The Sunday Papers
Private equity in Peacocks rescue bid, Tesco brand slumps in key business poll, Decathlon in race for Best Buy, Carrefour shows Tesco what a real retail crash looks like, Fitness First to cut debt, Morrisons and rivals in £1.5bn bid for Iceland, Mitchells & Butlers faces another bar brawl, High Street carnage fear over rates rise
Private equity firms KKR, Permira and Sun European Partners are all separately poised to bid for Peacocksafter Sun European secured a £10m deal to buy the retailer’s Bonmarche arm in a pre-pack administration. Edinburgh Woollen Mill, the Scottish clothing group owned by Philip Day, is understood to lead the list of trade buyers interested in buying some of the Peacocks business.
Tesco has slumped in a poll of business leaders asked to name the companies with the most powerful brand image and innovative approach to the future. In another blow to the supermarket chain, the annual Thought Leadership Index places Tesco 24th, the first time the supermarket has fallen out of the top 20. The annual Populus poll of 1,000 executives, politicians and media figures is keenly watched for evidence of companies that have caught the public mood or are highly rated by senior business figures. In 2007, Tesco was placed third, behind Google and Apple.Decathlon, the world’s biggest sportswear retailer, has entered the fray in the battle for some of the Best Buy stores as it attempts to open 100 shops in Britain. The company, which has just 12 UK shops, wants to expand after the collapse of Blacks Leisure and difficult trading for JJB. Its plans also include tie-ups with local authorities to open “sports villages”. The family-owned French company is understood to be in negotiations over several of the 11 Best Buy shops, though not all of them.
Observer on Sunday
When Tesco unveiled grim Christmas sales figures and its first profit warning in decades on 12 January there was a very sharp intake of breath among investors who had come to rely on the world’s third-biggest retailer as a reliable profits machine. But Tesco’s problems are as nothing compared with the carnage at Carrefour, the world’s second-biggest retailer with 9,500 stores in 32 countries. It has issued a shocking six profits warnings in the past year and last week admitted that its annual results would be at the very bottom of the 15%-20% profit decline analysts had pencilled in. Its shares have tumbled from some €36 to €17 in the past 18 months.
The world’s biggest gym chain has been forced to restructure its £550m debt months after shelving plans for a float. Dorset-based Fitness First, which runs 440 clubs in more than 15 countries, is expected to breach the terms of existing loans this year. It will meet lenders ahead of a key financial healthcheck within the next couple of months.
Morrisons and private equity firms are among the groups that are this weekend considering making a bid of as much as £1.5bn for Iceland Foods, the up-for-sale frozen food specialist. Five parties, including Bain Capital and BC Partners, were active last week in the “data room” examining the books on Iceland ahead of the deadline for second-round bids on January 31. Morrisons remains an active participant in the process, but it is unclear if it will make a second-round bid for Iceland, which has about 750 stores.
All of the directors at Mitchells & Butlers are up for re-election at the pub group’s AGM this week. Although they are expected to be retain their positions, the directors might still face difficult questions over the group’s future.
Mail on Sunday
Desperate retailers are demanding an urgent review ofbusiness rates amid fears that a forthcoming rise will force the closure of many stores that are already struggling to survive. Business rates are due to leap by 5.6 per cent in April and if the rise goes ahead there are dire predictions that more household names will vanish from the already battered High Street. Peacocks, La Senza and Barratts are among the familiar retailers that have been placed in administration over the past month. Business rates are a source of deep resentment among retailers. In recent years, landlords have started negotiating on rent, but rises in rates have been relentless.