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Pension watchdogs are scrutinising the collapse of Ralph & Russo, the upmarket British-based fashion brand which is now at the centre of a legal fight.

Sky News understands that The Pensions Regulator is examining the treatment of the company’s retirement scheme in the period before administrators were called in in March.

The status of the regulator’s work was unclear on Friday, although sources said its work had got under way recently.

Ralph & Russo, which was sold last week by its joint administrators to Retail Ecommerce Ventures (REV), a US-based investment vehicle, is best-known for having designed the Duchess of Sussex’s £56,000 engagement dress.

It collapsed after running out of cash, with the business failing to make a number of salary payments and staff pension contributions in the months prior to its insolvency.

The Pensions Regulator, which has a wide range of enforcement powers, said in a statement that it did not comment on “individual schemes or employers”.

“Where a company has become insolvent we will work with relevant third parties, such as insolvency practitioners, the Insolvency & Redundancy Payment Services and the pension scheme provider in our role to protect savers,” it added.

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“We have no further comment.”

Administrators from Begbies Traynor and Quantuma have launched a High Court action against Tamara Ralph, the brand’s co-founder, alleging that she and business partner Michael Russo extracted substantial sums of money from the company.

In the particulars of claim, a legal document which sets out the basis of their case, the joint administrators alleged that from October 2020 until March this year, the company “failed to make any pension contributions to Aviva, the company’s pension trustee… notwithstanding the fact that employee contributions were deducted automatically from the employees’ monthly salary via the company’s payroll and PAYE mechanisms”.

The documents assert that “approximately £176,000 was appropriated and/or diverted from the company pension scheme”.

In a statement on Friday, a spokesman for Ms Ralph said that she “has not been involved in any wrongdoing”.

The spokesman added that “along with the company’s directors and c-suite [top executive] staff were advised to seek financial and legal advice prior to making any payments from Ralph & Russo”.

“Ms Ralph was off on maternity leave at the time but the directors followed the advice of their legal and financial advisors on all payments.

“One of the advisors dealing with the financial decisions was Andrew Andronikou of the firm Quantuma [who] subsequently became one of the joint administrators.

“The advice from Andrew and Quantuma was followed completely.”

Ms Ralph had previously denounced the claims against her in the court action as “misconceived and demonstrably false”.

A spokesman for the joint administrators said: “We have a statutory duty to investigate the affairs of the company, the conduct of the directors and any shadow directors and, in particular, in relation to the £60m invested into the company and spent by the founder directors at the expense of the pension regulator, HMRC, secured, preferential and unsecured creditors.

“We are continuing our enquiries in that regard.”

The rescue of R&R by REV – which was set up by Tai Lopez and Alex Mehr, two entrepreneurs – follows the injection of tens of millions of pounds in funding into Ralph & Russo from the likes of Candy Ventures, the vehicle of entrepreneur Nick Candy, and John Caudwell, the billionaire founder of the Phones 4U retail chain.

Tennor Holding, the owner of the La Perla lingerie brand and investment vehicle of financier Lars Windhorst, invested roughly £40m in return for a minority stake in Ralph & Russo in 2019 which valued it at approximately £175m.

The fashion house, which specializes in haute couture and ready-to-wear clothing and luxury goods, has notched a number of notable achievements during its brief history.

In 2014, it was the first British designer in nearly a century to be accredited by the French body which decides which fashion labels can officially be designated haute couture.

It sprang to global prominence in 2017 when Meghan Markle wore one of the designer’s dresses in her engagement photographs.

Ralph & Russo’s celebrity customers are also reported to include Beyonce, Angelina Jolie and Gwyneth Paltrow.

Its average client spends £50,000 per transaction, and it has opened boutiques in Doha, Dubai and Monaco.

The company also operates from locations in London’s Mayfair and New York’s Fifth Avenue, befitting its internationally renowned designs.

Its journey into choppy legal and financial waters was partly triggered by the pandemic’s impact on its business, with a dearth of red carpet events – one of the mainstays of the haute couture industry – hitting demand for Ralph & Russo’s dresses.

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Billions for ‘unproven’ carbon capture technology will have ‘very significant’ impact on energy bills, MPs warn

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Billions for 'unproven' carbon capture technology will have 'very significant' impact on energy bills, MPs warn

The government is spending £22bn on “unproven” technologies which will have a “very significant effect” on energy bills, according to an influential committee of MPs.

There has been no assessment of whether the programme to capture and store carbon from the atmosphere is affordable for billpayers, said a report from the Public Accounts Committee (PAC) of MPs.

The financial impact on households of funding the project has not been examined by government at all, the PAC said.

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Even if the state’s investment pays off, the technology is successful and makes money, there is no way for profits to be shared to bring down bills, it added.

Private sector investors, however, would recoup investment, according to committee chair Sir Geoffrey Clifton-Brown.

“All early progress will be underwritten by taxpayers, who currently do not stand to benefit if these projects are successful,” he said. “Any private sector funding for such a project would expect to see significant returns when it becomes a success.”

That’s despite the vast majority (two-thirds) of the £21.7bn investment coming from levies on consumers “who are already facing some of the highest energy bills in the world”, it said.

But there is no evidence to say the programme will be successful despite the government “gambling” its legally mandated net zero targets on the tech, committee chair Sir Geoffrey added.

