Intu Warns of Closures

The owner of some of the UK's biggest shopping centres, Intu, has said there are doubts that it can survive unless it raises extra funds. Its comments came as the firm - which owns Manchester's Trafford Centre and the Lakeside complex in Essex - reported a £2bn loss in 2019. The weakness in the retail sector meant Intu wrote down the value of its shopping centre sites by nearly £2bn. Intu will try to raise extra cash after an earlier plan to raise £1bn failed. The collapse and contraction of High Street retailers has left landlords such as Intu struggling to fill vacant space. At the same time, Intu has run up debts of nearly £5bn. In January, the firm approached its shareholders to ask for more money amid the downturn in the retail sector. But last week, Intu said it was at risk of breaching debt covenants after it was forced to abandon the fundraising attempt. It said "extreme market conditions" deterred investors from giving fresh cash. To help it keep going, the firm said it would try to engage with investors, or it might have to sell more of its assets. The company has already been selling shopping centres to raise cash.

Intu Closures

Morrisons Paying Up

Supermarket chain Morrisons is to pay its small suppliers immediately to help keep them afloat amid coronavirus uncertainty. The move aims to help suppliers get through any difficulties caused by the spread of the disease, a spokesman said. Morrisons is the first major UK supermarket to make this kind of change to its payment terms. It follows government measures to support small firms and the UK economy. Small firms supply Morrisons with thousands of its products. Paying them immediately will help them weather any difficulties they face through disruptions to their manufacturing processes, or if any of their staff go sick, the spokesman said. "We're aiming to help them through the next weeks and months," he said. "We want to help local producers, farmers, and fishermen during an uncertain time." For the smallest suppliers, with an annual turnover of £100,000 or less, the normal Morrisons payment period is 14 days. For firms with a turnover between £100,000 and £1m, that period is from 30 to 60 days. All firms with a turnover of up to £1m will be paid immediately. For larger firms, the payment period will remain at 60 days.

Supplier Payment

Super Mario Lego

Lego and Nintendo have announced a joint product named Lego Super Mario, which combines the toy maker’s playsets with the gameplay of the Mario platformers. Although Lego has collaborated with other video game franchises in the past, such as Sonic the Hedgehog, this is the first time Mario has appeared in Lego form. Lego Super Mario is being described as a product line rather than one-off. The Lego Super Mario sets seem to be aimed at a younger crowd, of around five- to nine-year-olds. Lego is betting big on physical stores despite falling demand in the wider toy market. It plans to open 150 branded shops around the world in 2020, having opened the same amount last year. Lego's chief executive, Niels Christiansen, told the BBC that he "wanted people to get their hands on bricks and be a part of the brand". The company estimates that the global toy market shrank by 3% in 2019.

Super Mario Lego

John Lewis Bonus Cut

John Lewis has warned it could close shops as a plunge in profits forced it to cut staff bonuses to their lowest level in almost 70 years.  The retailer, which also owns Waitrose, has launched a review of the business which it said would involve "right sizing" its stores across both brands.  The review would involve store closures "where necessary" as well as space reduction in existing stores, it said. The John Lewis Partnership is owned by its staff - known as partners - who usually receive a bonus each year. This year, staff bonuses have been set at 2%, the lowest since 1953 when it paid no bonus.  Profits at the partnership dived by 23% last year to £123m - the third year in a row that profits have fallen - as it continued to struggle with the slowdown in consumer spending. The key competitive edge John Lewis has is customer service, that is delivered by its staff. If you take away part of their remuneration then your customer service levels are likely to be impacted.

John Lewis Bonus

Flybe Collapse

Flybe, Europe’s largest regional airline, has collapsed into administration with the loss of more than 2,000 jobs, less than two months after the government announced a rescue deal. The impact of the coronavirus on flight bookings proved the last straw for the Exeter-based airline, which operates almost 40% of UK domestic flights, as the government stalled on a controversial £100m loan.  Before the viral outbreak, Flybe was already struggling with rising fuel costs – a key factor in any airline’s ability to make a profit – soft demand and competition. The airline employed more than 2,000 people directly and about 8 million people a year used its services. Flybe has long struggled to balance the books, despite cost-cutting plans and redundancies, and was reporting losses of about £20m a year before the Connect takeover.
Flybe Collapse

Panic Buying

Tesco, the UK's largest grocer, has begun restricting sales of essential food and household items as a result of coronavirus stockpiling. Shoppers are limited to buying no more than five of certain goods, including antibacterial gels, wipes and sprays, dry pasta, UHT milk and some tinned vegetables. The rules apply in stores and online.According to a survey from Retail Economics, as many as one in 10 UK consumers is stockpiling, based on a sample of 2,000 shoppers. UK retailers have been warned that they face prosecution if they exploit the coronavirus scare to hike prices for products such as hand sanitisers and face masks. The Competition and Markets Authority (CMA) has told suppliers to act responsibly and said it was monitoring pricing practices. It comes as Facebook and Amazon have cracked down on profiteers hiking prices online of face masks and hand sanitisers.

Panic Buying