Today’s news in brief-29/1/24
The UK experienced a significant increase in business administrations, with the retail sector being the hardest hit, accounting for 19% of the total administrations. This information comes from a study conducted by full-service law firm Shakespeare Martineau. The year saw a total of 1,641 businesses filing for administration, a 22% increase from 2022 and a substantial 91% rise from 2021. Sectors such as retail, construction, hospitality, manufacturing, and real estate collectively represented 59% of the administrations. Greater London led in regional filings with 22%, followed by the North West (14%) and the South East (12%).
THG (The Hut Group) announced plans to cut 160 jobs across its marketing, sales, and warehouse departments. The job cuts are part of a larger consultation process, including the ecommerce services platform, Ingenuity, and are expected to conclude in mid-March. Approximately 60 marketing and sales roles will be eliminated, along with 100 roles at THG’s Warrington warehouse, following automation. Despite the job cuts, THG reported its best quarter with a 1.1% sales increase to £597.9min Q4.
Superdry is exploring “cost-saving options” amid rumours of a potential company voluntary arrangement (CVA) or restructuring plan. The company confirmed its collaboration with advisors to explore material cost-saving options. Despite a half-year revenue fall of 23.5% to £219.8m and the closure of 12 stores, Superdry’s cost reduction agenda aims to deliver over £40m in savings for the current financial year.
EY resigned as the auditor of Asda following a reported romantic relationship between one of its senior partners and Asda’s billionaire CEO Mohsin Issa. EY informed Asda about the decision in June, attributing it to a restructuring of the Issa brothers’ businesses. Asda claimed to have notified lenders of its listed bonds about the resignation in August. The partner resigned from EY a day after the firm quit as Asda’s auditor, and EY clarified that the partner had never worked on Asda’s audit.
John Lewis Partnership is reportedly considering cutting up to 11,000 roles over the next five years as part of a turnaround plan. At least 10% of roles across the group’s head office, supermarkets, and department stores are under consideration. The potential job cuts come after the group reduced redundancy terms, offering one week of pay per year of service instead of two. The move is seen as a cost-neutral rebalancing, with savings on redundancy pay reinvested into partner pay.
Richard Walker, the managing director of Iceland and former Tory donor, publicly backed Keir Starmer to be the next prime minister. Walker cited Starmer’s understanding of the cost of living crisis and his compassion for the less fortunate. This comes as Labour aims to reassure business leaders that it won’t enact “anti-business policies” in the event of taking power in the next election. Prime Minister Rishi Sunak is expected to call an election no later than January 2025, with many speculating on a potential Autumn election this year.
