Today’s news in brief-10/5/24
The UK economy has emerged from recession with a growth of 0.6% in the first quarter of 2024, surpassing economist expectations. This growth was primarily driven by consumer-facing services, which expanded by 0.6% after a decline in the previous quarter. Notably, retail trade played a significant role in this recovery, with retail sales volumes increasing by 1.9% compared to the previous quarter. The Office for National Statistics (ONS) reported that services grew by 0.7%, while the production sector expanded by 0.8%. However, the construction sector experienced a decline of 0.9%.
Mike Ashley’s Frasers Group has raised its stake in Boohoo to 23.1%, aligning with its strategy of investing in promising UK fashion retailers. Frasers originally acquired a 5% stake in Boohoo in June 2023 and has since increased its holdings. The move follows reports that Frasers Group is also poised to become Ted Baker’s new partner after the collapse of its existing licensing partner. Frasers is actively expanding its investment portfolio in the retail sector, recently reaching agreements with Matches Fashion to acquire intellectual property.
The John Lewis Partnership reduced its workforce by 3,800 roles over the past year, citing cost-saving measures. The company’s employee count dropped to 70,500 from 74,300 the previous year, primarily due to attrition rather than direct redundancies. The majority of reductions occurred in Waitrose supermarkets, where staff numbers fell to 49,600 from 52,700. Management is reportedly considering further cuts, potentially leading to up to 11,000 redundancies.
Shoplifting cases in the UK have decreased by 2% from record highs, despite reports of a significant rise in theft and abuse incidents. A recent ONS survey revealed that 26% of retailers experienced customer theft in 2023, down from 28% in 2022. However, shoplifting remains a substantial concern for retailers, costing an estimated £1.2bn annually in anti-crime measures. Dissatisfaction with police responses to retail crime remains prevalent, with many businesses feeling that law enforcement is not adequately addressing the issue.
WHSmith has announced plans to open 17 new Toys R Us shops within its stores across the UK. This expansion follows the successful launch of nine Toys R Us concessions last year. By the end of August, WHSmith aims to have 30 Toys R Us shop-in-shops, adding to its diverse product offerings and reinforcing its position as a key retail hub on the high street.
Mothercare is exploring refinancing options after experiencing a 13% decline in sales, primarily attributed to global economic uncertainties and inventory clearance due to suppressed demand during the pandemic. Despite challenges in its Middle East markets, UK sales have shown improvement year-on-year. The company is in discussions to renegotiate its debt facility and reduce financing costs to ensure continued operational flexibility and financial stability.
