in three years

3rd February 2023

Apple saw a fall in sales as 2022 came to an end, with consumer budgets squeezed by the cost-of-living crisis. A fall in sales in the final three months of the year of 5% is the biggest drop seen at the tech giant since 2019. The firm’s profits fell by 13% to $30bn (£24bn). COVID-19 disruption in China, where iPhones are manufactured, as well as wider economic issues and the War in Ukraine were cited by Apple boss Tim Cook as reasons behind the company’s struggles: “As the world continues to face unprecedented circumstances … we know Apple is not immune to it”, he said. Sales of iPhones fell by 8% while sales of iMac computers saw a more significant fall of 29%. Ecommerce heavyweight Amazon also struggled over the Christmas period, with online sales taking a hit of 2% in the final three months of last year. Amazon’s profits also took a drastic hit, falling from $14.3bn to near zero within a year.

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Joint venture snaps up Craigavon shopping centre

3rd February 2023

A Northern Irish shopping centre which fell into administration in 2022 has been purchased for an undisclosed sum. Rushmere Shopping Centre in Craigavon collapsed in April 2022 after losing key tenants including Top Shop, Sainsbury’s, and anchor store Debenhams. It was then placed on the market in August with a price tag of £57m. The 470,000 sq ft scheme has now been purchased by Killahoey, a joint venture between Sheephaven and May Street Capital. Savills and CBRE NI were appointed as agents for a joint sale of the scheme. Ben Turtle, head of Savills Northern Ireland said: “The sale attracted a high level of interest from a number of domestic and international investors. This is a landmark transaction and underlines the continued high demand for quality retail assets in Northern Ireland.” Andrew Coggins, senior director at CBRE NI, added: “The sale of Rushmere reflects a resilient market and sets the tone for a strong year in the NI investment sector.”

Deals News

Screwfix opened record 87 stores in the last year in expansion drive

3rd February 2023

Trade retailer Screwfix has announced a record year for openings, with 87 stores launching within the last 12 months. Of those stores, 72 were in the UK, 10 were in the Republic of Ireland, while five opened in France. The most recent openings bring Screwfix’s total number of stores to 870, as it maintains a record of opening one store per week over the last decade. The retailer said the news stores have created more than 800 jobs in retail management, service assistant and supervisor roles, amongst others. John Mewett, Screwfix CEO, said: “The ongoing expansion of our network ensures we continue to bring Screwfix ever closer to our customers. “In response to sustained demand from tradespeople across the UK, Republic of Ireland and France, we have accelerated our store opening program so that our customers are always near a Screwfix store.”

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Costcutter owner increases stake in Sainsbury’s days after initial investment

2nd February 2023

The owners of convenience store chain Costcutter has upped its stake in Sainsbury’s less than a week after purchasing £193m worth of shares in the supermarket retailer. Bestway now controls 4.47% of Sainsbury’s voting rights, having acquired a 3.45% stake on January 27. The wholesaler said it had no intention to make a full offer for the supermarket when it made its initial investment. Bestway, which started as a chain of convenience stores in 1963, is now a multinational business with interests in the wholesale, pharmacy, real estate, cement and banking sectors. The group says it is the seventh-largest family owned business in the UK with a turnover of approximately £4.5bn.

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JD Sports aims for hundreds of new store openings

2nd February 2023

JD Sports has said it plans to spend over half of its capital expenditure in the next five years on opening between 250 and 350 new stores every year. This would see up to £360m per annum spent on its expansion plans. At the retailer’s capital markets event, JD Sports said it was also targeting double digit growth in revenue, market share, and operating margin. JD said it aims to generate £1bn per year from operating activities. Régis Schultz, CEO of JD, said the company is looking to become the world’s leading sports-fashion retailer: “Building on our strong existing position and attractive long-term market dynamics, we see significant growth opportunities ahead by expanding JD internationally, notably in North America and Europe.” The retailer came under fire recently for a data breach which saw the information of 10 million customers leaked.

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ScS “on track” to achieve sales expectations

2nd February 2023

Furniture and flooring retailer ScS said that it is encouraged by order levels as it posts a return to growth. In the retailer’s interim update, ScS said it was trading in line with expectations and added that it was on track to meet its full year market expectations. In the 26 weeks ending 28 January 2023, like-for-like (LfL) sales fell by 4.7% after LfL sales decreased by 9.1% between July and November, with ScS citing a tough comparative. However LfL sales at retailer increased by 2.6% in the last 10 weeks of the period, with order intake momentum improving “significantly” in a period which included ScS’s winter sale. ScS said it is continuing to invest in its operation and estate expansion with the opening of two new stores in Swindon and York, bringing its total store count to 100. The retailer added that its balance sheet remains strong, with cash reserves of £76.9m and no debt. ScS also said it was pleased with the progress made since its acquisition of Snugsofa.com in January, as it looks to increase its market share.

