Chanel Chooses London for Global Office

Chanel Chooses London for Global Office
The luxury goods maker Chanel has told the BBC it’s elected to set up its global office in the UK. For the first time in its 110-year history, the brand is gathering the majority of its global business functions under one roof.

Chanel, renowned for its tweed suits, handbags and perfume, had global sales of over £7bn last year, and employs more than 20,000 people. It has over 30 million social media followers on Instagram.

Chanel Chooses London for Global Office

Chanel told BBC Radio 4’s Today programme that it “wanted to simplify the structure of the business and London is the most appropriate place to do that for an international company. London is the most central location for our markets, uses the English language and has strong corporate governance standards with its regulatory and legal requirements”.

The decision – which is understood to involve dozens of jobs – means that Chanel has picked London as the base for its global team over other locations such as New York, or even its creative hub of Paris.

Chanel, whose Little Black Dress has come to epitomise the label’s Parisian heritage, is retaining its head designer Karl Lagerfeld and his team in the French capital.

Justine Picardie, editor-in-chief of Harpers’ Bazaar and Coco Chanel’s biographer, hailed the move as a mark of the global powerhouse’s confidence in the UK’s long-term prospects.

She pointed out that it also moves Chanel closer to one of its fastest growing customer bases with “spending on luxury goods by affluent London households being only second to Hong Kong, in terms of growth”. She added: “Chanel leads the way. My strong intuition is that other (luxury brands) will follow.”

The reasons Chanel gives for its decision echoes those cited by the likes of banks and manufacturers who’ve opted to move operations to the UK over the years.

The news comes as many businesses voice concerns about the continued uncertainty over Brexit and future trading arrangements, and the impact that may have on investment and jobs.

Chanel’s decision will be welcome news to British designers as London Fashion Week gets underway. They’re potentially facing upheaval to their supply chains in the form of tariffs, delays at the border and exchange rate volatility in the event of a no-deal Brexit.

Such concerns could, according to Paul Alger, of the Fabrics and Textiles Association, make buyers at catwalk shows hesitate to place orders, which would be due for delivery next spring.

The fashion industry contributed over £32bn to the UK industry in 2017, according to the British Fashion Council. That’s an increase of 5.4% on 2016, making it one of the fastest growing sectors of the economy.

 

Tax Cut for Self Employed Workers Scrapped

Tax Cut for Self Employed Workers Scrapped
A planned tax cut for 2.7m self-employed workers has been scrapped by the UK government. It was originally due to scrap Class 2 National Insurance contributions in April but the move had been delayed by a year and has now been shelved. It cited concerns that low-earning self-employed people would pay more to access the state pension, and it would make the tax system more complex.

Labour’s John McDonnell called it a “betrayal of the self-employed”.

The government was originally due to scrap Class 2 NI contributions, paid by self-employed people with profits of £6,205 or more a year, in April 2018 but last year announced it was delaying that for a year.

But it announced on Thursday that they would not now be abolished in this Parliament. The move was set to save millions of workers about £150 a year.

But there had been concerns that the move would hit more than 300,000 self-employed people earning less than £6,000 a year who were paying the Class 2 NICs voluntarily, in order to access the state pension. They would have faced being moved to Class 3 contributions, raising weekly payments from £2.95 to £14.65.

In a written statement, Treasury Minister Robert Jenrick said the change had been intended to simplify the tax system for the self-employed but it had “become clear” that a “significant number” of self-employed people with the lowest profits would have ended up paying more.

“Having listened to those likely to be affected by this change, we have concluded that it would not be right to proceed during this Parliament, given the negative impacts it could have on some of the lowest earning in our society,” it said.

Trying to address the concerns would have meant “greater complexity to the tax system, undermining the original objective of the policy”. He added: “The government remains committed to simplifying the tax system for the self-employed and will keep this issue under review in the context of the wider tax system and the sustainability of the public finances.”

But shadow chancellor Mr McDonnell said: “This is yet another betrayal of the self-employed. These people are the engine of the economy and have been let down again, while giant corporations have seen their tax bills slashed.”

The Federation of Small Businesses said it would hit more than three million people and would “net the Treasury more than £350m annually in the three years to 2021”.