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PM to invest £22bn in carbon capture

There are no examples of carbon capture, usage and storage (CCUS) operating at scale in the UK, according to the PAC report.

As part of its work, the PAC heard the technology may not capture as much carbon as expected.

International examples show the government’s expectations for its performance are “far from guaranteed”, it heard as part of its inquiry.

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A threat to net zero

This lack of proof of the technology working is a threat to the UK reaching its net zero 2050 emissions targets.

Last year the government downgraded the amount of carbon it expects to store each year as the goals were seen as “no longer achievable”, but no new targets have been announced, creating a shortfall in the path to net zero.

It is now “unclear” how the government will reach its goal, the PAC report said.

“Our committee was left unconvinced that CCUS is the silver bullet government is apparently betting on”, Sir Geoffrey said.

The £22bn investment was due to be made over 25 years and into five CCUS projects.

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Interest rate cut – but economic growth forecast slashed in blow to chancellor

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Interest rate cut - but economic growth forecast slashed in blow to chancellor

The Bank of England has cut interest rates by another quarter percentage point, bringing down the cost of borrowing to 4.5%.

And in a sign that households can expect more cuts in the months to come, two members of the Bank‘s Monetary Policy Committee said they would have preferred to reduce rates even more, by a full half percentage point.

Follow live reaction to interest rate cut in the Money blog

However, the Bank slashed its forecast for economic growth, forecasting that the economy will skirt clear of a formal recession only by the narrowest margin in the coming months, and downgraded its estimate of the economy’s ability to generate income. And in a further blow to the chancellor, it said her latest growth plans, unveiled in a speech last week, will add nothing to gross domestic product growth in its forecast horizon.

The Bank’s governor, Andrew Bailey, said: “It will be welcome news that we have been able to cut interest rates again today. We’ll be monitoring the UK economy and global developments very closely and taking a gradual and careful approach to reducing rates further.

“Low and stable inflation is the foundation of a healthy economy and it’s the Bank of England’s job to ensure that.”

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UK interest rate cut to 4.5%

The Bank’s forecasts seem to indicate that there will be at least two further rate cuts in the coming years and that that will be enough to bring inflation down towards its 2% target. However, investors are betting on more cuts.

The Monetary Policy Report and Bank forecasts released alongside the decision today signal that the economy is due to have another few years of weakness. They cut the forecast for economic growth this year, next year and the following year, as well as raising the inflation forecast. The Bank also said that the economy’s potential growth rate had dropped, down from 1.5% this time last year to 0.75% at the moment.

It said that while it expected last October’s budget to boost economic growth by 0.75%, thanks largely to greater public investment, it also expected the National Insurance rise to weigh down on activity, in particular by pulling down employment.

Analysis: Where do interest rates go from here?

It also warned that the tariffs threatened by Donald Trump on various economies posed a risk for economic growth in the coming years, though it has yet to incorporate them into its models.

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Interest rate path is tricky to navigate in tougher economy

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Interest rate path is tricky to navigate in tougher economy

Let’s start with the simple bit: interest rates have been cut – down by another quarter percentage point to 4.5%. But what happens next?

Not long ago, the answer was quite simple: the Bank of England would carry on cutting borrowing costs, one quarter point cut every three months, until they reached, say, 3.5%.

That, at least, was the expectation this time last year.

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But things have become more complex, more unpredictable in recent months.

Instead there are two paths ahead of us. One of them, let’s call it the high road, sees those borrowing costs being cut only gradually, down to 4% in a couple of years’ time.

Down the other road, the low road, the outlook is quite different: rates will be cut faster and more. They go down below 4%, perhaps as low as 3.5%, perhaps even lower.

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The funny thing about today’s splurge of information and forecasts from the Bank of England is that it’s not entirely clear whether we’re on the high road or the low road anymore.

Now, strictly speaking, the forecasts and fan charts produced by the Bank’s staff tend towards the former, more conservative view – the two cuts.

But then look at the voting patterns on the monetary policy committee (MPC), where two members, Swati Dhingra and Catherine Mann just voted for a full half percentage point cut, and you’re left with a different impression. That rates will go lower, and quickly.

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Britain has ‘huge potential’

And in truth, that’s what often happens when the economy is weakening.

When gross domestic product, the best measure of economic output, is flatlining or shrinking, when inflation is low (especially when you look beyond the temporary bump caused by energy prices) – that’s usually precisely the time the Bank slashes rates with abandon.

And that’s precisely the situation the UK finds itself in at the moment.

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But the problem is that a few things have complicated matters.

One is that the government decided to splurge more money in last October’s budget. That extra money sloshing around in the economy makes the Bank somewhat less willing to cut rates.

Another is that although the economy is weak, inflation is still high – indeed, the Bank actually raised its forecast for the consumer price index in today’s forecasts. Another is that the world economy has become a significantly more unstable place in recent months.

Germany is in recession. The US, under Donald Trump, is threatening tariffs on its nearest allies.

It’s not altogether clear whether the response to all this is lower interest rates.

Added to this, despite the chancellor’s best efforts, there is little evidence that her pro-growth policies are boosting economic growth – at least according to the Bank’s own forecasts.

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These are tricky waters to navigate.

All of which helps explains why it’s no longer quite as clear as it once was what happens next.

My suspicion is that the Bank will end up cutting rates, probably more than those two cuts baked into its forecasts. But such forecasts are even more fraught than usual.

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