Marston’s, Pizza Express, Revolution Bars, summer holidays & other:

PREMIUM EMAIL – PLEASE DO NOT FORWARD:

A DAY IN THE LIFE:

I can’t get The Smiths’ Every Day is Like Sunday out of my head.

I think it’s because Monday really was like Sunday this week. Not, hopefully, because every day is silent and grey.

Just popped it on YouTube. He really could write lyrics, could Mr Morrissey and, as it was followed by Ms Kate Bush’s magnificent Running up the Hill, I had to shut it down otherwise I’d have been well and truly down that 1980s rabbit hole.

Anyway, another glorious weekend for the pub trade to sadly miss and mourn and fireworks for Mr Cummings, whose attempt to look human in front of the cameras, it has to be said, were perhaps always doomed to failure. On to the news:

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• Marston’s. More on the company’s JV with Carlsberg to create The Carlsberg Marston’s Brewing Company

• Current (non) trading. Mixed signals. And why aren’t beer gardens allowed to open?

MARSTON’S CREATES BEER JV WITH CARLSBERG:

Why the shares doubled:

• Marston’s shares doubled on Friday. That because the market cap was around £200m and the deal with Carlsberg will see it receive almost all of the £273m equalisation payment (some £34m will be deferred for a year) and will still own 40% of the enlarged brewing operation.

• The deal effectively values Marston’s brewing assets alone at around £580m.

• Certainly there is debt in the businesses – but shareholders were sharply reminded on Friday that that (the business as a whole) also includes the group’s largely freehold estate of leased, tenanted and managed pubs as well as its lodges.

• The combined operation will include all of Carlsberg’s UK brewing assets. The opportunities for synergies – both costs and sales – are material. And the cash received is very significant in relation to Marston’s own market cap.

The debt position:

• Marston’s will use the proceeds to pay down its debt.

• Any residual fears of a rights issue should have been pushed out of the way for some time. Nobody is yet clear how operators will trade after 4 July but, on Friday, the market took a view and Marston’s shares rose by over 100%.

Areas of further potential interest.

• Some of Marston’s brands could be pushed harder in Europe using Carlsberg’s distribution and sales network.

• Carlsberg will have no interest in the company’s pub estate – but Heineken has taken over Punch in recent years.

• Marston’s is committed to the JV. But, over time, some observers might conclude a full exit is possible (if not likely at this stage).

• This increases the proportion of Marston’s assets outside the securitisation.

INDUSTRY PERFORMANCE IN LOCKDOWN:

The current state of play.

• We’re still on for a 4 July reopening. The position re the furlough is becoming clearer. Employers will need to contribute more from August. The position re landlords is still subject to individual negotiation.

Company preparations:

• Industry analyst Peter Backman points out that a whole host of leisure companies have been tapping shareholders for more cash.

• He says many companies are now ‘reasonably well placed to withstand some really rocky times ahead.’

• Nobody at this stage would say that ‘risks are on the upside’ – but hopefully we can hope to be allowed to hope.

• However, there are a large number of companies still at the other end of the seesaw.

• Casual Dining Group last week added its name to the list of companies reviewing their finances and it would appear that Pizza Express has made the same sort of comment over the long weekend

Crunch points:

• Two big dates looming up are 24 June, when Q3 rents should be paid, and 4 July, when pubs and restaurants should be allowed to reopen

• The first of these dates could see a number of companies fail. Landlords may have not chased up Q2 payments, which were due end-March, but they are unlikely to let two quarters slide

• Indeed some landlords will have rolled up Q2 into Q3 and may be presenting double-bills to some tenants, who are in an even worse position financially than they were three months prior

• The reduction of furlough contributions from the government from August may also cause some problems

• Companies will either have to make up shortfalls themselves or cut wages to staff who may decide that they have to move on and therefore not be available when restaurants try to gear up

Other considerations:

• At present, the bad may be being supported alongside the good

• When support is gradually removed, the difference between the two classes of company will be much more obvious

MARSTON’S CREATES BREWING JOINT VENTURE WITH CARSLBERG:

Marston’s on Friday announced the creation of a brewing JC with Carlsberg UK. Our comments are set out below:

