Republic Close To Collapse: Sky Sources

Republic is expected to call in administrators on Wednesday putting 1,000 jobs at risk, according to Sky sources.

The youth fashion chain will become the latest casualty of the high street in the year to date, following the collapse of HMV, Jessops and Blockbuster.

Ernst & Young have been lined up as administrators, says Sky News City Editor Mark Kleinman.

Private Equity firm TPG owns Republic, which last month looked to switch to monthly rental payments in an attempt to avert cashflow problems.

The US-based buyout giant has injected new capital into the company on at least two occasions since it bought it two-and-a-half years ago - with around £20m pumped in over the course of 2012.

Tough trading conditions have hit the company in recent months, causing it to slow down its store-opening programme.

Republic, whose target market is young adults, sells brands including Diesel, Firetrap and G-Star.

Anusha Couttigane from retail analysts Conlumino said rumours of trouble at the retailer have been circling for some time.

"TPG cites crippling rental rates as the main cause for the company's breakdown, recently hiring KMPG in a desperate bid to offload some of its 121 stores," she said.

"In light of this, news of its administration suggests that attempts to renegotiate monthly payments have failed, bringing the business to a complete standstill and landlords facing the prospect of more vacant units on the high street."

She also stressed that its target youth market had been hard hit by the recession, adding: "Republic has failed to keep up with some pretty fierce competitors."

Related Stories

00.25 | 0 komentar | Read More

Heathrow Investment 'To Raise Ticket Prices'

Officials at Heathrow Airport have announced £3bn of investment in a move that is likely to leave passengers paying higher prices.

The proposals include the opening of the new Terminal 2 next year, improved check-in and baggage facilities, and more customer service training for staff.

The airport wants regulators to approve a five-year plan which will see the fees it charges airlines to use the airport rise over the period 2014 to 2019.

If approved, the charges would increase from the equivalent of £19.33 per passenger for 2012/13 to as much as £27.30 in 2018/19.

Heathrow accounts for 78% of all long-haul flights from the UK.

The charges, which need to be approved by the Civil Aviation Authority (CAA), will help pay for the investment.

Heathrow chief executive Colin Matthews said: "Heathrow is the UK's only hub airport and a strategically important national infrastructure asset. Heathrow faces stiff competition from other European hubs and we must continue to improve the service we offer passengers and airlines.

"We have invested billions of pounds in new facilities such as Terminal 5 in recent years and passengers say they have noticed the difference.

"Our plan for a further £3bn of private-sector investment will further improve the airport for passengers. The plan represents good value for money for airlines and passengers and comes at no cost to taxpayers."

British Airways is concerned about the price rises

He said the airport envisaged passenger numbers increasing from just under 70 million now to around 72.6 million by 2018/19.

Asked about the possibility of a third runway, Mr Matthews said that with all that would be need to be done in terms of political decisions and planning there was unlikely to be "any shovel going into the ground realistically for the period we are talking about (2014 to 2019)".

He said that the proportion of Heathrow passengers rating their journey as very good or excellent had increased from 48% in 2007 to 72% today.

While airlines have supported plans for better customer service they have concerns about the rise in charges.

British Airways said: "Heathrow Airport's charges have already tripled over the past 11 years. The charges must be reduced significantly over the coming years, especially when the airport is cutting investment by around 25% from next year onwards.

"We hope the regulator (the CAA) will give a fair ruling in the months ahead, which doesn't penalise customers and airlines."

Virgin Atlantic chief operating officer Steve Griffiths said: "We are totally committed to improving the passenger experience at Heathrow.

"However, we believe this can be done without a repeat of the incredibly steep price rises we have seen in airport charges in the last few years.

"Prices at Heathrow are triple the level they were 10 years ago. Clearly this is a concern for all passengers travelling through Heathrow, and all airlines operating there."

Heathrow's flight punctuality - the number of planes taking off or landing within 15 minutes of schedule - was 67% in 2007.

It has now gone up to 80% and the airport wants this figure to increase to 90% by the end of the decade.

