Retail news round-up on July 7, 2014: Mothercare faces increased takeover bid, Burberry attempts to clarify boss Christopher Bailey’s payout and The Body Shop full-year sales and profits jump

Mothercare faces fresh takeover bid from Destination Maternity

Baby products retailer Mothercare is facing a fresh acquisition bid from US rival Destination Maternity after rejecting two of its earlier attempts, the Telegraph reported. The company approached Mothercare twice in June with a £270m purchase offer, but board members said that it undervalued the business. Board members have been backed by Fidelity and Allianz, which own more than a fifth of Mothercare’s shares between them. Destination Maternity’s chief executive Ed Krell is reportedly flying into London this week for crunch talks with Mothercare’s major investors. It is understood that shareholders will not be easily convinced that a reasonable deal can be reached.

British consumer spending up 0.6% year-on-year in June

UK consumer spending increased at its fastest pace year-on-year in four years in the second quarter due to the FIFA World Cup 2014, according to Visa Europe. The Visa Europe UK Expenditure Index indicated that the spending rose for the ninth straight month in June, up 0.4% from May and 0.6% compared to June last year, Reuters reported. This came as football fans bought more food and drinks in supermarkets and pubs last month.

Burberry makes attempt to clarify boss Christopher Bailey’s payout

Fashion house Burberry has defended its move of awarding a £440,000 allowance to the newly appointed chief executive Christopher Bailey by issuing a supplementary note to shareholders, The Guardian reported. In Burberry’s ‘additional disclosure’ note, the group said the unusually high award was offered “as a means of providing [Bailey] with an increase to his fixed remuneration without increasing other elements of his remuneration”.

The luxury retailer braced itself for a protest vote from shareholders who are unhappy at pay arrangements for Bailey. As well as his cash allowance, investors are concerned about £22.5m of ‘golden handcuff’ and other share awards in the last year.

Body Shop pre-tax profits and sales boosted last year

L’Oreal-owned beauty chain The Body Shop’s pre-tax profits soared to £57m from £51.1m, while it lifted sales for the year to December 20, 2013, to £435.7m from £431.7m. The profit rise comes as the retailer rolled out its new ‘Pulse’ store format across its 292-strong high street network in the UK. It says it will continue to search out new products worldwide to sell in its stores.

Aldi and Lidl’s UK divisions could match Morrisons’ by 2015

Aldi and Lidl’s UK businesses are on track for combined sales of £10bn this year, and could generate almost as much turnover as Morrisons in 2015. Matthew Barnes and Roman Heini, joint managing directors of Aldi UK, told the FT that they expected the retailer to generate record sales £5bn in the year to December 31 2013, compared with £3.9bn in 2012. Ronny Gottschlich, managing director of Lidl UK, said he expected the chain to generate sales of about £4bn in the year to February 2015, compared with £3.3bn in the year earlier period. Jaime Vazquez, analyst at JPMorgan Cazenove forecast that the two chains’ combined sales could match Morrisons’ in 2015, which he expects to hit £13.5bn excluding fuel next year