Main terms of the deal:

• Marston’s and Carlsberg UK Holdings Limited are forming a JV to be named Carlsberg Marston’s Brewing Company (CMBC). The groups have been discussing this since late-2019

• The JV values the Marston’s Brewing Business at up to £580 million (13.0x adj. 2019 EBITDA) and the Carlsberg UK Brewing Business at £200 million

• Marston’s will receive a 40 per cent stake in CMBC and a cash equalisation payment of up to £273 million. Carlsberg UK to receive 60 per cent stake in CMBC

• Of the cash payable to Marston’s, £34 million will be deferred for 12mths from completion. The amount that is payable will be with reference to the share prices of a basket of pub and brewing companies (comparing their pre-Covid share price with that in a year’s time). This is on a sliding scale & is not binary

• The partners estimate there will be ‘significant value creation through synergies and productivity improvements, with reported annual joint venture cost synergies of around £24 million expected by the end of the third year following completion’

• The synergies (and Marston’s hopes for an increase on the £24 million mentioned) and combination of the business will cost around £34 million to enact

• The deal will be earnings enhancing in its second year. It would have been accretive in the first year, but for the combination costs

• The combined business will have c13.4% of the UK ale market and c14.4% of UK lager

• Marston’s CEO Ralph Findlay will be non-exec chairman of the JV

• There is a long term supply agreement for Marston’s pubs – but it does not have volume minimums and it is not exclusive. It is arms’ length

Implications for Marston’s

• Marston’s says the ‘cash equalisation payment to Marston’s PLC will materially reduce debt outside the securitisation and provide additional financial flexibility.’

• It says that it will be free to ‘focus on its high quality, well invested pub and accommodation business while retaining a 40 per cent interest in a larger, more attractive brewing business.’

• The transaction is anticipated to complete in Q3 of this calendar year, subject to shareholder approval and competition clearance

• The group crystallises the value of its beer business and the company retains a stake in the upside of the combined business. The transaction will generate synergies and productivity will be improved

• Marston’s will be contributing c£196m of assets.

• The group’s strategy re its pubs (and on getting debt down) remains unchanged. 

Cash flow and balance sheet implications:

• Marston’s generated cash from its beer company of around £18 million after capex and tax and the company believe that year one, pre-synergy dividends from the JV will be around the same amount

• This in addition to the £273 million (less a deferred £34 million), which will be received in a lump sum in the short term

• The dividend stream needed to make this cash neutral is pre-synergies and it should represent a growing income stream

• This should materially reduce the chances of Marston’s needing a Rights Issue. The group says it will increase financial flexibility and materially reduce net debt (outside of the securitisation)

Complementary brewing businesses:

• Marston’s 2019 brewing sales were £389m (Carlsberg £414m) with EBITDA of £44.6m (Carlsberg £21.6m)

• Marston’s has an extremely profitable business – hence the cash equalisation.

• Marston’s has 9.6% of the UK ale market and 1.5% of its lager. Carlsberg is the other way around with 3.8% of ale and12.9% of the UK lager market.

• Carlsberg has 5.5ml HL of capacity and Marston’s 2.1m.

• Marston’s business has historically been very strong in the on-trade. Carlsberg is a major player in the off-trade.

• CMBC will be no4 in the UK market behind AB InBev, Molson Coors & Heineken.

• Marston’s shareholders will vote on the deal in June and the transaction should complete in calendar Q3

Marston’s debt:

• Marston’s will use the proceeds to pay down its debt.

• The valuation for the company of £580m of brewing assets compares with a market cap for the company as a whole of c£225m

• Marston’s says it has now agreed £70m of increased bank facilities. It will speak to bondholders re short term waivers later this month

Analyst questions & Langton comment:

• Are there any break clauses?

• Can the brands be taken into Europe? Yes. This is an area of interest. Some 10% of MARS volumes are presently exported. The global Carlsberg network should help this.

• Does Carlsberg have any interest in the pub estate? Carlsberg sees itself as a brewer.

• Could / should you have taken more cash out? Would a 30% or 20% stake have been ‘better’? The group tried to get the ‘upside vs immediate cash’ balance right. Also Carlsberg really did want a JV partner.