Its chiefs said that while 4% of bags went missing in 2007, this figure is now down to 1.5%.

00.25 | 0 komentar | Read More

G4S Takes £70m Hit After Olympics Fiasco

Security company G4S has said its loss on the London Olympic security contract would stretch to £70m after finally agreeing a settlement with Games organisers.

The world's biggest security firm's reputation was badly tarnished when it admitted just weeks before last year's Olympics it could not provide 10,400 guards for the Games, forcing British troops to fill in.

G4S, which was subsequently hauled before MPs to explain the debacle, had previously estimated its hit on the contract - worth around £240m - to be around £50m.

Two G4S directors - chief operating officer David Taylor-Smith and Ian Horseman Sewell, who was head of global events - resigned in the wake of the independent review.

However, chief executive Nick Buckles, stayed in his post.

The group said it had also incurred additional costs of approximately £11m, relating to charitable donations and external fees and a further £7m relating to the cost of sponsorship and marketing.

All of these costs will be taken in the 2012 accounts as an exceptional charge.

The London Organising Committee of the Olympic and Paralympic Games (Locog) said taxpayers would not lose out because of G4S's shortcomings.

Its chief financial officer Neil Wood said the overall agreement reduced the payment due to G4S by £85m, comprising £48m to cover step-in costs by police and military and £37m primarily for project management failures.

He added: "The savings arising from this settlement brings the total savings to the public purse from the Locog venue security budget to £102m compared to the position in December 2011."

Commenting on the settlement, Mr Buckles, said: "We have accepted responsibility for the security workforce issues and, as a result of the settlement terms which we have announced, have ensured that the overall cost to the taxpayer has been reduced significantly against the planned cost."

He added: "We would like to reiterate our thanks to the military and the police for their support.

"We would also like to thank the 16,000 men and women of G4S who played their part in securing the Games despite the challenges faced by the group."

00.25 | 0 komentar | Read More

IT Staff Shortages Raise Cyber Crime Risk

The lack of skilled workers is hampering Britain's ability to protect itself from costly internet attacks, according to spending watchdog the National Audit Office.

The number of IT and cyber security professionals in the UK has not increased in line with the growth of the internet and it could take two decades to fill the gap, the NAO said.

Government, education and business representatives have told the NAO the country lacks technical skills and the current pipeline of graduates will not meet demand.

The cost of cyber crime to Britain is currently thought to be up to £27bn a year.

NAO head Amyas Morse said: "The threat to cyber security is persistent and continually evolving.

"Business, government and the public must constantly be alert to the level of risk if they are to succeed in detecting and resisting the threat of cyber attack."

The Government's strategy has already started to deliver benefits, the NAO said, with the Serious Organised Crime Agency catching more than 2.3 million compromised debit or credit cards since 2011, preventing a potential loss of more than £500m.

But, the watchdog warned, ministers must address the country's current and future cyber security skills gap, which includes a need for psychologists and law enforcers, as well as technical staff.

Education officials interviewed by the NAO said it could take up to 20 years to address the skills gap at all levels of education.

The report on the NAO's review of the strategy for cyber security said: "Interviews with government, academia and business representatives confirmed that the UK lacks technical skills and that the current pipeline of graduates and practitioners would not meet demand.

"A number of government departments commented that the UK depended on a small number of highly skilled people to participate in developing international technical standards.

"Interviewees were concerned about a lack of promotion of science and technology subjects at school resulting in the reported lower uptake of computer science and technology courses by UK students."

A shortage of IT and computer science experts has been raised before by ministers, while attracting and retaining talent is also a concern.

In 2012, the Intelligence and Security Committee highlighted GCHQ's inability to retain internet specialists in the face of competition from the private sector.

00.25 | 0 komentar | Read More

Hermes Reports Strong Sales As Demand Rockets

The Christmas shopping rush has helped Hermes report a 16.4% hike in sales at constant exchange rates.

The French luxury brand, known for its silk scarves and high-end handbags, said revenues hit 3.48bn euros (£2.98bn) in 2012.

