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Former employees of Woolworths have won compensation worth up to £67.8m following an employment tribunal ruling that administrators failed in their legal duty to consult with the employees’ union USDAW before making redundancies. Woolworths collapsed in late 2008 and by January 2009 almost 30,000 employees had been made redundant. The tribunal has awarded more than 24,000 workers 60 days’ pay, capped at £300 a week. However the compensation award excludes people who worked in smaller stores where fewer than 20 redundancies were made. As Woolworths was in administration at the time of the redundancies, responsibility for the compensation payments rests with the taxpayer, through the government’s Redundancy Payments Office.
Following a public outcry and pressure from politicians the chairman and chief executive of the mostly publicly-owned Royal Bank of Scotland have decided to forego their annual bonuses.
Subway, the sandwich restaurant chain, plans to open 600 new stores in the UK and Ireland by 2015. There are currently 1,423 Subway stores in the UK, all of which are independently owned and managed by franchisees. The company says that the new openings will create 6,000 jobs.
Asda plans to open 25 new stores across the UK in 2012 as part of a £500m investment that will see the creation of 5,000 jobs. In addition to the new stores Asda will open three new depots and refurbish 43 of its existing stores.
The value retailer Peacocks has been put in the hands of administrators. Peacocks operates around 563 stores and 48 concessions and employs approximately 9,600 people. The stores remain open while the administrators seek a buyer for the business. The administrators have made 249 head office staff redundant.
Premier Foods is to cut around 600 jobs as part of its cost saving programme. The heavily indebted food manufacturer is divesting itself of its non-core businesses and plans to focus on what it calls its eight Power Brands of Hovis, Ambrosia, Mr. Kipling, Sharwood’s, Loyd Grossman, Bisto, Oxo and Batchelors. Michael Clarke, chief executive officer of Premier Foods, said:“We continue to deliver on our plans to stabilise the business and invest in our recovery and future growth. While decisions to reduce the workforce are always difficult, I’m convinced we are taking the right steps in the long term interests of the business, employees and our stakeholders.”
The leading US video-on-demand company Netflix has launched in the UK. Offering a range of films and TV series from the UK and US across a range of platforms including consoles and iPads, Netflix is going into direct competition with rival LOVEFiLM, which was established in the UK in 2004.
Aon, the global risk management, insurance, HR services and outsourcing firm, is moving its corporate headquarters to London from Chicago. The company says that the move gives it greater access to emerging markets, proximity to Lloyd's and the London market, as well as near and long term financial benefits.
Little Chef, the roadside restaurant chain, is to close 67 of its 161 sites. The company says that the sites earmarked for closure have been trading unprofitably for a number of years “due to a variety of economic and locational factors”. The closures are expected to result in the loss of between 500 and 600 jobs.
The gift retailer Past Times has gone into administration and closed 47 of its 98 stores, making 500 people redundant. The remaining stores continue to trade for the time being.
ICANN, the body that regulates internet naming conventions, is expanding the domain naming system so that owners of websites can register to buy the suffix of their choice. Businesses will be able to replace the conventional .com, .co.uk or .net in their web address with their brand name or some other suffix related to their activities or geographical location; for instance .tesco, .bank, .shop, .sport or .london. However the new “generic Top Level Domains” do not come cheap - the application fee set by ICANN is $185,000.
Channel ferry operator SeaFrance has been forced into liquidation by a French court. Almost 1,000 jobs will be lost including 127 in the UK. The company went into receivership in November 2011 and a proposed bailout by the French government was deemed illegal by the European Commission. The French court blocked an attempt by a group of SeaFrance workers to take over the business, which it said was not viable. SeaFrance carried more than 3.5 million passengers a year on the Dover-Calais route.
Microsoft is suing the electrical retailer Comet, who it accuses of producing and selling 94,000 CDs containing counterfeit versions of Microsoft software. The CDs were sold as recovery disks to Comet customers who had bought PCs and laptops that were pre-loaded with Windows Vista and Windows XP operating systems. Comet denies that it infringed Microsoft’s intellectual property, saying that it believes it acted in the best interests of its customers who it considered to be adversely affected by Microsoft’s decision to stop supplying recovery discs with new computers.