News

BRC: Inflation leaves shop prices at all-time high

2nd February 2023

The British Retail Consortium has has found that shop price annual inflation reached 8% in January, higher than the three-month average of 7.5%, leaving shop prices at an all time high. Food inflation also rose to 13.8% in January, a 0.5% increase from December and higher than the three-month average of 13.2%, now the highest on record. Non-food inflation increased to 5.1%, in line with the three-month average of 4.7% and a new high in this category. Fresh food and ambient food also saw an increase in inflation, with increases of 0.7% and 0.3% to 15.7% and 11.3% respectively, both are new records. Helen Dickinson OBE, chief executive of the British Retail Consortium, said: “Retail prices rose in January as discounting slowed and retailers continued to face high input costs.” “With global food costs coming down from their 2022 high and the cost of oil falling, we expect to see some inflationary pressures easing. However, as retailers still face ongoing headwinds from rising energy bills and labour shortages, prices are yet to peak and will likely remain high in the near term as a result”, she added. Mike Watkins, head of retailer and business insight at NielsenIQ, added: “Consumer demand...

Insights

Expanding chocolatier appoints new CFO

2nd February 2023

Hotel Chocolat has announced the appointment of Jon Akehurst as the company’s chief financial officer (CFO) and as an executive board director, as the retailer looks to expand. Akehurst is a chartered accountant who has worked in management and leadership roles with General Mills, Mars, Aggreko and most recently as CFO at Terumo Corporation. His previous work has given him experience working in branded goods, manufacturing and international development. Following an announcement made in December, Matt Pritchard has now stepped down as CFO after nine years with Hotel Chocolat. The company’s co-founder and chartered accountant Peter Harris will become interim CFO until Akehurst’s arrival. Hotel Chocolat recently revealed plans to open 50 new UK stores after a period of strong trading.

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Stonegate considering sale of pubs to pay £2.6bn tab

2nd February 2023

The UK’s largest pub operator Stonegate is reportedly considering the sale of 1,000 of its sites as it looks to pay off £2.6bn in debt. Stonegate Pub Group, which also owns the Slug and Lettuce and Be At One brands, is looking to recoup around £800m from the sales, Bloomberg reports. The TDR Capital-owned group acquired rival pub chain Ei Group in March 2020 for an estimated £1.27bn, bringing Stonegate’s total pub portfolio to around 4,500 sites. It then became one of the many hospitality operators hit by the Pandemic, recording a pre-tax loss of £746m in the twelve months to September 2020 followed by a further loss of £233m the following year. Stonegate is believed to be looking to convert many of its tenanted and leased pubs into managed operations. The follows recent news that JD Wetherspoon is looking to offload a number of its pubs, after its chairman blamed tax rates on the hospitality industry for the difficulties the sector has faced.

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Superdry boss denies plans to go private

2nd February 2023

The founder and chief executive of fashion retailer Superdry has denied plans for a buyout of the business. Julian Dunkerton said that despite press speculation that he is considering taking the business private, there was “no plans to do this at the moment”. Superdry noted that Dunkerton reserved the right to make or participate in an offer for the company with the board’s agreement or if a third party announced a firm intention to make a bid for the business. The value of the retailer’s shares has plummeted by over 90% since their peak in 2017. In December 2022, it was reported that Dunkerton was considering a sale of the business. In its most recent financial report, the retailer recorded an adjusted loss before tax of £13.6m for the first half of its 2023 financial year.

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Sleep.8 continues to expand with retail park opening

1st February 2023

Sleep.8 has opened its biggest store to date with the launch of its latest site at Lakeside Retail Park in West Thurrock. The newly opened store follows recent launches in Bluewater, Lakeside Shopping Centre, King’s Road, High Wycombe and Westfield Stratford. The new store has been designed especially for retail parks and includes features such as luxury massage gadgets, a mattress zone, pillow bar, and design lounge. Musi Chayla, vice-president of Sleep.8, said: “The surplus of floor space available at Thurrock’s destination retail space has allowed us to play on previous layout designs and create something really special that shows off everything Sleep.8 can offer shoppers.” “As someone who comes from and believes passionately in retail, it’s been distressing to see job loss, customer service decline and the demise of high street retail. Our online presence is strong but as a brand that believes in the importance of the high street, our priority is to look after our people and customers face-to-face wherever possible”, she added.

Deals

Earnings and revenue up at Travelodge as CVA ends

1st February 2023

Hotel chain Travelodge has reported a strong period of trading which has seen its revenue and Ebitda (earnings before interest, taxes, depreciation, and amortisation) rise above pre-Pandemic levels. The chain’s Company Voluntary Agreement (CVA) has also been implemented and completed. For the year ending 31 December 2022, Travelodge reported revenue of £910m, an increase of a quarter from the year before and higher than the £727.9m recorded in 2019, prior to the Pandemic. Adjusted Ebitda recorded between £210m and £215m was also higher than 2019 and 2021 levels of £129.1m and £81.1m respectively. 2023 has also continued to see strong sales for the hotel chain, with revenue in the first three weeks around 35% higher than pre-Pandemic levels: “The strong leisure and ‘blue collar’ business demand has continued in the first weeks of 2023 as customers continue to prioritise travel and seek out value in tough economic times”, Travelodge said. “Corporate midweek demand, particularly in central London, continues to recover albeit more gradually. While forward booking patterns are very positive, they remain predominantly short lead, so we still have very limited forward visibility”. Travelodge is also opening its first new site in Spain in ten years, with the launch of...