FSB Chairman Mike Cherry said the Treasury “should have worked harder” to find ways to protect low-earners.

“The self-employed community has been let down today, missing out on a promise to reduce their tax burden. This raises serious questions once again about the government’s commitment to supporting the self-employed. ” He added: “Class 2 NICs is a regressive levy that indiscriminately hits sole traders and makes life even tougher for those who are hard-up.”

Google & Mastercard in Credit Card Data Deal

Google & Mastercard in Credit Card Data Deal
Google has reportedly bought Mastercard credit card data in the US to help it track users’ offline spending in stores. The two firms had not made the deal public but it was discovered by Bloomberg.

Mastercard denied suggestions that its data could be used to identify exact purchases.

The Open Rights Group told the BBC the confidential nature of the deal raised privacy issues.

“This raises serious concerns regarding the use of private financial data,” said legal director Myles Jackman. “Will Mastercard be compensating their clients for the data they have given away to Google for their own financial gain?”

Google says all the data is anonymised and that users can opt out of ad tracking by switching off the web and app activity control.

It is testing a service for ad buyers in the US that shows how digital ads influence in-store spending.

On its website, the firm claims that advertisers who qualify to use its “store sales management” service can see whether an ad click or video view results in an in-store purchase within 30 days.

Google said the service was a test product in the US and only available to certain ad buyers. It launched the ad tool in 2017.

“Before we launched this beta product last year, we built a new, double-blind encryption technology that prevents both Google and our partners from viewing our respective users’ personally identifiable information,” the firm said in a statement.

“We do not have access to any personal information from our partners’ credit and debit cards, nor do we share any personal information with our partners.

Mastercard told the BBC it offers its own “media measurement services” to retailers, in which the merchant provides advertising campaign details and it supplies spending data for the duration of the campaign.

“We only provide merchants and their designated service providers trends based on aggregated and anonymised data, such as the merchant’s average ticket size and sales volumes,” said a spokesman. “We do not provide insights that track, serve up ads to, or even measure ad effectiveness relating to, individual consumers.”

Funding Circle to Raise £300m with Listing

Funding Circle to Raise £300m with Listing
Funding Circle, the peer-to-peer lender, plans to raise £300 million by listing on the stock market in London. The firm offers loans to small businesses in the US, Germany and the Netherlands as well as the UK and the funds will be used to expand in new markets.

Funding CircleFunding Circle said the listing would help “engender trust” with investors, borrowers and regulators.

The venture was founded in London in August 2010.

Under its business model, small firms can apply to borrow money from a pool of funds supplied by individuals or firms. The arrangement cuts out banks, hence the term peer-to-peer.

It is the first such lender to float on the London stock market and could be valued at up to £2bn.

Since 2010 Funding Circle has lent more than £5bn in loans to 50,000 small businesses from 80,000 investors – including some £1bn in the first half of this year. Revenue jumped to £63m in the first half of 2018, up from £41m in the same period last year.

Loans under management as at the end of June were more than £2.5bn.

Samir Desai, chief executive and co-founder of Funding Circle, told the BBC it was a “very simple business. We allow anyone to lend money directly to small businesses, cutting out the banks. We are not a savings product.”

Merrill Lynch, Goldman Sachs and Morgan Stanley are acting as advisers for the IPO.

As part of the share sale, Danish billionaire Anders Povlsen will take a 10% stake in the firm. His holding company, Heartland, is a major investor in online fashion retailers Asos and Zalando.

 

Workers in Open Plan Offices are ‘More Active’

Workers in Open Plan Offices are ‘More Active’
Workers in open-plan offices are more active and less stressed than those with desks in cubicles or private offices, research suggests. This could be because they make the effort to find privacy to talk away from their desk, the researchers said.

The US study used chest sensors to track movement and heart rate in hundreds of people in different buildings over three days. The potential health benefits should not be ignored, they said. But they said the study was observational only and factors like location of stairs and lifts could be at play too.

The University of Arizona study, published in Occupational & Environmental Medicine, claims to be the first to measure activity and stress in office workers, rather than asking them in a survey.

It said office workers tended to be a sedentary group compared to other workers, making them more likely to have health issues, including heart problems, tiredness and low mood.