Approximately 1,610 full and part-time employees have been made redundant following the failure of administrators to find a buyer for the concession business of Barratts Priceless Group.
The toy retailer Hawkin’s Bazaar has gone into administration. The administrators have closed down 40 permanent Hawkin’s Bazaar retail units and six concession stores, resulting in the loss of 302 jobs. There were a further 35 redundancies at the company’s head office. It is hoped that a buyer can be found for the remaining 25 stores as well as the group’s internet, wholesale and direct selling operations.
The supermarket chain Morrisons will be opening 25 new stores and creating more than 7,000 new jobs in 2012. The company says that typically more than half the new employees at a new store are previously unemployed and 75% are from the local area.
The Financial Services Authority has fined HSBC £10.5m for giving inappropriate investment advice to elderly customers. An HSBC subsidiary, NHFA, advised 2,485 customers with an average age of 83 to invest in long-term investments to pay for their care. The advice and sales were unsuitable because in a number of cases the individual's life expectancy was below the recommended five-year investment period. HSBC estimates that the amount of compensation to be paid to NHFA customers or their estates will be approximately £29.3m in addition to the fine. On the same day that the fine was announced HSBC said that it would be cutting 330 jobs in the UK.
Starbucks plans to open 300 new stores in the UK, including 200 drive through-outlets. The company says the expansion will create 5,000 jobs over the next five years, mainly in the Midlands and the North of England.
Latest company mergers and acquisitions:
The language services provider Applied Language Solutions has been acquired by Capita for £7.5m. The deal gives Capita greater access to the language services market.
The law firm Rowlands Field Cunningham has been bought out of administration by Linder Myers. The deal is expected to boost Linder Myers’ annual turnover by £5.4m to 16m.
The Indian commercial vehicle manufacturer Ashok Leyland has increased its stake in bus maker Optare to 75%.
The computer software provider Proqui has been taken over by Ideagen. The acquisition gives Ideagen access to highly regulated markets such as aerospace & defence, healthcare, energy and manufacturing.
Travis Perkins has purchased the remaining 70% of shares it did not already own in Toolstation. The deal, which values the company at £42m, will see Toolstation be integrated into Travis Perkins’ consumer division, which includes Wickes and Tile Giant.
The milk processing and distribution company Robert Wiseman has been acquired by the German dairy company Muller. The deal, worth £280m, gives Muller increased access to the UK market, where Robert Wiseman is responsible for 30% of the fresh milk consumed every day.
A £1.4bn deal has seen DS Smith purchase the corrugated containers manufacturer SCA Packaging. The acquisition will increase DS Smith’s presence across continental Europe.
The forecourt operator Motor Fuel Group (MFG) has been acquired by a consortium led by experienced businessman Alasdair Locke and backed by the investment firm Patron Capital. A new management team, led by chief executive William Bannister, has taken over at the company, which runs 58 petrol stations across the UK.
Alshaya, one of the largest retailers in the Middle East, has bought the lingerie retailer La Senza out of administration. As part of the deal 60 stores across the UK will be retained, with Alshaya aiming to invest £100m in new product collections and store redesigns over the next two years.
A £20m deal has seen the sports and casual wear retailer JD Sports purchase Blacks Leisure Group.
David Sands Ltd, which runs 28 food stores in Fife, Kinross and Perthshire, has agreed to be acquired by The Co-operative Group, which is the 4th largest food retailer in Scotland with 370 stores.
The shoe retailer Barratts Priceless has been bought out of administration by its existing management team in a deal which includes 89 stores.
The ethical fashion label and online retailer Frank & Faith has been purchased by Spark Etail.
The publishing company Dods has acquired the political intelligence and parliamentary monitoring firm DeHavilland from Emap. The deal, worth £12.8m, is part of a long term strategy to refocus on political information publishing.
Energos Holdings, which specialises in recovering energy from waste materials, has purchased BioGen Power.
A £4.5m deal has seen the employee ownership specialist Baxi Partnership purchase Camco Advisory Services, in a deal which means the number of people employed by Baxi has increased from 9 to 90 in the last twelve months.