• Might you exit the JV entirely further down the line? Marston’s is committed. It is, in principle, open to further consolidation, if opportunities arise.

• Re Revolving Credit Facility. Is there any pressure thereon? The original target of getting debt down to c£1.2bn (pre this deal) remains intact.

• Was the Carlsberg business losing market share? It was heavily exposed to the standard lager market – and that has been the most difficult area in the UK market.

• Assets outside the securitisation? Around £2bn.

• The Marston’s estate offers upside for the Carlsberg portfolio of beers.

• Might you buy pubs out of the securitisation? Not in the short term. The group will reduce the Revolving Credit Facility. The group mentioned a couple of times that it will reduce debt

• Tax and pension implications. There should be no significant tax liabilities. Marston’s will retain historic pension liabilities.

• Accounting. MARS will report CMBC results as a single-line entry.

Conclusion:

• The deal chrysalises value, brings in cash with MARS retaining an element of upside and it should lessen any funding or liquidity concerns.

• Marston’s estate is attractive to the JV. Carlsberg, already a major supplier, should increase sales.

• Synergy benefits will flow through and the deal is cash flow neutral in the short term. Dividends from the JV over time should be on a rising trend and the capital element of the transaction will come straight off debt. 

The Press & other comments:

• Broadly just sticking to the facts. Some considering that Marston’s cash coffers will look a lot healthier and others bemoaning of the fact that another British brewer (after Greene King and Fuller’s recently) is now majority-owned by foreign interests.

• The FT quotes CAMRA as saying that the deal was a “red flag” to beer drinkers. It is worried that choice may be restricted.

• The Society of Independent Brewers says ‘this merger is the latest in a series of consolidating measures within the UK beer market. It has the potential to take the Marston’s brand global and brings Carlsberg back into the distribution and porterage business only after a few short years of leaving it.’

• It goes on to say ‘this merger yet again has the potential to impact negatively on small independent brewers by further reducing the access to market they receive.’

PUB & RESTAURANT NEWS:

Covid-19 & ‘new normal’ news:

• Outdoor markets and car show rooms are to be allowed to open from 1 June, non-essential shops to reopen from 15 June. Pubs and restaurants are hoping to be allowed to open from early July. It is perhaps a missed opportunity that beer gardens were not included in the 1 June or 15 June dates.

• Some further press coverage of CGA’s comment that a third of pub and restaurant companies will permanently shutter some of their units and another third have yet to make up their minds.

• CGA says ‘industry estimates of the scale of closures vary widely, from below 10% to as high as 30% of total sites.’ CGA points out that around two-thirds of the UK’s 115,108 licensed venues are independents, some of whom may not have the financial resources to cope with an extended shutdown.

• The BBPA says that pubs could have lost the sale of as many as 10m pints over the Bank Holiday weekend. The weekend was also slated to feature the FA Cup Final on Saturday.

• The BBPA says ‘not all pubs will reopen from July as many won’t be able to meet the social distancing measures required by then. No two pubs are the same and for many, ensuring a distance of two metres will be impossible, keeping them closed for much longer.’

• The BBPA proposes instead that guidance from the World Health Organisation should be used, that is only one metre of space needs to be kept between customers in order to prevent the spread of infection.

• The BBPA says such a move would increase the number of pubs that would be able to open by 120%.

• The latest weekly Hospitality Leaders Poll by MCA Insight/HIM has concluded that the hospitality industry would benefit materially if social distancing guidelines were reduced from 2m to 1m. Some 40% of operators believe their businesses would be viable with a one-metre social distancing rule as opposed to two metres. Another 36% said it was a possibility.

• Tourism and other bodies have welcomed the proposal that there should be another Bank Holiday in October and that pubs should be allowed to use pavements outside their premises. The BBPA says ‘we welcome the idea of an additional bank holiday in October and support any Government help to boost the speed of recovery of pubs and breweries.’

• An increased number of staycations this year should be good for UK pubs and restaurants. See Holidays & Leisure Travel below.

