Retail news round-up on May 7, 2014: Carphone Warehouse and Dixons to merge, food inflation slows, River Island withdraws product and more.
Carphone Warehouse and Dixons close to agreeing £4bn merger
British high street retailers Carphone Warehouse and Dixons Retail are poised to agree a £3.7bn merger of equals in the coming days to create one of the UK’s biggest high street groups, Sky News understands. Sky News has learnt that the two companies will make a statement to outline concrete details of their tie-up before a Takeover Panel deadline on May 19. The terms of the nearly £4bn merger, which will see the creation of a new mobile phone and electrical goods retailer likely to be known as Dixons Carphone Group plc, have been broadly agreed in recent days, according to people close to the discussions. The final name has not yet been officially agreed by the two companies’ boards, they added.
The transaction will be structured as a 50-50 merger of equals, which will ignore the fact that Carphone’s market capitalisation has been marginally higher than that of Dixons. Carphone co-founder Sir Charles Dunstone is to be chairman of the combined group, with Dixons occupying the top two executive roles in the form of Sebastian James as chief executive, and Humphrey Singer as chief financial officer. Carphone’s chief executive Andrew Harrison will become deputy chief executive, while Carphone deputy chairman Roger Taylor and Dixons Retail chairman John Allan will be named deputy chairmen of the new company.
Springboard figures show footfall dropped last week
According to Springboard data exclusively shared with Drapers, footfall across all retail categories dropped year-on-year last week throughout the UK. In the week beginning April 28, shopping centres performed the worst, with 2.5% fall, while high streets also slumped 2.2%. Retail parks were the best performers, but even this category saw a decrease of 0.3%, leaving the Springboard Index down 1.9% overall. On a weekly basis, retail parks were the worst performer – down 2.8% – with all other categories up. High streets were the best performing category, up 9.6%.
Apple’s new retail chief Angela Ahrendts has been awarded the company’s shares worth $68m (£40m), a week after joining from luxury goods retailer Burberry, The Telegraph reported. Ahrendts has secured a maximum of 113,334 restricted share options, which will transfer to her in a series of payments starting over the next four years. She will receive around 85% of the shares based on how long she stays with Apple, regardless of performance.
Food inflation slows to 0.7% in April
According to British Retail Consortium and Nielsen figures, food inflation decelerated for the seventh straight month to 0.7% in April against the same month last year as shoppers gained from the burgeoning supermarket price war, The Times reported. Fresh food inflation decreased to 0.4% compared with the same month last year, the lowest level since June 2010, with fish and vegetables products putting downward pressure on prices. It compared with ambient food prices which increased by 1.1% in April year-on-year, pushed up by alcohol, sugar, jam and honey. Overall, shop prices dropped by 1.4% in April, extending the period of deflation for a twelfth consecutive month. Furniture and floor covering prices slumoed for the thirteenth consecutive month but that was the only category to experience acceleration in deflation.
River Island withdraws ‘anti nag gag’ from sale over sexism complaints
UK high street fashion brand River Island has removed an ‘anti nag gag’ novelty item from sale at its online store following Twitter backlash from hundreds of women. The item, a £4 miniature football on a string, was pictured stuck in a woman’s mouth alongside a male figure plugging his ears, exclaiming: ‘Will you put a sock in it!!!’. Over 200 tweets of complaint that the item was sexist were sent. The retailer told the Telegraph: “As soon as this product was brought to our attention we withdrew it from sale and removed it from our website.”