A £75m deal has seen the computer security firm Symantec has acquire the cloud-based service provider LiveOffice. The acquisition will allow Symantec to extend its compliance services to the cloud platform.
The online accommodation websites pureholidayhomes.com and @Leisure-Group have merged. @Leisure-Group is one of Europe’s largest providers of accommodation rentals, offering more than 300,000 holiday properties in more than 30 countries across the continent.
The desktop virtualisation software provider DeskStream, headquartered in the USA, has purchased the Belfast-based WorldDesk, which specialises in cloud computing software.
The cyber security consultancy 7Safe has been bought by PA Consulting Group, allowing PA to offer a complete range of cyber security services.
Aldersgate, the investment vehicle run by billionaire businessmen David and Simon Reuben, has acquired Arena Leisure for £167m. Arena runs seven racecourses in the UK, including Lingfield Park, Doncaster and Royal Windsor.
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Saab Great Britain, the UK distributor of the troubled Swedish car manufacturer, has gone into administration. Saab GB has a 58-strong dealer network and employs 55 staff at its Milton Keynes headquarters. It owns Saab City, which operates two London-based dealerships and employs 65 staff. The company is looking for a buyer.
Hilton Worldwide is to open 20 new hotels in the UK, creating 1,500 new jobs. In addition the company says that it is safeguarding 1,900 jobs in the hotel sector by converting 10 existing hotels to the Hilton Worldwide portfolio.
Panasonic says that the Sanyo brand will be discontinued by April 2012. Panasonic bought its rival in December 2008 for £2.8bn.
Portsmouth Football Club is once more facing an uncertain future after parent company Convers Sports Initiatives entered administration. Club chairman and co-owner of CSI Vladimir Antonov has resigned from the Portsmouth board following his arrest for an alleged £250m fraud at AB Bankas Snoras, a Lithuanian bank of which he is the main shareholder. The Championship club previously became the first in Premier League history to enter administration and receive a points deduction in 2010.
In his Autumn Statement the Chancellor of the Exchequer announced that the state pension age will be raised to 67 in 2026, a decade earlier than previously planned. The Chancellor says the change will save the UK in excess of £50bn. As a result of the Pensions Act 2011, women's state pension age will be equalised with men's at 65 in November 2018. It will then rise to 66 in October 2020.
Toyota is to move all European production of its hatchback Auris model to the UK, creating up to 1,500 new jobs. The company is investing €265m in the UK to implement the change and says it will launch a first recruitment phase of around 500 from the middle of 2012. Currently the Toyota Auris is produced both in Turkey and the UK. Toyota says that regrouping production to a single plant will lead to higher efficiency. The sedan model will now be produced in Turkey. The Toyota Avensis will continue to be produced in the UK. Toyota produced 68,743 Auris and 68,366 Avensis vehicles in the UK in 2010.
The heavily indebted travel group Thomas Cook has come to an agreement with its lenders, which include Barclays, HSBC and RBS, on a new £200m loan facility. The announcement that the firm was in talks with its bankers led to fears for the company’s future and its shares initially fell by more than 70%. Commentators have questioned why Thomas Cook’s former chief executive Manny Fontenla-Novoa was paid bonuses totalling more than £15m over the past four years when the company was in such a poor financial state. In the coming weeks Thomas Cook is expected to announce the closure of hundreds of high street travel agents, with the loss of thousands of jobs.
Investec is to become the new title sponsor of Test match cricket for the next 10 years. As part of the agreement the international specialist bank and asset manager will receive a range of sponsorship and advertising rights which will include ticketing, hospitality and access to England players. Investec replaces npower and becomes only the third company ever to sponsor Test match cricket in this country.
Carphone Warehouse and Best Buy are to close the failing Best Buy UK business that is jointly owned by the two companies. The Best Buy brand entered the UK in 2008 with plans to open 200 out-of-town “big box” electrical goods stores, copying the successful business model of Best Buy in the US. However the launch coincided with the global recession and the brand failed to take off in the UK with the business incurring its owners losses of around £200m. About 1,100 staff are employed in the company’s 11 stores and the company says that the majority of them will be offered alternative positions within Carphone Warehouse.
