Langton Capital – 2019-10-29 – PREMIUM – Soho House, Tech in Pubs, Which? Report, etc.
Soho House, Tech in Pubs, Which? Report, etc.
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A DAY IN THE LIFE:
So, the weather was better for our second & third days of staggering around the North York Moors but, with the mercury stuck at four degrees come sun, rain or sleet, the word ‘holiday,’ which always conjures up for us images of deckchairs, sun and beaches, isn’t as appropriate as it perhaps first appears.
‘Bracing’ would go some way to describe it. ‘Miserable’ isn’t right but ‘variable’ it certainly was and a few truths have been driven home.
First, putting in 22,000 steps a day in YO62 is not at all like clawing your way to the same figure over three or four days in EC2. Second, log fires, real ale and slippers are in the ascendency from a certain age and third, sheep, no matter how thick you think they are, are thicker than that.
I mean just how they, or indeed any animal, could think that licking filthy gravel from the middle of the road in a rainstorm in the face of oncoming traffic is a good idea is beyond me.
Anyway, we were ordered back to civilisation today at the very latest by teenagers with Halloween aspirations. On to the news:
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GENERAL NEWS – PUBS & RESTAURANTS:
Chief Executive of UKHospitality, Kate Nicholls has commented on the need for the government to take action on business rates for pubs, stating: ‘We understand why there has been a delay to the Budget, however, pubs need action to reduce costs specifically on the area of business rates. We hope the Government can commit to the long-awaited reform of business rates – particularly a 10% reduction in the multiplier. High streets, especially pubs have been hammered by rising property costs and we need action to address it at the earliest opportunity’.
The Telegraph reports that Soho House has secured a further $100m of investment to value the network of private members’ clubs & restaurants at $2bn. The funds are reported to have been raised from entrepreneur Bippy Siegal’s Raycliff Capital with further investment from US billionaire David Simon’s Simon Property Group. The company has said that the funds will be used to open new clubs and improve its mobile app.
Texas Roadhouse has released Q3 results showing revenues up 9.4% to £650.5k with net income increasing 25.4% to £36.5k. The group saw LfL sales increased 4.4%, while opening a further four sites in the US.
Offering locations for consumers to charge up their electronic devices could increase dwell time by 1.5 hours according to research from ChargedUp. The founder of ChargedUp, Charlie Baron commented: ‘A lot of our reviews say, ‘this allowed me to stay out longer’, ‘this allowed me to get home safely because I could book my Uber’. We’re proving that we are increasing consumers dwell time in our venues and we have data to show that people rent our power banks, on average, for an hour and half’.
Tech company Screach has teamed up with broadcaster Premier Sports to enable pubs to offer low-cost access to live sport. Screach, the cloud-based platform allows venues to live stream HD broadcasts and create bespoke, audience-specific adverts on existing screens via cable internet connections and Screach’s smartbox.
Data from GlobalData has indicated that rum sales in the UK have increased 7.5% between 2017 and 2018, with gin sales up 3.8%.
Karen Forrester is set to step down as chief executive of TGI Friday UK after 12 years in the role. Ms Jones said ‘there are so many things about my journey I am proud of. From winning back our stripes, getting into the Guinness Book of Records, to topping the Sunday Times Best Companies listing, as the best big company to work for in 2015. I’m leaving a business which is strong and healthy.’
US chain Chick-fil-A is reported to have opened a second UK site at the Macdonald Aviemore Resort in the Scottish highlands.
The CBI has reported that retailers’ sales, though still falling, are declining at their slowest pace in 6mths in October.
Chapel Down has said that this year’s grape harvest will be its second largest ever. Last year’s was the highest yield on record. 2019 is said to by 92% of 2018’s harvest.
Pernod Ricard’s Absolut vodka division has teamed up with Carlsberg and Coca-Cola in order to develop paper packaging robust enough to hold beverages. The joint venture will be called Paboco and has already released two prototypes.
HOLIDAYS & LEISURE TRAVEL:
Which? reports JD Wetherspoon has been rated as one of the best hotel chains in the UK, with customers praising the ‘outstanding value for money’ and its central locations in ‘sympathetically converted’ period buildings.
Which? Travel reveals Britannia Hotels has been named to worst UK hotel chain for the seventh year running. Guests gave Britannia, which has 61 hotels across the UK, one-star ratings in almost every category including value for money and food and drink.
The 555 stores former Thomas Cook stores acquired by Hays Travel have generated £1m in business with Jet2 in their first few days of operation.
Australia’s world famous Uluru has been closed off to tourists wishing to climb it since Saturday.
Research by currency exchange firm WeSwap found that 63% of millennials are concerned that the cost of their holidays will increase once the UK leaves the EU. Only 24% of those aged 55-plus believe Brexit would not make their holidays more expensive.
UK Hospitality has welcomed the possible introduction of legislation re the home-sharing market in Scotland saying ‘we have been highlighting some of the issues in the short-term let sector: safety fears, the potential for anti-social behaviour and the lack of transparency, and it is good to see the results of the consultation support this. We welcome the commitment by the Scottish Government to review the evidence and take appropriate action.’
