Today’s news in brief-21/11/24
Boohoo has appointed Tim Morris as its new independent Chair, effective immediately, marking another milestone in the company’s ongoing restructuring. Mahmud Kamani, the founder, transitions to the role of executive vice chair while waiving his salary for a year. This change aligns with Boohoo’s broader strategy to improve governance and shareholder value, following a recent £39.3m fundraising and the appointment of Dan Finley as CEO.
Frasers Group, led by Mike Ashley, has intensified its criticism of Boohoo’s leadership. In an open letter, Frasers demanded Kamani’s removal, citing poor performance, transparency issues, and supply chain allegations. It also pushed for Ashley’s appointment to the board, arguing his leadership could revitalise Boohoo. Frasers criticised Boohoo’s rejection of its proposal for Ashley as CEO, describing the internal promotion of Finley as a “desperate” move. Boohoo countered these claims, accusing Frasers of pursuing self-interest.
JD Sports has reported that full-year profits are expected at the lower end of its £955m to £1.035bn forecast due to October’s volatile trading conditions, especially in the UK and North America. Despite a robust back-to-school sales period and a global store count now exceeding 4,500 due to acquisitions, overall revenues dipped by 0.3% for the third quarter. CEO Régis Schultz cited volatility but remained optimistic about the peak trading season. JD Sports’ organic sales grew by 5.4% for the quarter, with footwear outperforming apparel, but its like-for-like growth remains modest at 0.5%.
Superdry has projected further sales declines as it restructures following its delisting from the London Stock Exchange. For the year ending April 2024, group revenue fell 22% to £488.6m, driven by a 36% drop in wholesale and a 16% decline in retail sales. The company cited strategic decisions, underperforming channels, and shrinking store and e-commerce revenues as key challenges. Despite this, Superdry achieved £40m in cost savings and improved its gross margin by 2.2 percentage points to 55%. The company aims to stabilise with revenues of £350m-£400m and a mid to high single-digit EBITDA margin, though it acknowledged the need for further operational efficiency.
Morrisons faces potential upheaval with plans to close its Rathbones bakery in West Yorkshire, putting 400 jobs at risk. Acquired in 2005, the site has reportedly struggled with profitability for years. A consultation process is underway to explore alternative solutions, though Morrisons stated its in-store bakeries would remain unaffected. The company, owned by Clayton, Dubilier & Rice, expressed its commitment to supporting impacted employees, including exploring redeployment opportunities within the group. The closure would mark another challenge for Morrisons as it navigates pressures in the competitive supermarket sector.