Being less active during working hours has also been linked to greater feelings of stress.

In the study of 231 office workers in government buildings in the US, those in open-plan offices – with no partitions between desks – clocked up 32% more physical activity than workers in private offices and 20% more than those in cubicles. And those who were more active had 14% lower levels of stress outside the office compared to those who were less active.

Participants in the study also answered questions about their current mood every hour on their smartphones during work time. Older office workers were more likely to have higher stress levels. The most stressed people at work were also those who were highly stressed at home too. On the whole, men were more active than women.

Esther Sternberg, study author and professor at University of Arizona College of Medicine, said: “We all know we should be increasing our activity but no matter how we try to encourage people to engage in healthy behaviour, it doesn’t work for long. “So changing office design to encourage healthy behaviour is a passive way of getting people to be more active.”

Although people tend to like individual offices or cubicles more because they are more private, the researchers found open plan offices could have other benefits, such as better communication, more impromptu conversations and increased awareness of colleagues.

The researchers said other design features could also affect activity levels – such as how people circulate in their offices, where meeting spaces are located and how accessible stairs and lifts are.

Is it the End of the 9 to 5 Working Day?

Is it the End of the 9 to 5 Working Day?
Traditional workplace hours of 9am to 5pm are now only the norm for a minority of workers, research suggests. Just 6% of people in the UK now work such hours, a YouGov survey found. Almost half of people worked flexibly with arrangements such as job sharing or compressed hours, allowing them to juggle other commitments, it found.

Anna Whitehouse, a campaigner whose own flexible working request was refused by her employer, said there were still misconceptions about such arrangements.

In her case, her employer refused her request for 15 minutes flexibility at the start and end of each day to enable her to drop off and pick up her children from nursery.

Mrs Whitehouse, an author and blogger known as Mrs Pukka, said the refusal prompted her to resign and blog about the experience. “My background is as a journalist so I just started writing. I’m not a campaigner or an activist, but I had a moment of frustration and went with it.”

Since then she has started the Flex Appeal, aimed at convincing firms to trial flexible working and also to make people aware of their right to request flexible working. “It’s not about parents, it’s about people. There’s so much research out there showing working flexibly is better for mental health and for productivity,” she said.

Polling firm YouGov surveyed over 4,000 adults for the survey, which was sponsored by fast-food chain McDonald’s.

The study found most full-time workers would like to start work at 8am and finish by 4pm, hours chosen by 37% of those surveyed. The second most popular choice was 7am to 3pm, chosen by 21% of those surveyed.

It found flexibility was important to people of all ages and life stages, including parents and students, for example. Those who did work flexibly said it improved their motivation and encouraged them to stay in a job for longer.

Peter Cheese, chief executive of HR industry body the CIPD, said organisations willing to offer flexible working would attract a higher number of applicants. But he said more firms needed to step up: “Uptake of flexible working is still low and most jobs are not advertised as being open to different working arrangements,” he said.

 

World Cup Fails to Lift UK Retail Sales

World Cup Fails to Lift UK Retail Sales
The hunger for barbeques and World Cup-fever failed to lift retail sales in June as shoppers stayed away from the High Street. The Office for National Statistics said sales fell 0.5% between May and June, below expectations of a 0.2% rise.

The pound fell against the dollar in response, dipping below $1.30.

ONS senior statistician Rhian Murphy said: “Consumers stayed away from stores and instead enjoyed the World Cup and the heatwave.”

Keith Richardson, managing director retail sector at Lloyds Bank Commercial Banking, said: “While the World Cup definitely got shoppers spending, these figures don’t cover the sudden rush of optimism that came with England’s progress beyond the initial group stage.”

“What they do show is how challenging the retail sector is at the moment. Even the longest heatwave that many shoppers can remember hasn’t been enough to persuade consumers to really open their wallets.”

In the year to June, retail sales rose by 2.9%, although that was a slowdown from the 4.1% annual increase recorded in May. However, in the April-to-June quarter retail sales increased by 2.1% – the biggest quarterly rise in 14 years.