• The FT reports that restaurateurs in London fear the coronavirus crisis will end City lunches, at least for a time. It says ‘workers [may] increasingly work from home and transport operators restrict commuter numbers.’ Whether or not customers want to mix with each other at lunch times remains to be seen.

• Industry investor and Draft House Inns founder Charlie McVeigh has told the Morning Advertiser that ‘we’ve got to get people back out again because there are a huge number of people who are sitting at home afraid’. He says that ‘the cure is becoming worse than the disease’.

• Black Box Intelligence in the US suggests that restaurant sales bottomed out last month. It says, however, that ‘recovery is a delicate word.’ Black Box says the attitude of would-be customers remains critically important.

• OpenTable in the US reports that as many as 40% of US restaurants may not reopen once the coronavirus lockdown restrictions are eased. OpenTable reports that customer numbers were down 95% on 13 May compared with the same day a year ago. Admittedly this does not cover takeaway or delivery sites & sales.

• The US National Restaurant Association reports that the US on-trade lost $30bn of revenue in March and $50bn in April.

The consumer

• NPD says that British consumers may be somewhat financially bruised by the end of the lockdown period. It suggests that they could be looking for deals. It says ‘deals and promotions will be extremely important for the industry.’ NPD says that deals had been growing in popularity already with deal-based sales growing 3x more quickly that overall visitor numbers.

• NPD says that consumers may stick with the delivery habit post lockdown. It also says that technology, online or app-based ordering and the like will also retain much of their recent custom.

Company news:

• Pizza Express is reported to be considering a CVA, which would see it permanently close a material number of its 470 UK restaurants. The company, which is owned by Chinese private equity firm Hony Capital, recently refinanced some of its £1.1bn of debts. It is quoted as saying ‘while planning for the future, we will undertake a comprehensive review of our business encompassing our restaurants, including the roll-out of Future Express, and planned digital innovations.’ It says ‘when complete, and hopefully with greater clarity around how our restaurants can re-open safely, we will take the right steps to ensure Pizza Express’ next 55 years are as successful as the last 55 years.’

• Revolution Bars Group has today updated on its debt position saying it ‘is pleased to announce an extension to its debt facilities, which the Board is confident will provide the Group with sufficient liquidity for the foreseeable future.’

• RBG says ‘as announced on 14 April 2020, the Group’s lenders, NatWest, agreed to increase the Group’s Revolving Credit Facility from £21.0m to £30.0m until 31 August 2020, following which it would step down to £24.0m. NatWest also agreed to waive all financial covenant tests at March 2020 and June 2020.’

• The group says it can ‘announce that, subject to final documentation, NatWest has agreed to further increase the Group’s overall debt facilities, utilising the UK Government’s CLBILS. NatWest will provide the Group with a £16.5m term loan and the Facility will remain at £21.0m.’ The Term Loan will mature on 30 June 2023, following which it will need to be repaid or refinanced.

• RBG says it is ‘confident that the Group will have sufficient liquidity for the foreseeable future, even taking into account the Board’s downside COVID-19 trading scenario.’ CEO Rob Pitcher says ‘again, we welcome and are delighted with the additional support from NatWest. They continue to act as a true partner to our business and this decisive action will enable us to emerge from this crisis in a financially stable position. When restrictions are lifted, we will re-open with much caution – prioritising the health and safety of our employees and guests above all else. However, with the security of a stable financial position and underpinned by our young guest base, we believe that the Group is well placed to return to good levels of trading reasonably quickly.’

• JD Wetherspoon has said it will spend £11m to ensure its staff and customers are safe before its pubs reopen. It intends to open its 875 pubs across the UK and Republic of Ireland, when it has the official go-ahead from the relevant government.

• Fuller’s CEO Simon Emeny has said that the company is ready to reopen its pubs but adds that around a half will have to stay shut if two-metre social distancing is enforced. Fuller’s says that ‘electronic ordering’ will be in place by July 4, the earliest date on which pubs will be allowed to open.

• Franco Manca now has 12 units open for collection and delivery. It will open a further 19 this week.

• Taco Bell is to hire a further 30,000 staff in the US.

• Boparan Restaurant Group, which owns Giraffe, has confirmed the purchase of 30 Carluccio restaurants. Around 40 restaurants and 1,000 jobs will be lost.