"Sales exceeded the target for the year, driven by persistently robust momentum in the fourth quarter," Hermes said in a statement.

The company said it grew by an "impressive" 15% in Europe despite the on-going eurozone debt crisis, and by 14% in the US.

Sales in Asia excluding Japan were 25% higher, and it opened two new branches in Taiwan and China.

The results were boosted by what it described "persistently strong demand" for its leather goods, which include its iconic Kelly and Birkin handbags, costing around £10,000 each.

Its ready-to-wear and accessories division grew by 22%, while its watch sales were up 17%.

The introduction of new colours and materials helped its silk and textiles division grow by 16%.

Hermes, which is due to report its full-year results on March 21, said its operating margin is expected to be "slightly above the all-time high achieved in 2011".

Last month, Hermes' rival LVMH - the world's biggest luxury brand, which owns Louis Vuitton - also reported sales growth in its leather goods division.

The world's second largest luxury brand, PPR - which owns Yves Saint Laurent and Gucci - will report its annual results on Friday.

00.25 | 0 komentar | Read More

Vertu Launches The £7,000 Smartphone

A luxury hand-made smartphone, worth a whopping £7000, has been launched by a British firm.

Vertu, which is based and employs 1,000 people in Hampshire, has released the "Ti" following three years of sales growth and global expansion.

Its hefty price-tag is mainly due to a titanium-case, and a screen made of sapphire, which is only "one step down from the diamond, in terms of hardness".

The company used to be part of Nokia until it was sold to private equity outfit EQT last year.

Chief executive Perry Oosting told Sky News: "This is a new category, if you compare to a lot of other luxury categories that are established, so we are still at the beginning stage.

He added: "Today we do up to almost £300m in revenue so in a way we have created a new segmentation in a relatively new category."

Mr Oosting also said that sales mainly come from Asia, adding: "From a demographic point of view, our customers are mainly male, and Asia is an important market.

"Europe is our second market, main cities are London, Paris, Milan and the third is eastern Europe together with the Middle East."

Vertu's global sales turnover rose for the third consecutive year in 2012, continuing a trend that has seen sales grow every year since 2002, except in 2009.

The phone claims to have specially-tuned "symphonic sound" and a virtually scratch-proof screen.

It also has a "concierge" button which connects the user to a team providing "curated benefits and services" around the clock.

Rahul Sharma, retail analyst at Neev Capital, said: "Luxury goods have seen three years of extraordinary growth with the sector growing nearly 15%.

"This is in small part due to a recovery in consumption by the wealthy in the West, but the lion's share of growth has come from the sector's exposure to wealth in emerging markets.

"In China, the Middle East and much of the emerging world, these brands are hugely aspirational and as wealth increases there, consumption of luxury gods is increasing sharply.

"That said, this is no longer a rising tide floating all boats. The Chinese are maturing much faster than their Western peers and preferring either iconic, exclusive product (Hermes, Dior) or newness (Prada).

"This is perhaps why some logo-centric brands like Louis Vuitton, Burberry have seen much sharper slowdowns than other brands."

He also added: "It's ironic that Vertu comes out with this on the day Hermes (one of the most iconic and expensive brands in luxury goods) reports record-breaking results.

"Hermes Q4 sales grew at their fastest pace of 2012, despite slowing macro economic data. Hermes sales were especially strong in emerging Asia and in the US."

00.25 | 0 komentar | Read More

Ryanair: EU 'Will Block' Aer Lingus Merger

Ryanair has said the European Commission (EC) intends to prohibit its proposed merger with smaller Irish rival Aer Lingus.

The budget airline said the decision is a political one that is not based on competition law.

The company said: "Ryanair ... was notified this (Tuesday) morning at a state-of-play meeting with the EU Commission, that the EU Commission intends to prohibit Ryanair's offer for Aer Lingus, despite the fact that Ryanair has met every competition concern raised in the EU's statement of objections and during the review process."

The EC said it would launch a detailed investigation into Ryanair's bid in August.

Ryanair, which currently owns just under 30% of Aer Lingus, has already attempted to gain control of Aer Lingus twice but ran into opposition from the EC and the Irish government on both occasions.

