Daily Mail - 29.08.2019

Daily Mail, Thursday, August 29, 2019

LOSSES at Mike Ashley-backed

lingerie firm Agent Provocateur

narrowed as it continued its

turnaround plan.

In its first full year of trading

since it was rescued from

administration in a deal

backed by Ashley’s Sports

Direct, it posted a £9.6m

loss, compared with

£19m a year ago.

But difficulties on the

High Street hit its

stores. A spokesman

said: ‘A challenging

retail environment has

led to lower than expected

results from the physical

stores.’

Despite the problems, sales

rose by more than £1m to £18.1m.

Agent Provocateur was founded

in 1994 by fashion designer Vivi-

enne Westwood’s son Joe Corre

and his then-wife Serena Rees.

The company is known for its

racy lingerie, nightwear and

swimwear, with its bras costing

as much as £495 online.

It was snapped up by private

equity group 3i in a deal worth

£60m and rescued from collapse

after it was bought by Four Hold-

ings for around £30m in 2017, a

deal Corre called ‘a disgrace to

British business’.

Around 25pc of Four Holdings is

owned by Ashley’s Sports Direct.

AGENT PROVOCATEUR CUTS

LOSSES AS SALES RISE

A

S THE political rows rage
in Westminster, busi-
nesses and investors are
left in a state of frustra-
tion and uncertainty.
Firms, which have desperately been
hoping for clarity ever since the referen-
dum, still have no clue as to what the
trade and regulatory relationship with
the EU will be come November.
Boris Johnson’s move is seen by most
economists as making a No Deal Brexit
more likely. That is a prospect many busi-
ness leaders hate, and with good reason.
Seemingly endless political turbulence
translates in the business world to con-
tracts foregone, investment put on hold,
costly stockpiling and futile attempts to
divine what might happen next.
In the eyes of the world, Brand Britain is
being dented. When I meet executives and
senior bankers from overseas, they wonder
out loud what has happened to British com-
mon sense and pragmatism.
If the ‘do or die’ approach does result in
No Deal, virtually everyone agrees it will
hurt the economy. The only question is how
long-lasting and deep the harm will be.
The Chancellor’s spending review next
week will dangle some election carrots but
he’s conducting a review without knowing

how much he has in the kitty. It is only for

one year instead of the normal three, but

there is no clear vision even a couple of

months ahead.

Sajid Javid is promising money for schools,

hospitals and police while staying within

the current fiscal rule. If we have an orderly

Brexit then that would be possible, as he

would have around £15bn of leeway – but he

can hardly bank on it.

The financial system is in good shape to

cope with No Deal and big businesses have

made huge efforts to be as well-prepared as

they can be. But smaller exporting firms are

not necessarily able to do the same. Ability

to cope with a chaotic exit is only as strong

as the weakest links.

All hope is not yet lost for a departure

with a deal. ING’s economists point out

that despite all the tumult of the past few

days, Boris’s Plan A is still a revised agree-

ment with the EU.

The chances of pulling that off may have

increased after the constructive noises out

of the G7 summit.

Boris’s best card at this point is that EU

leaders believe him perfectly capable of

being reckless enough to crash the UK out

without a deal, a threat they never took in

the least seriously from Theresa May.

That is an incentive to compromise, par-

ticularly with the German economy on its

knees and the political situation in Italy, an

economic basket case, looking about as

volatile as our own.

The FTSE was unruffled by the tumult,

probably because a large number of its con-

stituents make significant earnings over-

seas and are not dependent on the UK

economy. That might be some comfort to

small investors.

The fear is manifesting itself on the for-

eign exchange markets, where the pound

fell sharply. It is down around 15pc against

the dollar since the referendum and the

pressure is likely to continue.

If we leave without a deal, sterling could

remain weak for a long period until new

trading relationships are established.

Even more perturbing, the pound is

reflecting fears of a Corbyn election win,

with all the horrors that implies for busi-

nesses and the economy.

Thomas Cooked

THoMAS Cook, which has agreed a rescue

deal with Fosun of China, arguably never

recovered from its appalling response to

the deaths of Christi Shepherd, seven, and

her brother Bobby, six, who were poisoned

by carbon monoxide from a faulty boiler on

one of its holidays back in 2006.

For years, it refused to accept responsibil-

ity, a hard-hearted approach that lost it

trust and made its own staff feel ashamed.