• Greene King’s tied tenants are to benefit from a 90% rent reduction.

• Honest Burger is to launch a new operation, Honest Chicken, with the first unit to open at King’s Cross.

• Moody’s has reported that Compass Group’s £2 billion share issuance is credit positive.

• Leicestershire brewer and pub owner Everards has secured a £5m CBILS loan from Lloyds Bank. CFO Nigel Allen says ‘this loan will allow Everards to help continue to support our 170 individual business owners and enable us to remain on the front foot for re-opening once lockdown is lifted and pubs can re-open.’ Mr Allen says ‘it’s very difficult to envisage what the new post COVID-19 world will look like for the hospitality and leisure sector and how quickly consumers will return to their local pub. For us, the CBILS loan from Lloyds Bank means that we can continue to support our business, working towards delivery of our long-term strategy.’

HOLIDAYS & LEISURE TRAVEL:

• The UK is to impose a 14 day quarantine period on international travellers arriving from abroad from 8 June.

• UK Hospitality has commented on the government’s quarantine proposals saying ‘the imposition of a quarantine period will inevitably damage international visitor travel, and the longer it is in place, the more damage it will wreak.’ UKH says ‘there needs to be, as a bare minimum, an indication of how long measures might be in place, to allow businesses to plan, and criteria should be set out, so that we know what criteria must be fulfilled to enable removal or change to quarantine.’

• France has said that it will impose 14 day quarantine requirements on UK travellers if similar measures are introduced first in the UK.

• Spain is to drop its 14dy quarantine requirement from 1 July.

• Specialist Leisure Group, which owns the Shearing’s coach holiday business, has collapsed into administration.

• The Coach Tourism Association has cautioned that 40,000 jobs could be at risk from the Covid-19 pandemic. CTA chairman John Wales has called for coach operators to given access to the same state aid as restaurants, hotels and pubs.

• STR has forecast that average daily room rates across the US hotel industry could fall by around 22% this year. It says that the drop will not be recovered completely next year. STR says ‘ADR recovery is never v-shaped. We saw that post-9/11, and we also saw that in 2009. We’re expecting ADR will increase only 1.7%, which is a far cry from a V-shaped recovery.’

• STR expects US hotel occupancy to average 35.8% for this year and to rise to 52.1% in 2021.

• TUI has said it plans to resume flights to a number of European destinations by the end of next month. The company has welcomed the news that the Spanish government intends to open up to tourism from July.

• Hertz has filed for bankruptcy protection in the US.

• Various UK operators gearing up for a ‘year of staycations’.

• An additional Bank Holiday in October could add £500m to domestic spending reports the Centre for Economics and Business Research. It says that £50m could come from domestic tourism.

• Jet2 has pushed back its recommencement date from 17 June to 1 July. The company says ‘in view of the ongoing travel restrictions caused by the Covid-19 pandemic, we have taken the decision to recommence our flights and holidays programme on July 1.’

• UK booking platform eviio ha said that it sees early signs of a pick up in bookings to UK destinations. Rental properties saw the largest rise.

OTHER LEISURE:

• Time Out updated on its placing on Friday saying that it had successfully placed 128.6m shares at 35p to raise gross proceeds of £45m. CEO Julio Bruno said ‘a combination of this successful fundraising, a cost reduction programme and further strategic initiatives will support Time Out as it emerges from this period of COVID-19 led disruption with a stronger brand, a larger audience and a higher operating margin and will be well positioned to continue the successful Time Out Markets roll-out which transformed the Group in 2019.’

• Bruno says ‘consumers and chefs alike are keen to return to our Markets, which will offer an appealing proposition following the lifting of lockdown.’

FINANCE & ECONOMICS:

• The UK government borrowed £62.1bn in April, the largest monthly amount on record. This compares with £11.0bn in April last year.

• Sterling a little higher at $1.2219 and €1.1188. Oil higher at $36.26. UK 10yr gilt yield unchanged at 0.18%. World markets broadly better with London set to open up around 50pts.

START THE DAY WITH A SONG:

The song has been furloughed. See you on the other side.

