Today’s news in brief-21/09/23
Wilko’s administrators PwC are reportedly set to begin a review of dividend payouts totalling £77m to investors over the past decade. The review will focus on payouts to the Wilkinson family and other investors leading up to the retailer’s decline. Notably, despite posting losses of £39m, Wilko paid out a dividend of £3m last year. In 2018, the company paid out a £3.2m dividend, even in the face of a £65m loss. The family is under pressure to address a £56 million deficit in the company’s pension fund.
DFS Group reported a sharp decline in profits, falling by 49.2% to £29.7m from the previous year’s £58.5m in its latest accounts. The company attributed this downturn to a challenging market environment. Despite the drop in profits, DFS achieved a noteworthy 38% market share, a new high for the group. Revenues from ongoing operations also saw a decrease of 5.3%, totaling £1.09bn. Nevertheless, this figure was still 13.8% ahead of the pre-pandemic FY19 period. DFS anticipates gains in market share and enhanced margins, although the timing of market recovery remains uncertain.
Retail giant Next revised its full-year guidance upwards following a robust performance in the first half of the year. Total sales surged by 5.4%, reaching £2.6bn, while profit before tax saw a significant uptick, growing by 4.8% to £420m. Operating profit also increased by 5.1% to £456m As a result, Next increased its full-year pre-tax profits guidance from £845m to £875m. The company foresees a slight dip of 1.7% in retail full-price sales for the remainder of the year until January 2024, and plans to renew 73 leases while closing 11 mainline stores.
Tesco’s chief customer officer, Alessandra Bellini, will step down from her role at the end of September. Bellini joined Tesco in March 2017 and played a pivotal role in transforming the group’s customer function, earning recognition as a leader in the global FMCG sector. Under her leadership, Tesco introduced initiatives like “Food Love Stories” and “Aldi Price Match”, contributing to the brand’s turnaround. Ashwin Prasad will succeed Bellini as chief commercial officer.
JD Sports, a leading sports retailer, posted impressive results for the first half of the year. Revenues surged by 8% to £4.7bn, showcasing the brand’s resilience in a challenging economic climate. The company’s gross margins remained robust at 48%, surpassing pre-pandemic levels due to a more normalised promotional environment in the first half. JD Sports also reported a profit before tax and adjusted items of £373.5m, reflecting a more stable H1. The company is on track to expand its global presence, with plans to add over 200 new stores by January 2024.
Secret Sales, a prominent online discount retailer, has acquired Dreivip.com, a leading Spanish discount retailer, in a strategic move to strengthen its European presence. This acquisition follows Secret Sales’ success in securing $10m in Series B funding earlier in the year. The co-branded site is set to launch in October, featuring around 450 brands. This acquisition positions Secret Sales for over 150% year-on-year growth across Europe for the full year of 2023, with inventory value connected to the platform expected to exceed £3bn following the launch.
