Connect with us

Published

on

Almost 50 stores per day closed down across the UK during the first half of the year, research suggests.

Some 8,739 outlets went out of business across high streets, retail parks and shopping centres between January and June, figures from the Local Data Company suggest.

But 3,488 opened during the same period, resulting a net decline of 5,251.

When compared with last year, the data suggests the rate of closures slowed down – with 11,120 shops shutting their doors in the first half of 2020 as the COVID pandemic hit, a net decrease of 6,001.

The research was conducted for accountancy firm PwC, which said government support during the pandemic – such as the furlough scheme, business rates relief and the rent moratorium – played major roles in helping operators stay afloat.

Despite this, the firm has warned the second half of the year will be “make or break” for many stores as government help is wound down.

Fashion retailers were worst affected – with 1,063 stores shutting in the first half of the year. Some 452 charity shops, 428 car and motorbike outlets, and 337 betting shops also closed permanently.

More on Covid-19

City centres saw a 4.3% drop in the number of occupied retail outlets as people and businesses moved to suburban or out-of-town locations, reflecting the rise in people working from home.

Please use Chrome browser for a more accessible video player

Clear demand for shops after year of online growth. Video from May.

Commuter towns saw a 3% decrease in the number of shops, while villages saw a decline of 2.3%.

Lisa Hooker, leader of industry for consumer markets at PwC UK, said: “After an acceleration in store closures last year coupled with last-minute Christmas tier restrictions and lockdowns extending into 2021, we might have expected a higher number of store closures this year.

“Government support has proved to be a lifeline.

“However, the next six months will be make or break for many, particularly with the reinstatement of business rates, the winding down of furlough and the need for agreement on rent arrears, as well as uncertainty for hospitality businesses around further lockdowns, vaccine passports, and other operating restrictions.”

Most of the closures were on the country’s high streets, while shopping centres and retail parks were affected to a lesser extent.

Continue Reading

Business

Barclays fined £40m over ‘reckless’ financial crisis capital raising

Published

on

By

Barclays fined £40m over 'reckless' financial crisis capital raising

Barclays has been fined £40m over capital raising that averted its need for taxpayer aid during the 2008 financial crisis.

The Financial Conduct Authority (FCA) found that the bank should have disclosed more details to the stock market about the £11.8bn in funding, from Qatari and other sovereign investors, that it had previously described as “reckless” and lacking integrity.

The penalty followed a protracted investigation that began in 2013 but was held up by criminal proceedings brought by the Serious Fraud Office that led to the acquittal of all defendants charged, including Barclays.

A decision by the bank not to refer the FCA’s enforcement case to an Upper Tribunal meant that the watchdog’s planned fine could be imposed.

Its regulatory action concerned Barclays’ navigation of the events of 2008 when the-then Labour government took huge stakes in major lenders, including Lloyds and RBS – now NatWest – to prevent a collapse of the banking system.

The FCA said of its action: “The events in 2008 were of national importance as banks sought emergency recapitalisation.

“The FCA has a primary objective to ensure market integrity. Banks should treat their obligations to the market and shareholders seriously.”

More from Money

Barclays was yet to comment.

This breaking news story is being updated and more details will be published shortly.

Please refresh the page for the fullest version.

You can receive Breaking News alerts on a smartphone or tablet via the Sky News App. You can also follow @SkyNews on X or subscribe to our YouTube channel to keep up with the latest news.

Continue Reading

Business

‘When you hit profits, you hit growth’: Businesses criticise biggest budget tax increase in decades

Published

on

By

'When you hit profits, you hit growth': Businesses criticise biggest budget tax increase in decades

Tax rises announced during the recent budget will hit businesses rather than encourage growth, the head of one of the UK’s most prominent business groups will warn on Monday.

The Confederation of British Industry (CBI) has joined a choir of voices opposing Chancellor Rachel Reeves’s fiscal measures, which the Labour Party claims are needed to plug a £22bn “black hole” left by 14 years of Tory government.

Labour put growth at the heart of their campaigning during the last general election, but business believe the £40bn tax rises announced last month – the largest such increase at a budget since John Major’s government in 1993 – will stifle investment.

Rain Newton-Smith, who heads the CBI, is expected to say at the group’s annual conference in London that “too many businesses are having to compromise on their plans for growth”.

She will say: “Across the board, in so many sectors, margins are being squeezed and profits are being hit by a tough trading environment that just got tougher.

“And here’s the rub, profits aren’t just extra money for companies to stuff in a pillowcase. Profits are investment.”

Ms Newton-Smith will add: “When you hit profits, you hit competitiveness, you hit investment, you hit growth.”

The Office for Budget Responsibility (OBR), which monitors the government’s spending plans and performance, has previously said most of the burden from the tax increase will be passed on to workers through lower wages, and consumers through higher prices.

Last week, dozens of retail bosses signed a letter to the chancellor warning of dire consequences for the economy and jobs if she pushes ahead with budget plans.