RETAIL WITH NICK BUBB:

• Saturday’s Press and News (1): The big story in the Saturday papers was the Guardian/Daily Mirror scoop that the PM’s controversial adviser Dominic Cummings broke the lockdown rules at the end of March to drive to his parent’s estate in Durham and even the Daily Telegraph went with “Cummings caught in lockdown rule breach” as its front page headline. There were other stories, however: the Times ran with “Firms must start paying quarter of staff wages” and the Daily Mail called for “Corona passport to save holidays”, whilst the FT went with “Sunak pushes PM to lift lockdown”.

• Saturday’s Press and News (2): In terms of Retail news, there was plenty of coverage of the Burberry results, mostly focused on its decision to pass the final dividend (the Times’ headline was “Burberry joins modern fashion for cutting dividends”), but Lex column in the FT highlighted the recovery in domestic Chinese consumer spending and concluded that “if it can build on that, its turnaround will only be delayed, not derailed”. The FT also had an article about how Europe’s luxury capitals are having to learn to live without Chinese tourists and it carried a full-page advert from a group of premium fashion brands (notably Selfridges), under the banner #rewiringfashion, calling for a re-think on the fashion calendar and the timing of fashion shows, whilst the Daily Mail flagged the lengths that the upmarket shoe chain Kurt Geiger is going to ensure a safe environment in its shops.

• Saturday’s Press and News (3): In other news, the very weak ONS Retail Sales figures for April were also a big talking point, with the Times noting that Primark was one retailer that did zero sales last month…whilst the Business editorial in the Telegraph thundered that “Rebirth of High Street may be no bad thing”, flagging that “a reimagined High Street can emerge from the rubble, replacing identikit town centres teeming with pound stores, payday loan providers and bookmakers”. The Guardian had an interesting feature article on how bike shops are suddenly booming (“Two wheels good: Bike shops reveal bumper trade as UK takes to cycling”). And the Times flagged that a Hong Kong department store/property group called Lifestyle International Holdings has bought a £50m stake in the UK property group Land Secs.  

• Saturday’s Press and News (4): In terms of comment etc, our eye was drawn to the Business editorial in the Times about the latest Government spending splurge, which noted that the Government debt-to-GDP ratio will soon pass the symbolic 100% level and concluded that “only the fact that every other rich nation is resorting to similar tactics has prevented a full-on sterling crisis”. And the stockmarket reporter of the FT, Bryce Elder, penned a very interesting column about how the “Gap between retail winners and losers has widened to a chasm”, highlighting the huge gap between the ratings of Games Workshop and Boohoo at one end and M&S and Dixons Carphone at the other, concluding that “if the future comes to resemble the past, current valuations on both ends of the scale will look very silly”. Finally, the Telegraph magazine had an amusing piece by the Technology correspondent Harry
de Quetteville on “What will life look like a year from today?”, including this gem “…I spotted something in the John Lewis store’s closing-down-Sale to give my wife for our anniversary. Need to reserve it to pick up later, Click and Collect, that was going to be the saviour of bricks-and-mortar retail. Consolidation and closure, it turned into. It was shock enough when M&S stores closed. At least they had their Ocado deal to keep them going Online. Peter Jones on Sloane Square is staying open. For now”.

• Sunday’s Press and News (1): The front pages of the Sunday papers were again dominated by the row about the way in which the PM’s increasingly reviled adviser Dominic Cummings broke the lockdown rules: the Observer flagged “Fresh claims that Cummings broke lockdown rules”, but the Sunday Telegraph went with “Cummings denies fresh claims that he broke lockdown rules as row engulfs No 10” and the Sunday Times ran with “Johnson refuses to throw his top aide “to the dogs””,  whilst the Mail on Sunday headline was “Boris: It’s not like he was visiting his lover”…