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Danish coffee brand looks to expand after taking eighth London spot

1st February 2023

Danish coffee brand Hagen is looking for more opportunities to expand after securing its eighth site in the Capital. The espresso bar has secured a spot at the ex-Bread Ahead bakery at 70 Hampstead High Street in an off-market deal. The rapidly expanding café chain adds to its existing locations in London including Chelsea, Mayfair, Belgravia, Marylebone, South Kensington and Notting Hill. The business, founded in London in 2017 but “born out of Copenhagen” by Tim Schroeder, is actively looking for more sites for expansion, acting agent Savills said.

Deals

Shaftesbury forms sustainability ratings partnership

1st February 2023

Shaftesbury has announced a partnership with sustainability ratings platform Good On You, as the property manager and owner looks to select more sustainable brands and aid its existing tenants with progressing sustainable practices. Shaftesbury will become the first landlord to partner with Good On You and will focus on providing information and tools to support its retail businesses across Carnaby, Soho and Seven Dials, as well as provide a platform to demonstrate their sustainability credentials to consumers. Data from Kantar recently revealed that sustainability is the top priority that consumers want businesses to focus on while separate research from McKinsey & Company found that 63% of customers want the brands they buy from to promote sustainability. Good On You’s system aims to provide a view of brand sustainability data while providing consumers with a five-star rating for businesses. Samantha Bain-Mollison, Shaftesbury’s retail director, said: “This is the next step in our mission to build more sustainable communities. It will enable us to not just consciously collaborate with ethically conscious brands but actively support and promote their positive steps towards sustainability.” Sandra Capponi, co-founder of Good On You, added: “Shaftesbury is in an exciting position to help drive change on some of the most...

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London & Associated Properties mourns long-standing chairman

1st February 2023

Sir Michael Heller, chairman of London & Associated Properties (LAP), passed away on January 30 at the age of 86. Sir Michael qualified as a chartered accountant before working with his father until 1970. He then joined the board of LAP in 1971 and became executive chairman in 1977. He shifted the focus of LAP from investment in mining to real estate, with a particular interest in shopping centres. LAP said it was “deeply saddened” by the loss of Sir Michael. Sir Michael was knighted in the 2013 New Year Honours List for Philanthropy, and is survived by his wife, sons Andrew and John, and daughter Nicola.

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Redhill scheme nearly fully let as major leisure fit out begins

1st February 2023

Redhill town centre development, The Rise, has now reached three quarters of its letting capacity as a major fit out begins at the mixed-use leisure scheme. Anchor tenants The Light have now begun the process of transforming the scheme’s entertainment space. Having initially signed only 35,000 sq ft of cinema space, the chain has now committed to a further 8,500 sq ft to develop further leisure offerings. The council-owned scheme will offer a six-screen cinema, a retro arcade, a nine-lane bowling arcade, mini-golf, and various other “surprise” leisure offerings. Property consultants GCW, acting on behalf of Reigate and Banstead Borough Council, say they now have just one 3,500 sq ft ground floor restaurant unit and one 13,500 sq ft leisure unit remaining to let at the scheme. The most recent signing to the Redhill scheme was restaurant operator Loungers, which agreed to a 15-year lease at a 4,600 sq ft unit. GCW spokesperson Phil Fishwick said: “The pace of lettings at this landmark entertainment destination in the heart of Redhill has been highly encouraging and we’re delighted to welcome Loungers into 2023, with the scheme now 75% let. “Acting on behalf of the Council, we expect much interest in the...

Deals News

Marble Arch BID boss supports Mayor’s call for tax-free shopping

1st February 2023

The chief executive of Marble Arch London Business Improvement District (BID) has backed calls from the Mayor of London Sadiq Khan to reinstate tax-free shopping for international visitors. The Mayor sent a letter to the Chancellor Jeremy Hunt on Tuesday night with the backing of major retailers including Selfridges and Burberry. The scheme, which allowed foreign visitors to claim back VAT paid on purchases, was scrapped after Brexit but reconsidered in the Government’s autumn growth plan. Plans to reintroduce the scheme were then reversed in October. The Treasury estimated the scheme would cost the Exchequer £1.3bn in 2024/25, increasing to £2bn in 2025/26. Executives from the Ritz Hotel and Heathrow Airport are amongst other figures backing the Mayor’s letter. Supporters of tax-free shopping believe it will make the UK a more attractive place for foreign tourists and encourage growth. In his letter, Sadiq Khan wrote: “Our rich ecosystem of shops, hospitality venues, and cultural attractions, is heavily dependent on both domestic and international tourists. “That is why together, London’s business groups and I have repeatedly called on the Government to support the return of international tourists back to London, in what is a highly competitive international market, by reinstating tax-free...

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