The home insurance and emergency assistance company HomeServe has suspended all telephone sales and marketing activity and is retraining its telephone sales staff following a review by Deloitte that found that its processes did not reach the required standard. HomeServe says that it will not recommence outbound sales calls until staff have been through a comprehensive retraining programme and until it is “confident that all sales procedures meet the standards it expects”. The news caused the value of HomeServe’s shares to fall by 25% on fears of an investigation by the Financial Services Authority.
Ofgem has fined npower £2m for breaching its regulations on the way energy companies handle customer complaints. The regulator says that npower failed to record all the required details of complaints received, didn’t inform customers fully about the redress service provide by the Energy Ombudsman, and had inadequate policies and processes for dealing with complaints in an efficient and timely manner. Ofgem says that npower has addressed and remedied all the breaches of the regulations which it had identified. Ofgem is currently investigating the way in which EDF Energy handles complaints.
The nightclub operator Luminar has gone into administration. The company runs 76 of the largest nightclubs in the UK, including the brands Oceana, Liquid and Lava & Ignite. Luminar is thought to owe more than £80m to Lloyds, Barclays and Royal Bank of Scotland.
RBS Equity Finance has launched a new retail savings bank, Shawbrook Bank, that it hopes will lend more than £250m to small and medium sized enterprises over the next 12 months. As well as offering loans to SMEs, Shawbrook will provide savings accounts and secured loans to individuals. The new bank will not have a branch network and will promote its services through brokers and financial advisors.
Users of Research In Motion’s BlackBerry devices suffered three days of interrupted access to emails, the internet and message services in October. The outage generated a considerable amount of bad publicity for the smartphone maker at a time when it is already losing market share to rivals such as Apple’s iPhone and, in particular, phones running on Google’s Android software. The value of Research In Motion’s shares has fallen by more than 60% in the last two years, reflecting the decline of the BlackBerry brand.
The helicopter firm AgustaWestland is to cut 375 jobs at its headquarters in Yeovil and at its base in Farnborough. The Anglo-Italian company says that declining business from the Ministry of Defence and an increasingly competitive international market mean that it has to operate on an even more cost-effective basis.
The BBC has announced plans to cut around 2,000 jobs as part of its efforts to save £670m a year by 2016/7. More than half of the savings will come from changes to operations, but there will also be some changes to services, including greater sharing of news bulletins between radio stations, the broadcasting of repeats of programmes on BBC2 during the daytime, a refocusing of the Asian Network with a 34 per cent reduction in its content spend, a reduction in Red Button transmissions and the replacement of the HD channel with an HD version of BBC Two. The savings are required because the Government has frozen the licence fee until 2017, and the BBC has assumed new funding responsibilities, including for the World Service, S4C, BBC Monitoring and local TV and broadband.
SuperGroup, owner of the Superdry clothing brand, has warned that supply problems are likely to reduce its profits by up to £9m this year. An upgrade to SuperGroup’s warehouse management systems resulted in a significant, temporary reduction both in the amount of stock and range of sizes reaching its UK stores. Last year SuperGroup made profits of £47.3m and the news caused the value of the company’s shares to fall by more than 20%.
Ofcom has taken over responsibility for the regulation of the UK’s postal services from the previous regulator Postcomm. Ofcom is now responsible for safeguarding the UK’s universal postal service, which includes the requirement for Royal Mail to offer a six day a week, one price goes anywhere, postal service throughout the UK. Ofcom already regulates the television, radio, telecommunications and wireless industries.
Amazon is to launch a low-price tablet computer that it hopes will challenge the market dominance of Apple’s iPad. The Kindle Fire is smaller than the iPad and requires a wifi connection but unlike the iPad 2 it does not have a camera or a microphone. However the device will retail for around £130, less than half the price of the cheapest iPad. The Kindle Fire runs on Google’s Android software but apps must be downloaded from Amazon’s online store.
BAE Systems is to cut nearly 3,000 jobs within its Military Air & Information and Shared Services businesses and at its head office. The bulk of the job losses will be in the north of England, with 900 likely to go at Brough in East Yorkshire and 1,400 at the company’s sites in Lancashire. BAE Systems’ chief executive, Ian King, says, “Our customers are facing huge pressures on their defence budgets and affordability has become an increasing priority. Our business needs to rise to this challenge to maintain its competitiveness and ensure its long term future.”