At one stage, it appeared that its former

boss, Harriet Green, had turned it around,

but that was a false dawn. Her management

techniques – she described herself as a

‘landa’ because she roared like a lion and

was, she thought, also cuddly like a panda –

were not to everyone’s taste.

She made way for current boss Peter

Fankhauser, who tried to get a grip on the

debts and to revitalise the offering with his

‘Casa Cook’ boutique hotels.

But even without problems like the falling

pound, Brexit and the rest, the core con-

cept of a package holiday just feels out-

dated, like kipper ties and purple loons.

It’s a relief Thomas Cook has been saved

but, with shares down 93pc in a year, inves-

tors have had the holiday from hell.

Another political pounding

Hospital boom

is just the tonic

for WH Smith

PATIENTS and visitors are

flocking to WH Smith stores

at hospitals – making them

more popular than its train

station shops.

The hospital sites are

now the second-largest

division in its travel business,

after airports.

Analysts said demand at air-

ports, hospitals and train sta-

tions has put the retailer on

course for a near 7pc rise in

full-year profits to £155m, as it

moves away from the troubled

High Street to focus on its

booming travel division.

In a trading update, WH

Smith said it has also been

opening post offices in stores

where it has too much space,

and it now hosts 202 of them

at its town and city centre

shops. The company is also

trying to sell more stationery

to offset less profitable news-

papers and magazines.

Analysts were full of praise

for WH Smith as chief execu-

tive Stephen Clarke (pictured)

prepares to step down from

his role in october, the day

after its full-year results.

Under Clarke, 51, it has

opened more stores and now

has 867 travel shops and 607

High Street outlets. He has

also taken WH Smith across

the pond after buying Ameri-

ca’s largest airport retailer of

consumer electronics, In

Motion, for £155m last year.

Shares have almost trebled

in value since he took the job

in 2013. WH Smith’s managing

director of High Street stores,

Carl Cowling, will replace him.

John Moore, senior investment

manager at Brewin Dolphin,

said: ‘WH Smith is a rare retail

success story against the tur-

moil of the High Street – a

credit to its management.

‘It has delivered meaningful

returns to shareholders. The

inevitable question is how long

this can go on for. But, with

continued scope for interna-

tional expansion, there doesn’t

appear to be any significant

disruption heading its way.’

by Hannah Uttley

Ted Baker Japan deal

TED Baker has ended its
solo efforts to break into
the Japanese market by
signing a five-year licensing
deal with local operator
Sojitz Infinity.
The fashion chain
launched in Japan in 2012
and has five stores, but
Sojitz will take over expan-
sion operations, launching
in department stores and
the High Street, and

improve its online offering.

Bosses at Ted Baker

said the deal will cost

around £4m, and insisted

pre-tax profits will increase

from the agreement in

future years.

Chief executive Lindsay

Page said: ‘We firmly believe

that Japan has the long-

term potential to be an

important market for the

Ted Baker brand.’

SALES at De Beers dived by

44pc as a slump in demand

for diamonds took its toll.

It sold £229m of the gems

at its latest auction in

southern Africa, more than

the £204m it made in the

previous sales round, but

down from the £411m from

the same period last year.

It sells rough-cut dia-

monds to companies that

then polish them and turn

them into jewellery and

other products. Brokers SP

Angel said De Beers has

made sales of £2.9bn so far

in 2019, below the £3.2bn

figure at this time in 2018.

The market has been hit

by falling marriage rates, a

backlash against blood

diamonds and the decline

of retail.

HSBC will offer rebates and

fee reductions to smaller

businesses in Hong Kong,

as it tries to curry favour

after being accused of bow-

ing to pressure from China.

The British bank, the larg-

est lender in Hong Kong,

wants to provide relief as

the city economy struggles.

Hong Kong is on the brink

of its first recession in a

decade, as pro-democracy

protests paralyse shopping

areas and deter tourists as

they object to Beijing’s

influence over their govern-

ment. Last week HSBC was

criticised for running an

advert which ‘condemned’

the disruption.

HSBC’s Terence Chiu

said: ‘We have spent time

listening to our customers

and have heard their voices

at this difficult time.’

Diamonds lose lustre HSBC’s Hong Kong cut

Page 73

2014 2019

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Ruth

Sunderland

BUSINESS EDITOR