Sports Direct Profits Fall

Sports Direct Profits Fall
Sports Direct has reported a sharp drop in annual profits, in part due to its exposure to struggling department store chain Debenhams. Pre-tax profits fell to £77.5m in the year to 29 April, down from £281.6m the year before. The drop was partly due to a £85.4m hit the retailer took on the value of its near-30% stake in Debenhams.

Sports Direct – which is run by founder Mike Ashley – said its UK sales were down 2% over the year to £2.2bn. However, total group revenues rose 3.5% to £3.4bn helped by an increase in sales from outside Europe.

Shares in the retailer fell by 11% at one point, before recovering slightly to stand 7% lower.

Sports Direct – which was founded by chief executive Mike Ashley – began building up its stake in Debenhams in 2017. It currently holds a 29.7% stake in the department store chain – just short of the 30% threshold that would force it to make a takeover bid.

However, Debenhams is struggling, and has issued three profit warnings so far this year. The chain is undergoing a turnaround plan designed to cut costs and boost sales, but its chief executive Sergio Bucher has said the UK retail sector is facing “exceptionally difficult times”.

In addition to its stake in Debenhams, Sports Direct also owns an 11% stake in House of Fraser, which recently announced a major restructuring.

Speaking to the BBC’s Today programme, Sports Direct’s head of strategic investments, Liam Rowley, said “We hope House of Fraser will come out stronger from the restructure.” Mr Rowley also told the programme that “retailers need to work together”, otherwise “Amazon’s going to eat your lunch”.

As well as the impact of the Debenhams stake, the sharp fall in Sports Direct’s profits was also partly due to the previous year’s figure being boosted by income from the sale of the Dunlop brand.

Stripping out these factors, underlying pre-tax profits rose to £152.9m from £113.7m the year before.

 

Businesses & Unions Call for Urgency over Brexit

Businesses & Unions Call for Urgency over Brexit
Business and union leaders from across the UK and Europe have joined together to plead for “pace and urgency” in Brexit negotiations. The CBI and the TUC along with their European counterparts are calling on the UK government and the European Union to make “measureable progress”.

UK and EU leaders will attend a European Council meeting this week.

The groups say the UK and the EU must “put economic interests and people’s jobs, rights and livelihoods first”.

The CBI, BusinessEurope, the TUC and the European Trade Union Confederation (ETUC) collectively represent 45 million workers and 20 million employers across the EU.

In a joint statement, they said: “We are calling on the UK government and the EU to inject pace and urgency in the negotiations, bringing about measurable progress, in particular a backstop arrangement to avoid a hard border in Ireland.

“Decisions will be needed in June and October to finalise the withdrawal agreement and the transitional arrangement, and put economic interests and people’s jobs, rights and livelihoods first.”

UK Prime Minister Theresa May will attend the European Council meeting on 28-29 June. However, she will be excluded from a gathering of the other 27 EU nations where chief negotiator Michel Barnier will provide on update on Brexit talks.

Carolyn Fairbairn and Markus Beyrer, the director-generals of the CBI and BusinessEurope respectively, as well as Luca Visentini and Frances O’Grady, the general secretaries of the ETUC and the TUC, met earlier this month in London to discuss Brexit.

Ahead of the European Council meeting they said: “The UK government and the EU will need to agree on all aspects of regulatory alignment, which is of the utmost importance, without jeopardising the integrity of the single market.”

A spokesman for the UK government said: “We absolutely agree. That’s why we have put forward workable proposals to the EU on a range of areas from the backstop to security, and the White Paper – which will be published after June Council – will continue to drive this process forward.

“We are confident that we can make progress if both the EU and UK engage constructively.”

 

New Look Cuts Prices Amid Fall in Annual Sales

New Look Cuts Prices Amid Fall in Annual Sales
Fashion chain New Look is continuing to cut prices as it tries to turn around its business. New Look wants 80% of its clothes to sell for less than £20. The price cuts come amid falling sales. Like-for-like sales plunged by 11.7% in the financial year which ended in March, and website sales tumbled 19%.

New Look is one of many retailers this year that struck a Company Voluntary Agreement (CVA) under which a company buys time to sort out its debts. It is trying to broaden its appeal to include older customers, giving it an age target range of between 18 and 45.