Read more from Sky News:
How much does it cost to freeze your eggs and can it go wrong?

Storm Bert: Father rescues son from sinking car

Up to 79 signatories joined British Retail Consortium’s (BRC’s) scathing response to the fiscal announcement, which claimed Labour’s tax rises would increase their costs by £7bn next year alone.

It warned that higher costs, from measures such as higher employer National Insurance contributions and National Living Wage increases next year, would be passed on to shoppers and hit employment and investment.

The letter, backed by the UK boss of the country’s largest retailer Tesco, said: “The sheer scale of new costs and the speed with which they occur create a cumulative burden that will make job losses inevitable, and higher prices a certainty.”

Please use Chrome browser for a more accessible video player

From October: ‘Raising taxes was not an easy decision’

‘Businesses will now have to make a choice’

A few days after the budget, Chancellor Reeves admitted she was “wrong” to say higher taxes were not needed during the election campaign – as she warned businesses may have to make less money or pay staff less to cover a tax increase.

But she claimed the previous government had “hid” the “huge black hole” in finances and she only discovered the extent of it once her party was voted in.

She told Sky News’ Sunday Morning With Trevor Phillips: “Yes, businesses will now have to make a choice, whether they will absorb that through efficiency and productivity gains, whether it will be through lower profits or perhaps through lower wage growth.”

Continue Reading

Business

ITV back in spotlight as suitors screen potential bids

Published

on

By

ITV back in spotlight as suitors screen potential bids

Potential suitors have again begun circling ITV, Britain’s biggest terrestrial commercial broadcaster, after a prolonged period of share price weakness and renewed questions about its long-term strategic destiny.

Sky News has learnt that a number of possible bidders for parts or all of the company, whose biggest shows include Love Island, have in recent weeks held early-stage discussions about teaming up to pursue a potential transaction.

TV industry sources said this weekend that CVC Capital Partners and a major European broadcaster – thought to be France’s Groupe TF1 – were among those which had been starting to study the merits of a potential offer.

The sources added that RedBird Capital-owned All3Media and Mediawan, which is backed by the private equity giant KKR, were also on the list of potential suitors for the ITV Studios production arm.

One cautioned this weekend that none of the work on potential bids was at a sufficiently advanced stage to require disclosure under the UK’s stock market disclosure rules, and suggested that ITV’s board – chaired by Andrew Cosslett – had not received any recent unsolicited approaches.

That meant that the prospects of any formal approach materialising was highly uncertain.

The person added, however, that Dame Carolyn McCall, ITV’s long-serving chief executive, had been discussing with the company’s financial advisers the merits of a demerger or other form of separation of its two main business units.

More from Money

Its main banking advisers are Goldman Sachs, Morgan Stanley and Robey Warshaw.

ITV’s shares are languishing at just 65.5p, giving the whole company a market capitalisation of £2.51bn.

The stock rose more than 5% on Friday amid vague market chatter about a possible takeover bid.

Bankers and analysts believe that ITV Studios, which made Disney+’s hit show, Rivals, would be worth more than the entire company’s market capitalisation in a break-up of ITV.

People close to the situation said that under one possible plan being studied, CVC could be interested in acquiring ITV Studios, with a European broadcast partner taking over its broadcasting arm, including the ITVX streaming platform.

“At the right price, it would make sense if CVC wanted the undervalued production business, with TF1 wanting an English language streaming service in ITVX, along with the cashflows of the declining channels,” one broadcasting industry veteran said this weekend.

“They would only get the assets, though, in a deal worth double the current share price.”

Takeover speculation about ITV, which competes with Sky News’ parent company, has been a recurring theme since the company was created from the merger of Carlton and Granada more than 20 years ago.

ITV said this month that it would seek additional cost savings of £20m this year as it continued to deal with the fallout from last year’s strikes by Hollywood writers and actors.

It added that revenues at the Studios arm would decline over the current financial year, with advertising revenues sharply lower in the fourth quarter than in the same period a year earlier because of the tough comparison with 2023’s Rugby World Cup.

Allies of Dame Carolyn, who has run ITV since 2018, argue that she has transformed ITV, diversifying further into production and overhauling its digital capabilities.

The majority of ITV’s revenue now comes from profitable and growing areas, including ITVX and the Studios arm, they said.

By 2026, those areas are expected to account for more than two-thirds of the group’s sales.

This year, its production arm was responsible for the most-viewed drama of the year on any channel or platform, Mr Bates versus The Post Office.

In its third-quarter update earlier this month, Dame Carolyn said the company’s “good strategic progress has continued in the first nine months of 2024 driven by strong execution and industry-leading creativity”.

“ITV Studios is performing well despite the expected impact of both the writer’s strike and a softer market from free-to-air broadcasters.”

She said the unit would achieve record profits this year.

ITV and CVC declined to comment, while TF1, RedBird and Mediawan did not respond to requests for comment.

Continue Reading

Trending