Last month it was told that it had one last chance to submit measures to ensure the proposed £591m merger did not reduce competition.

Ryanair's latest offer to the Commission included ceding 43 routes to Flybe and handing the routes operated by Aer Lingus from London's Gatwick Airport to British Airways.

A spokesman for EU competition chief Joaquin Almunia said: "The Commission will take a decision in this case at the end of February or the beginning of March."

He declined to comment further on the Ryanair statement.

00.25 | 0 komentar | Read More

Barclays Cuts 3,700 Jobs In Bank Shake-Up

Barclays has announced 3,700 job cuts amid plans to cut £1.7bn in costs and improve standards.

Of these job losses, 1,800 will be in its corporate and investment bank and 1,900 will be in European retail and business banking.

Some 1,600 jobs have already been cut in the investment banking business since the start of the year, Barclays said.

Sky News revealed on Monday that thousands of jobs would go outside its investment bank as part of a streamlining programme overseen by the company's new boss Antony Jenkins.

But despite the redundancies, the bank - Britain's second largest - revealed it would still pay £1.85bn in bonuses to staff.

On average, payouts in its investment bank were £54,100, and the average bonus across the group was £13,300 - although these are below 2011's levels.

Mr Jenkins, who became Barclay's chief executive in August, told Sky's Jeff Randall the bank had made mistakes in the past

Unlike some of its rivals, Barclays did not receive a Government bailout

"We've got to do business in the right way - the right business in the right way," he said.

"I'll be very honest, we did get things wrong at Barclays in the past, as people in the industry did.

"We were too short-term focussed, we were too self-serving and on occasion we were too aggressive."

He also warned the bank would not be as profitable in the future as it had been in the past.

It comes as Barclays reports adjusted pre-tax profit of £7.048bn for the 12 months to the end of December - a rise of more than 26% on 2011.

Its investment bank performed even better, with profit before tax up 37% at £4.063bn.

Statutory pre-tax profit - which includes the fund set aside to compensate those mis-sold payment protection insurance, among other charges - was £248m.

Mr Jenkins revealed the outcome of a strategic review at the bank - known as Project Transform - which will see the group's total cost base reduced by £1.7bn to £16.8bn in 2015.

The bank also confirmed that its controversial tax avoidance unit would close, as revealed by Sky's City Editor.

"We intend to change what Barclays does and how we do it and have set out clear commitments against which our progress can be measured," Mr Jenkins said in a statement.

He announced he was waiving his bonus for 2012 earlier this month.

The bank's profit comes despite a difficult year at the bank, which saw its reputation - and the banking industry's as a whole - come under pressure.

Last week, Barclays said it had increased funds put aside for mis-selling to consumers and businesses by another £1bn, taking the total to £2.6bn.

And in the summer the bank was fined £290m for manipulating the interbank borrowing rate, Libor.

00.25 | 0 komentar | Read More

Horsemeat Crisis To Widen, Findus Backer Says

By Mark Kleinman, City Editor

The management of Findus UK has been slow to react to the scandal over contaminated ready-meals and has dealt incompetently with the public relations aspects of the crisis, according to one of the company's main shareholders.

In an exclusive interview with Sky News, Lyndon Lea, a partner at the private equity firm Lion Capital, complained that he had learned of the contamination of Findus beef lasagne with horsemeat three days after the products had been withdrawn from supermarket shelves.

"We were notified by the chairman of the company as a shareholder on Wednesday February 6 and the information passed was that there was a labelling issue on some Findus beef products," he said.

"Later that afternoon it was disclosed that the labelling issue was in fact horsemeat. I found out the following day."

Mr Lea, a prominent investor in British companies and a former owner of Wagamama, the restaurant chain, and Weetabix, the breakfast cereal, questioned Findus's approach to the crisis.

"Within hours [of finding out] I sent an email to the chairman stating that Findus needed to step forward and accept responsibility, apologise to the consumer, restore trust in the brand and be very visible in managing this crisis," he said.