Plans to create a lagoon on the Humber Estuary have been revealed, with the ‘Lagoon Hull’ project estimated to cost £1.5bn, according to the Telegraph. The development would create up to 14,000 jobs and foster a ‘maritime living environment’.
Alphabet, the parent company to Google has made an offer to acquire the wearable device maker Fitbit. Shares in Fitbit have increased 27% on the back of the news taking the group to a market cap of $1.4bn.
Spotify recorded a Q3 profit yesterday with revenues also ahead of expectations. The group’s shares rose c12% in early trading.
FINANCE & ECONOMICS:
The ONS reported yesterday that the UK CPI rose by 1.7% in the year to September, the same rate as in the year to August.
Brexit & politics:
Labour has demanded that Chancellor Sajid Javid publish economic forecasts prepared for the budget in order that the government does not avoid public scrutiny before a potential election.
The EU has agreed to the 3mth flexible Brexit extension requested by PM Boris Johnson last weekend.
START THE DAY WITH A SONG:
Yesterday’s song was Johnny Flynn with Dectertorists (theme tune to Mackenzie Crook’s BBC show of the same name). Today who sang:
He walked down a busy street,
Staring solely at his feet
Clutching pictures of past lovers at his side
RETAIL WITH NICK BUBB:
Sosandar: The small, but fast-growing Online womenswear business Sosandar, which has a market cap of £26m and is featured on the front cover of Drapers magazine this week, has put out a bullish half-year update, reporting 53% sales growth in the six months to end September. And it says “the company is very pleased to report that October is already the first month that its net revenues (post returns) have surpassed £1m”.
Saturday’s Press and News (1): In terms of Retail news, the big story in the Saturday papers was the Times scoop that the shadowy Barclay brothers have apparently put the Telegraph newspaper group up for sale, along with the Shop Direct home shopping group. The main Business story in the Telegraph itself was that the Silchester fund management group has built up a 10.4% stake in Morrisons. The Telegraph also highlighted the view of one City broker that a Dec 12th General Election could be good for the Retail sector, by relieving Brexit uncertainty just before the main Christmas spending period and the New Year Sales. However, the Telegraph also had an interesting column arguing that it is good that the UK is no longer “a nation of shopkeepers” and that retail jobs are being lost, as the economy is evolving instead into being “a nation of healthcare workers and business services
Saturday’s Press and News (2): The Daily Mail highlighted that Boohoo has launched a Cara Delevingne designed range for its fast-growing Nasty Gal business and several of the market reports flagged the boost that Boohoo got on Friday from a bullish report from Goldman Sachs. The Daily Mail also noted the appointment of Mark Gifford as Chairman of Debenhams. The FT had a feature on the decision by Sports Direct to appoint RSM as its new auditor (“RSM ventures where other auditor s fear to tread”). In other news, the Guardian said there is pressure on the hapless Chancellor, Sajid Javid, to publish his economic forecasts, given his failure to provide a Brexit impact assessment and the decision to scrap the Budget on Nov 6th. And looking further afield, the FT had a feature on its International news pages about the controversial American Dreams shopping and leisure mall which has just
Sunday’s Press and News (1): There were two big stories in the Sunday papers: the Sunday Times flagged that fears are rising for the future of Mothercare in the UK (with KPMG called in again to advise on further store restructuring, including a possible second CVA) and the Mail on Sunday highlighted that Sports Direct has been engulfed in a $100m legal battle in the US over its acquisition of the bankrupt Eastern Outfitters sports chain (with Mike Ashley subpoenaed to give evidence under oath). The Mail on Sunday also flagged that ASOS has built up its warehouse stocks to launch a big Black Friday sales blitz and that City brokers are expecting Marks & Spencer to report another big fall in profits and further “exceptional” costs with its interims on Nov 6th. In contrast, the Sunday Times noted, in passing, that Next should provide a “glimmer of hope” with its Q3 update this
Sunday’s Press and News (2): The Sunday Times also flagged that the Bonmarche fashion chain is likely to be bought out of administration by the secretive entrepreneur Philip Day and it had a follow-up feature article on the unsavoury “financial engineering” techniques that he uses to buy distressed retailers (“Stores mogul turns a profit from disaster”). The Sunday Times also noted that the embattled Philip Green is separating off the logistics operations of Top Shop from the rest of the beleaguered Arcadia group, whilst denying that this is a prelude to a break-up. The Sunday Telegraph highlighted that the struggling John Lewis Partnership is stepping up its efforts to build a personal finance and insurance business to offset the pressure on its core operations. The Sunday Telegraph also had a feature on the expected shake-up of the Online luxury retailers Farfetch,
News Flow This Week: It still looks as if Brexit won’t now happen on Thursday (aka Halloween, Oct 31st), with the EU to grant a 3 month extension, but whether MP’s will vote today in favour of a pre-Christmas General Election is unclear…One thing that is clear is that Next will set the scene for the Retail sector this week, with their Q3 trading update on Wednesday. And the end of the month is definitely coming up very quickly now, so, after the delayed CBI Distributive Trades survey for “October” is published this morning, we get the GFK Consumer Confidence survey for October first thing on Thursday…