Today’s news in brief-19/11/24
Morrisons has achieved a significant reduction in its debt, cutting it by £2.4bn as part of a major restructuring. Since the start of 2023, the supermarket’s debt has dropped from £6.2bn to £3.8bn, supported by a £370m ground rent deal with Song Capital. The restructuring extended Term Loan Facilities to November 2030 and revised its Revolving Credit Facility to August 2030. This financial stability comes alongside a 2.1% rise in quarterly sales to £3.9bn.
Asos CEO José Antonio Ramos Calamonte has faced scrutiny after receiving a 44% pay increase to £1.7m, despite the retailer’s losses widening to £379.3m for FY24. Sales declined 18% to £2.9bn. Critics, including the GMB Union, questioned the bonus amidst financial challenges. Calamonte defends the improvements in adjusted EBITDA and operational strategies, citing “green shoots of performance” as the company continues its turnaround plan. Asos maintained that its remuneration aligns with industry benchmarks.
Mulberry has reported widening losses of £15.3m and a 19% drop in sales to £6.1m in its half-year results, with UK sales falling by 14% and international sales by 7%. CEO Andrea Baldo, who recently took charge, emphasised the need for streamlining operations and restructuring to become a “leaner, more agile organisation.” Strategic adjustments in product, pricing, and distribution, coupled with cost-saving initiatives, aim to rebuild profitability despite a challenging retail environment.
Revolution Beauty defied a 20% decline in sales to £72.4m by posting an 18% rise in adjusted EBITDA to £3.9m for the first half of FY24. The improvement was driven by cost reductions and a simplified product portfolio. The company expanded its retail footprint, entering 250 new Boots stores and preparing to launch in 850 DM Germany locations. CEO Lauren Brindley highlighted the ongoing transformation, including global expansion plans, improved gross margins, and a return to growth expected in Q4.
Retailers, including Tesco, Sainsbury’s, and Amazon, have warned that National Insurance hikes and other cost increases could lead to inflation, job losses, and shop closures. A letter organised by the British Retail Consortium highlighted the sector’s £70bn cost burden, urging the government to reconsider. Tesco, for instance, expects its National Insurance bill to rise by £1bn. The Treasury defended the measures, citing the need to address a fiscal deficit and support public services, though retailers argued it risks undermining economic recovery.
Ikea announced plans to open a flagship store on Oxford Street in spring 2025 while launching a pop-up dedicated to its iconic FRAKTA bag on November 28. The new store will span three floors and offer over 6,000 products. Despite an 8.9% revenue decline to €26.5bn (£21.9bn) in FY24, Ikea reported a slight increase in operating profit to €2.3bn (£1.9bn), driven by a 10% average price reduction that boosted sales volumes in the second half of the year.
