Today’s news in brief-14/11/24
The Range and Wilko owner, CDS Superstores, has acquired 70 Homebase stores after the DIY retailer entered administration. This move, intended to save about 1,600 jobs, will allow Homebase stores to continue operating under CDS while administrators from Teneo Financial Advisory manage the transition. Homebase’s decline, attributed to low consumer confidence and high inflation, impacted 3,600 employees, though administrators pledged that wages and benefits will be paid throughout the process. Efforts to save the business included store sales to Sainsbury’s and ongoing talks for other potential buyouts, highlighting the strain facing home improvement retailers.
Boohoo has raised £39m through a shareholder-backed fundraiser after reporting a steep increase in half-year losses, which tripled to £27.4m compared to last year. CEO Dan Finley, asserting that Boohoo is “significantly undervalued,” initiated a strategic review focusing on profitability, including the closure of the company’s U.S. distribution centre. Finley expressed optimism about Boohoo’s potential, with growth observed in its Debenhams Marketplace, although challenges persisted in its Youth Brands segment, which saw a 15.9% sales decline. Boohoo’s tension with majority shareholder Frasers Group over governance matters also continued, with Boohoo openly criticising Frasers’ request for stronger involvement in strategic decisions, citing concerns over “commercial self-interest.”
Burberry is also grappling with a downturn, unveiling a new turnaround plan after reporting an adjusted operating loss of £41m for the six months ending in September, a sharp fall from a £223m profit in the prior year. Burberry’s sales dropped 20%, largely due to price increases and weaker demand in leather goods. CEO Joshua Schulman announced a £40m cost-saving initiative and suspended the 2025 dividend, aiming to refocus on Burberry’s core strengths, such as outerwear and scarves.
WHSmith reported a 16% rise in annual profits to £166m driven by strong performance in its travel segment. Group revenue increased 7% to £1.9bn, with travel revenue up 11%, supported by expansion in airports, hospitals, and rail stations. The travel segment’s success bolstered profitability, offsetting a 9% decline in high-street profits. WHSmith also opened 30 Toys “R” Us “shop-in-shops” in the latter half of the year, with more planned ahead of the holiday season. CEO Carl Cowling noted that the new one-stop-shop format is a strong contributor to growth, positioning WHSmith favourably for further expansion and profitability despite economic uncertainties.