Jaguar Land Rover is to open a new engine factory near Wolverhampton, creating up to 750 jobs. Tata, the car firm’s Indian owner, is to invest £355m in the factory with the UK government providing up to £10m through its Grant for Business Investment scheme.
Kingfisher, the owner of the home improvement brands B&Q and Screwfix, is to open 80 new stores and create over 1,200 new jobs across the UK this year. The company says that 40 new Screwfix stores will be opened by the end of January 2012, in addition to the 13 already opened in 2011. This will bring the total number of Screwfix shops to 215. Kingfisher also acquired 29 former Focus stores earlier this year, which it is converting to the B&Q brand.
The Portuguese fashion and lifestyle brand Sacoor Brothers is entering the UK market for the first time. The 21 year-old-company is opening stores at the new Westfield Stratford City, Westfield London and Bluewater in Kent.
Ofcom has fined TalkTalk and its subsidiary Tiscali UK £3m after the companies incorrectly billed tens of thousands of consumers. Ofcom found that between 1 January 2010 and 4 March 2011 the companies had wrongly issued bills to 65,000 consumers for services they had not received, in particular to customers who had closed their accounts. In addition to the £3m fine, TalkTalk has paid over £2.5m in refunds and goodwill payments to the affected consumers.
The owners of Manchester United plan to float the football club on the Singapore stock exchange. It is thought that they will use part of the proceeds to pay down some of the club’s £510m debt.
Mothercare is to close 110 stores in town centres across the UK within the next two years. The retailer says that the closures will reduce its occupancy costs by £18m and increase UK profit by at least £4m. Mothercare will instead focus on its out-of-town parenting centres, its direct-to-consumer business and its new wholesale business, which includes a clothing partnership with Boots.
Aegis Ltd, the Indian outsourcing services provider and part of the Essar Group, is to enter the UK and European market for the first time, creating 600 new call centre jobs in Manchester. Aegis plans further European expansion and will open a number of customer service centres across the continent in the next two years.
The Financial Services Authority has fined Willis Ltd £6.9m for failings in its anti-bribery and corruption systems and controls. The FSA says that between January 2005 and December 2009, Willis made payments totalling £27m to overseas third parties who assisted it in winning and retaining business from overseas clients. The FSA investigation found that Willis failed to ensure that it operated a sufficiently robust control environment surrounding payments to overseas third parties and “gave rise to an unacceptable risk that these payments could be used for corrupt purposes, including paying bribes”. The £6.9m fine is the biggest fine imposed by the FSA in relation to financial crime systems and controls to date.
John Lewis is to increase its department stores' presence in the UK by opening ten new “flexible format” smaller shops. On average John Lewis’ major department stores have a selling space of 132,000 sq ft, and 'John Lewis at home' shops an approximate 40,000 sq ft. The new stores will be between 65,000 and 100,000 sq ft, tailored for individual locations. The first new flexible format store is to be located in Exeter city centre and will open in 2012. Each of the ten new stores will create around 300 new jobs.
The struggling music retailer HMV has secured a £220m loan and revolving credit facilities agreement from its bankers in return for a 5% stake in the company. HMV’s strategy for turning the business around includes an increased focus on products such as headphones, speaker docks, tablet devices and MP3 accessories in its stores. The company’s directors also hope to turn HMV into a broad-based ‘entertainment brand’, developing the synergies available between its live music, ticketing and digital assets, and its existing retail platform and customer base.
Tata Steel is to close or mothball parts of its Scunthorpe plant with the loss of up to 1,200 jobs at Scunthorpe and 300 jobs at its Teesside sites. The company says the decision is due to the weakness of market conditions and the likelihood of increased European Union carbon taxes in the near future. Demand for structural steel in the UK is only two-thirds of the 2007 level and is not expected to fully recover within the next five years. Tata plans to restructure this part of its business, investing £400m over a five-year period, targeting high-value markets and introducing greater flexibility into its costs and operations.
