Retail news round-up: Pensions Regulator rejects Green's proposal, increase in UK retail sales, M&S set to shut international stores and spending on Black Friday expected to rise 40%.
Sir Philip Green’s pension proposal rejected
The Pensions Regulator has refused Sir Philip Green’s offer of £350m to “sort” the BHS pension scheme, The Times reported.
The regulator said that the latest proposal for the pension scheme was “not robust enough to stand the test of time”.
A spokesperson for the Pensions Regulator said: “We will not accept bad deals that are not good enough for members and which could have a greater financial burden on the Pension Protection Fund (PPF).
“We have made our position clear but have yet to receive a sufficiently comprehensive and credible proposal.”
“We have a number of concerns about the latest proposal put to us, including how future risks to members, the PPF, and PPF levy payers would be addressed and a lack of clarity over ongoing governance and funding arrangements for the new scheme.”
Pension experts believe that regulator’s action was an attempt to secure more concessions from Sir Philip.
However, this could be high risk as Sir Philip’s proposal won the support of Chris Martin, chairman of the BHS pension trustees.
Pension experts warned that ex-employees will have to wait years for a pension scheme bailout.
UK retail sales rise for first time since January
The UK high street sales recorded year-on-year growth of 0.7% for October, which is the first sales growth since January, Bloomberg reported.
According to BDO, the sales growth was led by home furnishings with 11.6%. The sales of lifestyle goods such as electrical products and outdoor equipment increased 2.3% and web sales 19.5%.
Owing to unseasonable weather conditions, consumers have been spending on leisure activities rather than on a new wardrobe, leading to fall in fashion sales.
Head of retail at BDO, Sophie Michael, said: “Prices will inevitably rise next year in the context of the falling pound, but right now people are remarkably upbeat about their finances.”
“Retailers have a perfect window of opportunity to push full-price lines for the next few weeks and claw back their margins prior to Black Friday.”
M&S plans to shut international stores
Marks and Spencer is planning to close some of its shops around the globe as part of major cost-cutting drive, This Is Money reported.
Tuesday’s half-year results signalled the closure of poorly performing international division, having a network of 468 stores. China and France could be affected.
New chief executive Steve Rowe is under pressure to turn M&S around. He has already scrapped more than 500 head office jobs and reduced layers of senior management.
Analyst at broker Cantor Fitzgerald Europe, Freddie George, said: ‘I don’t think this withdrawal sends the right signals. They should take a long-term view on international expansion. I don’t necessarily think it’s the right thing to do, but I understand it.”
“It is obvious M&S is desperate to cut costs. It has laid off quite a lot of people at head office recently.
“There is a new management team and they are taking a fresh look at the business and are taking a more conservative approach.”
M&S said: “We decline to comment on rumour and speculation ahead of the half-year results.”
Black Friday spending expected to rise 40%
Spending on Black Friday is expected to rise 40% even though the event is known for history of queues, crushes and violence, the Daily Mail reported.
According to new research, spending might reach £2.9bn over the weekend of Black Friday through Cyber Monday.
Retail and consumer lead at PwC Madeleine Thomson, said: “Our research shows Black Friday and Cyber Monday are definitely here to stay, with sales over the weekend due to grow by a predicted 38% to £2.9bn.”
“Nearly a third of respondents expected goods to be cheaper than across pre-Christmas sales. The average expected spend is £203, nearly double that of 2015, and higher amongst men and younger consumers, with the majority of people expecting to spend the most on electrical and technology.”
However, an online survey by PwC found that 36% of adults are not interested in Black Friday or Cyber Monday.