Your browser is no longer supported. For the best experience of this website, please upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

Weekend round-up

Drapers highlights all the news from the weekend’s papers, including articles on Sir Philip Green, Sports Direct and Sainsbury's.

The Sunday Telegraph
Asda is planning to report football shirt manufacturers to the Office of Fair Trading unless they agree to supply the retailer with shirts to sell through its stores, according to The Sunday Telegraph. The retailer wrote to football shirt makers last week demanding that they abandon their long-term policy of refusing to sell football shirts through supermarkets. Asda will take the case to the OFT if the manufacturers do not play ball.

Mike Ashley, the founder of Sports Direct, has been ordered to "get his house in order" by the company's new non-executive directors after last week's board shake-up. Chris Bulmer, a non-executive director, quit the company last week citing lack of corporate governance at the retailer, which floated in February. Bulmer was replaced by Malcolm Dalgleish, head of retail in Europe at property company CB Richard Ellis, and Dave Singleton, a former executive at sports brand Reebok. It is understood that Dalgleish and Singleton issued Ashley with an ultimatum, saying that they would only join if he sorted out the company's numerous corporate governance and personnel issues.

Britain's big four supermarkets face an unprecedented clampdown on their controversial land-holding practices and could have their relationships with suppliers regulated by an independent ombudsman for the first time. The proposals form part of the initial findings of an 18-month probe by the Competition Commission into the £120bn sector to be published this week. The Government's anti-trust watchdog will also propose a widespread shake-up of the planning system, which could make it easier for Tesco, Asda, Sainsbury's and Morrisons to open new stores. The commission launched a probe into the supermarkets in May 2006. Although it will not publish its final report until next March, this week's document will provide a clear indication of what it has found and the actions it intends to take.

The Sunday Times
A crackdown on "Tesco towns" is set to be unveiled this week by the Competition Commission when it releases the provisional findings of its 18-month inquiry into the UK grocery market. The regulator is expected to recommend a shake-up of planning law to stop any of the big four supermarket chains seizing a dominant position in a local market. It will argue that competition could be encouraged by the introduction of a “fascia” or competition test - a guideline to local authorities encouraging preferential treatment for planning applications from retailers that do not have a presence in the area.

Qatari-backed Delta Two is in talks with several banks over arranging emergency funding to keep its £10.5 billion bid for Sainsbury's alive. Last week, Delta Two boss Paul Taylor approached a number of bankers to discuss the option of raising £500m through a high-yield PIC or “payment in kind” bond. The option could be used to save the deal in case the Qataris refuse to provide the extra cash needed to complete the deal. On Thursday, Delta Two announced it would have to raise an extra £500m equity financing. This week the board of the Qatar Investment Authority will meet to debate whether to provide the cash. Sources close to the deal said there was no guarantee the funding could be secured.


Financial Times
The 11th-hour hitch in talks between Delta Two and Sainsbury's has arisen because the Qatari investment fund has been forced to confront the reality of a pension scheme shortfall. Many pension schemes do not have enough money in them to pay all promised benefits if they are immediately wound up. In Sainsbury's case, Delta Two is having to make the pension scheme more secure by moving some of the liabilities up the creditor list. This is standard practice for pension trustees faced with a leveraged bid - but it also means that the banks stumping up the debt to fund the £10.6bn deal want to receive higher interest payments.

The Independent on Sunday
British retailers are facing a tough Christmas as shoppers feel the pinch of rising living expenses. But experts warn that the real crunch will come in 2008. The British Retail Consortium says that there is "clearly nervousness" among its members in the run-up to Christmas, with consumer spending under pressure from higher mortgage costs and utility and tax bills. All the evidence shows that retailers have been discounting goods and offering promotions over the past few weeks to counter weaknesses in high-street spending. Asda has trimmed £150m off prices, selling Christmas puddings for 98p. The company said the cuts were "earlier than ever before".


The Mail
As revealed in Drapers this week, footwear chain LK Bennett is up for sale. Fashion chain Hobbs is weighing a £150m bid for the retailer. Founder Linda Bennett, dubbed the "queen of the kitten heel" in fashion circles, has hired Rothschild to sell the firm. Sources close to Hobbs, which is owned by private equity firm 3i, said boss Nick Samuel will ask to look at LK Bennett's books.

The Mail on Sunday
Philip Green is accelerating his international expansion plans with his biggest ever store opening schedule. At least 70 new stores are planned for this financial year throughout all his chains. This will take his total number of international outlets to 470 across all brands operating within his Arcadia group.

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.