"Findus took advice from its public relations adviser, Burson Marsteller, who gave exactly the opposite advice and felt that this was an industry issue and not a Findus issue."

Lyndon Lea was a co-founder of Lion Capital in 2004

Lion Capital acquired Findus in 2008 in a deal worth £1.1bn but ceded control of the business as part of a financial restructuring last year.

JP Morgan, the Wall Street bank, and Highbridge, a hedge fund manager it controls, now own two-thirds of Findus between them.

Mr Lea, who does not sit on the Findus board, said the company had managed the technical elements of the horsemeat issue capably but said the chairman, Dale Morrison, had compounded the crisis by not handling the reputational aspects in the same way.

Although Lion now owns only one-third of Findus' shares, Mr Lea ruled out a fire-sale of his firm's stake.

"I am enormously frustrated, yes. In any Lion-controlled investment we would not have handled the PR in the manner it has been handled by Findus," he said.

"We believe in the investment, we believe it is a good business, and we wouldn't look to any quick sale of our stake. It does, though, give me pause for thought about ever putting myself in a minority [investment] position again."

The Lion Capital partner said he suspected that "criminal activity" was behind the horsemeat scandal and denied that cost-cutting related to the financial restructuring of Findus was to blame.

"I don't think that's the case at all. If that were the case then what we're seeing more broadly in the food chain we would not be seeing," he said.

"Clearly, Tesco is not a private equity-owned company, and they're also having the same issues. Where there is intent and criminal activity, it is very hard to legislate for that."

And Mr Lea insisted that he would be comfortable with members of his family eating Findus beef-based ready-meals.

"Absolutely, I think it's very important to draw a distinction here. There have been no food safety or health issues reported with the consumption of horsemeat," he said.

"It's not something I or many people in the UK would choose to consume but there are no health issues with it, so on that basis, yes."

Mr Lea, who rarely gives interviews, also said Lion had launched its own probe into the issue but cautioned that this was at an early stage.

"Comigel supplied to Findus product that was contaminated. Logic would say that liability resides with Comigel," he said.

00.25 | 0 komentar | Read More

Sony In Talks Over Now! Music Stake

By Mark Kleinman, City Editor

The music major Sony is edging towards a deal to snap up a stake in the Now! compilation series as Universal Music Group continues to shed assets as part of its takeover of EMI, the rival label.

I have learned that Sony Music is the frontrunner to buy a 50% shareholding in Now!, which marks its 30th anniversary this year.

A deal would see Sony pay tens of millions of pounds for the stake, which at the moment is jointly-owned by Universal and EMI. The European Commission has ordered the sale of a number of labels following the acquisition last year of EMI by Universal, the world's biggest record label.

A number of other potential buyers of the Now! stake are understood to be waiting in the wings if the talks between Sony and Universal collapse. Universal intends to hold onto its existing share of the joint venture.

Now!, which is understood to have generated sales of just over £20m in 2012, is the leading music compilation franchise in Europe. The brainchild of music industry executives including Sir Richard Branson, who during the early 1980s headed Virgin Records, Now! will shortly launch its 84th album comprising chart hits from the previous three months.

As much as 95% of Now!'s European revenues come from the UK and Ireland, with the franchise having sold more than 80 million albums in the UK since its inception.

Last week, Universal announced that it had reached an agreement to sell Parlophone, the home of Coldplay and Pink Floyd, to Warner Music Group, another of the four majors which dominate the music industry.

Warner struck a deal to pay £487m for Parlophone, a price that exceeded industry expectations, meaning that when the deal completes, Universal will already have recouped almost half of the money it spent on acquiring EMI. That was despite the fact that Universal was a forced seller and underlined the strength of the interest in buying Parlophone.

Among the other bidders for Parlophone was Simon Fuller, the showbusiness tycoon, who had enlisted financial backing from an array of global investors.

Universal, which is owned by Vivendi, the French conglomerate, has already sold Mute, another label, to BMG, the fourth of the large record companies.

Universal declined to comment on the Now! sale process.

00.25 | 0 komentar | Read More