Fashion victim
Cloth cut
British fashion retailer Austin Reed is the latest high-street name to become the victim of patchy consumer demand. The company, founded in 1900 and best known for its menswear, will close this month and see roughly 1,000 jobs lost across its 120-store estate. Administrators AlixPartners said "no viable offers were received" for the retailer since it fell into administration in April, with the exception of a handful of concession stores operating within Boundary Mills outlets. It also sold the Austin Reed and Country Casuals brands to Border IP.
Spending USA-OK
Upside surprise
Low fuel prices and interest rates, combined with steady wage growth, have led to a 1 per cent increase in consumer spending in April compared with the prior month. The reading beat expectations of a 0.7 per cent rise and was the biggest monthly gain since August 2009 when spending rose 1.3 per cent. This will provide yet more ballast for the argument that the US economy is on a sure footing and could strengthen the case for another interest rate rise by US Federal Reserve policymakers. Furthermore, home prices rose 0.9 per cent in March compared with February's 0.3 per cent gain.
Surprise Alliance
Mega merger
One of the UK's oldest and largest investment trusts, Alliance Trust, confirmed this week that it had received an offer from rival RIT Capital Partners, the 55-year-old trust chaired by Lord Rothschild. If a merger goes ahead, it would create a roughly £5bn-sized investment trust, which would be by far the UK's largest. This move comes after Alliance's showdown with activist investor Elliott Advisors last year over the appointment of extra non-executive directors to the trust's board, which ultimately led to chief executive Katherine Garrett-Cox being ousted. See page 42 for more.
Bar chat
Debate brewing
There's always that person in the pub who knows it all and has the correct - in their mind anyway - view about any given topic. This pastiche extended to its nth degree this week after JD Wetherspoon founder Tim Martin had 200,000 beer mats printed calling for the UK to leave the EU and taking a targeted pop at International Monetary Fund chief Christine Lagarde with questions such as 'Is the governance of the IMF better than Fifa's?' and 'Did anyone elect you?'. Mr Martin, a well-known Brexit advocate, said the beer mats would be in its 920 sites until the 23 June referendum.
Shelf life
Tough cookies
Life for the UK's largest grocers isn't getting any easier as the squeeze on prices continues, but data from industry monitor Kantar Worldpanel suggests at least customer numbers are stable. Combined shopper numbers for Tesco, Asda, Morrisons and Sainsbury's were down just 0.2 per cent year on year in the 12 weeks to 22 May, suggesting shoppers still visit one of the big four even if they also use discounters Aldi and Lidl or other growing brands such as Waitrose, the Co-operative or Iceland. British Retail Consortium figures confirmed the slump in shop prices identified by Kantar.
Sentiment cooling
Focus on stocks
The world's largest asset manager BlackRock has moved US and European stocks from buy to neutral as part of a broader cooling in sentiment towards global stocks. Chief investment strategist Richard Turnill said equities had fallen back from their "sweet spot" in February and no longer look cheap. He said the MSCI World index is up 14 per cent from its mid-February low, but short-term risks such as a US rate rise are potential speed bumps. The call could be a prescient one given the OECD slashed its 2016 GDP growth forecasts for the US, UK and Japan this week.
Blocked drain
Wolseley restructure
Building materials supplier Wolseley, which owns outlets such as The Plumb Centre, saw its shares drop 6 per cent on 1 June after it warned like-for-like revenue growth had slowed since the end of its third quarter and that it would need to step up its European restructure. This will involve upping investment in the UK and Europe from £15m to £20m. The company has faced patchy conditions in the UK, where demand for repair and maintenance products was weak and contributed to a 0.4 per cent drop in like-for-like sales in its Q3. This was better than Q1's 1 per cent and Q2's 2.9 per cent drops.
Landmark fixtures such as the Champions League final can be hugely lucrative for broadcasters. But when Real Madrid and Atletico Madrid clashed on 28 May, BT (BT.A) showed it for free on YouTube. The telecoms titan splurged £897m for three years of exclusive live broadcasting rights to the Champions League and Europa League. At £299m a season, that’s more than double the amount paid by previous owners Sky (SKY) and ITV (ITV). Our chart shows the sharp rise in BT’s programming rights expenses since the launch of its BT Sport television channel in the summer of 2013. Given BT has invested so much, it may seem odd for it to broadcast one of its biggest fixtures for free. But a potentially huge audience should attract the highest-paying sponsors and advertisers and raise awareness of BT’s coverage, attracting subscribers to its various services.
