Today’s news in brief-14/12/23
Farfetch is reportedly in talks with Apollo Global Management to secure emergency funding as it faces financial challenges. Farfetch, once valued at $23bn (£18bn) in 2018, now has a market value of $221m (£175m). While discussions with Apollo are ongoing, it is uncertain whether the funding will be provided as debt, equity, or both. The news follows reports of Farfetch founder Jose Neves considering taking the company private. The company is also exploring the sale of fashion retailer Browns and seeking additional funding from existing stakeholder Richemont, which has shown no interest in further investment.
Leading trade bodies, including the British Retail Consortium (BRC), the National Farmers Union (NFU), and UKHospitality (UKH), alongside major UK supermarkets, have issued a plea for urgent reform to the Apprenticeship Levy. In a letter to the government, they highlight the critical and persistent labour shortages in the food supply chains, impacting various sectors such as farming, handling, packaging, retail, and hospitality. The current Apprenticeship Levy system is deemed too inflexible, costing the UK numerous training opportunities and potential investments. The call is for a broader Skills Levy that allows businesses to use funds for a wider range of accredited courses, addressing vital skills gaps and supporting the domestic workforce.
Despite anticipating a slight dip in full-year revenues from £143.3m to £136.6m, MusicMagpie experienced a record-breaking Black Friday, contributing to a robust second half performance. The retailer focused on margin expansion, resulting in a gross margin increase to 27.7%. Consumer technology revenues for the second half increased by 7.5%, reaching £95.4m. The EBITDA is expected to rise by 15.4% to £7.5m due to improved gross margins and stringent cost control. Net debt as of November 30 stood at £13.1m, slightly below May 2023 figures. The company remains confident in its strategy and medium-term prospects despite ongoing challenges in the consumer environment and inflationary pressures.
Currys, despite reporting a pre-tax loss of £16m in its half-year results, is maintaining its full-year guidance. The profit decline was expected as the company focused on improving gross margins, and cost savings of £53m were offset by inflationary pressures and non-repeat of £11m in mobile revaluation. Group like-for-like revenues dropped by 4%, with UK and Ireland revenues falling by 3%. The adjusted EBIT was £15m, down 40% year-on-year. The company’s priorities include revitalising the Nordics, sustaining UK&I momentum, strengthening the balance sheet, and enhancing liquidity. The planned sale of Kotsovolos is expected to further bolster the company’s financial position.
