Retail news round-up on October 1, 2014: eBay and PayPal to split next year; Forever 21 UK narrows full-year losses; Supermarket suppliers watchdog weighs into Tesco crisis.
eBay and PayPal to split next year
Online retail giant eBay is to spin off its PayPal payments business as a separate firm in 2015, The Independent reported. eBay’s board said that ‘creating two standalone businesses best positions eBay and PayPal in the rapidly changing global commerce and payments landscape, and is the best path for creating sustainable shareholder value.’ After the split, the retailer’s current chief executive John Donahoe will not be the top executive at either of the new companies, but said he expects to be on the board at one or both of them.
eBay said Donahoe and chief financial officer Bob Swan will be responsible for leading the separation of the businesses, but neither would have an executive management role in the new eBay and PayPal companies. Devin Wenig, currently president of eBay marketplaces, will become chief executive of the new eBay. After the split, the chief executive of PayPal will be Dan Schulman, who joins the company from American Express. Both the companies will continue to have ‘a big presence’ in Ireland after spin-off, a spokesman has confirmed.
Forever 21 UK narrows full-year losses
Fashion retailer Forever 21 UK reduced its full-year pre-tax loss to £18.4m from £66.5m recorded last year, The Telegraph reported. In the year to February 28, revenues rose to £48.3m from £37.1m.
Supermarket suppliers watchdog weighs into Tesco crisis
Government-appointed watchdog Groceries Code Adjudicator has weighed into the crisis engulfing Tesco, The Financial Times reported. Christine Tacon has asked the grocery retailer to notify her immediately if it finds anything in its investigation of a £250m profit overstatement that is in breach of the code that governs the way supermarkets deal with their suppliers.
She has also offered to meet Deloitte, which is leading an investigation into the overstatement, to explain to them the sorts of behaviours that could constitute a breach of the code. If Tacon finds any breaches of the code, she could launch an investigation into the grocery industry’s dealings with suppliers.