• Sunday’s Press and News (2): In terms of Business news, the main headlines were sobering: the Sunday Times Business section went with “Britain “at risk of five-year jobs hell””, noting warnings from economists that unemployment could top 10% for the next 5 years, whilst the Sunday Telegraph Business section went with “Johnson told to build “air bridges” to fuel recovery”. In terms of Retail news, there wasn’t much to report, although the Sunday Times stretched the closure of the Diane von Furstenberg store in Mayfair into an article headlined “Luxury brands left tattered by lockdown” and the Mail on Sunday stretched a memo from M&S Food boss Stuart Machin about the importance of getting the Ocado launch right into the headline “M&S boss warns staff on Ocado deal”. The Mail on Sunday also had a Business article headlined “Return of grocers and butchers to our High Streets”,
whilst the Sunday Telegraph had a feature interview with the boss of the Canadian ecommerce firm Shopify, Tobi Lutke, noting the recent move into home delivery logistics and quoting him saying that “The way we think about it is that Amazon is trying to build an empire and we’re an army of rebels”.

• Sunday’s Press and News (3): In terms of all the comment columns in the Sunday papers, there were plenty of worthy articles, but we would, as usual, highlight the thoughtful column by the Sunday Times Economics correspondent David Smith (“Signs of life are flickering in our lockdown economy”), in which he noted that “Last month was always likely to be the nadir of the global recession”, as well as the column by the Business Editor of the Sunday Times, Oliver Shah (“The other shoe drops”), in which he flagged that the struggling shoe firm Clarks is set to close most of its 100 full-price stores in the US, thundering that “disengaged shareholders and management teams without a connection to the ownership can result in strategic drift”.

• Bank Holiday Monday Press (1): The front pages of today’s papers were again dominated by the row about the PM’s defence of the way in which his highly valued adviser Dominic Cummings broke the lockdown rules: the Guardian headline was “No apology, no explanation: PM bets all on Cummings”, whilst the Times went with “Cummings acted like any father, insists PM” and the Telegraph, loyally, ran with “”He has acted responsibly, legally and with integrity””, but the big development was that the PM lost the support of the Daily Mail, which called for Cummings to be sacked “for the good of the Government and the nation”, flagging that the whole of the country is asking “What planet are they on?”…

• Bank Holiday Monday Press (2): In terms of Retail news, the cupboard was pretty bare, with the Guardian flagging that Tesco is selling white eggs for the first time in 40 years, but the Daily Mail flagged that M&S boss Steve Rowe has at last decided to give up his annual Bonus. In terms of comments, the Economics correspondent of the Guardian penned a gloomy column headlined “Most ingredients are in place for a property crash later this year”, whilst the Times had a column by the chief economist of KPMG headlined “City centres, deserted during the pandemic, might never be the same”. Finally, the regular column by John Timpson in the Telegraph was headlined “The pandemic can’t be put back in its box, so retailers must deal with the new normal” and he advised retailers to celebrate the improvement in LFL weekly sales “from today’s dreadful starting point through “disastrous” (minus
60%) and “desperate” (minus 45%) to “unacceptable” (minus 30%), until, by September, you are pleased to reach “disappointing” (minus 20%) and eventually “mediocre” (minus 10%)”…

• Today’s News: The Motor dealers are being allowed by the Government to reopen on June 1st, given their outdoor space, and Marshall Motors (which has a market cap of £80m) has been the first off the blocks with an announcement this morning to welcome the news and say that it will be back in business. Disappointingly, other “non-essential” retailers won’t be reopening until June 15th, but the sofa and carpet retailer ScS counts as a homewares retailer and it has put out an announcement to say that its 80 English stores reopened on May 23rd and that “ScS is a resilient business, with a strong balance sheet, coupled with a flexible cost base”. And the London estate agent Foxtons has announced that it will be reopening its branches this week, having suffered a 44% fall in commissions earned in the eight weeks between Monday 23 March 2020 and Friday 15 May.

• News Flow This Week: After the Bank Holiday yesterday, things are quiet on the company news front, but the latest monthly Kantar/Nielsen grocery sales figures (for the 4/12 weeks to May 16th/17th) tomorrow will be revealing and the British Land finals tomorrow will also shed some light on the troubled outlook for both retail and office property. The delayed Ted Baker finals are also due this week, but there is still no confirmed date and another delay would not be surprising. And with the end of the month coming up quickly now, tomorrow also brings the CBI Distributive Trades survey for “May”, for what it’s worth.