JD.com to Bring More UK Brands to China with Evri Tie-Up

Being informed of what’s happening in the world of business is key to make sure you have your finger on the pulse, which is why I’ll be here every week to bring you all the latest news from the world of business with my weekly Brave Bold Brilliant business news - a great way to check in with what’s happening in the UK and globally.

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GENERAL 

Private equity dealmaking slumped 20% as UK financial services bucked trend – KPMG’s latest Mid-Market Private Equity report, looking at deals between £10m and £300m, it revealed that there had been 675 transaction throughout 2023, compared to 735 the year before. Throughout the entire market, it reported that deals had fallen even more significantly, dropping from 1,802 in 2022 to 1,451. Financial services was the sole sector to actually see an increase in investment activity, with 95 deals worth a total of £9.5bn closing last year, up 13.6% from 2022.

UK consumer confidence hits highest level in two years - UK consumer confidence rose in January and had its highest reading in over two years, as a surprise rise in inflation appeared to not rattle the public. The GfK Entertainment consumer confidence index, which measures consumers’ attitude, picked up to -19 in January, up from -22 the prior month and -24 in November. Its major purchase index – which takes the temperature on Brits likeliness to make a big purchase – also rose by three points on December’s reading and by 20 points on last year’s. 

ON THE UP 

Britvic quarterly revenue up across divisions, expects annual growth - Britvic PLC recorded a positive start to its financial year, with strong Christmas trading and rising first-quarter revenue, while expecting annual growth. The Hemel Hempstead, England-based drinks company, behind brands such as Robinsons squash and R White’s lemonade, said revenue in the first quarter that ended December 31 was £443.5m, up 8.1% from a year earlier.

Co-op unveils plans to hit 8 million members by 2030 from current 5 million - The retailer has set the target as membership numbers rose ahead of expectations, jumping nearly 15% on last year, according to the business. It is targeting a larger share of the convenience market via omnichannel growth, with plans to acquire new stores, more than double its number of new franchise stores, open 400 Nisa Retail stores, and accelerate share in the quick commerce market to over 30%.

Higher-for-longer London rents and bumped-up property prices leaves Foxtons optimistic for 2024 - Estate agents Foxtons Ltd has said rent hikes and demand for tenants to get on the property ladder helped drive its revenue to £147m for the full year. The occasionally lightning-rod high street agency said the figure was up 5% on last year and ahead of market expectations. Amid a period of high inflation, landlords have been passing on price increases to their tenants, or selling up to avoid paying high rates on their mortgage. 

WHSmith sales jump over golden quarter as travel soars - WHSmith said it was in its “strongest ever position as a global travel retailer” as sales surged over the golden quarter. Revenue for the high street and travel retailer jumped 8% in the 20 weeks to 20 January, as like-for-likes rose 5%. This was boosted by a 13% increase in sales for its travel arm helping to offset a 4% decline in its high street and online business, which the retailer said was in line with its expectations.

Profit and sales rise at LVMH in ‘record’ year - Luxury giant LVMH , which owns labels including Louis Vuitton, Christian Dior, Celine and Loewe, reported profit from recurring operations rose 8% in 2023 to €22.8bn (£19.4bn), while group share of net profit also rose 8% to €15.2bn (£12.9bn). LVMH reported revenue growth across all its categories, which include fashion and leather foods, perfumes, watches and jewellery.

Virgin Wines profit soars despite ‘challenging’ trading environment - Virgin Wines profit soared in its first half as it more than doubled margins thanks to “stringent” cost management. EBITDA was up 122% to £1.75m for the six months to 29 December as margins jumped from 2.3% to 5%. Sales for the wine retailer nudged up 2% to £34.3m, with sales to repeat customers up 5% and commercial revenue up 6.5%.

IN THE DOLDRUMS

eBay to axe 1,000 jobs as it looks to cut costs - The decision will see the online marketplace axe 9% of its full-time global workforce, according to a memo written to employees by eBay chief executive Jamie Iannone. He said: “While we are making progress against our strategy, our overall headcount and expenses have outpaced the growth of our business."

Tesla warns of 'notably lower' sales growth in 2024 - Tesla is forecasting a sharp sales slowdown this year, becoming the latest car company to warn of sagging demand. Elon Musk's electric vehicle (EV) maker said growth would be "notably lower" than in 2023, when deliveries rose 38%. The company's shares fell by almost 6% in extended trade in New York after the announcement.

Dr Martens golden quarter sales plummet 21% - Dr Martens has blamed “abnormally warm weather conditions” and ongoing issues with its US business for its plummeting sales over the golden quarter. The footwear retailer, which issued a profit warning in November, posted a 21% drop in sales to £267.1m for the three months to 31 December. This was dragged down by wholesale revenue, which plummeted 49% over the period due to “continued caution from wholesale customers resulting in a wear order book”.

Puma shares fall on weaker-than-expected earnings forecast - Puma SE fell as much as 8.4% after the German sports company said earnings this year will be weaker than expected, citing factors including the devaluation of the Argentine peso. Earnings will probably be in a range of €620m to €700m this year, the company said in a statement. That’s lower than the €784m average of analyst estimates. The German sneaker maker has struggled in the past year with tepid demand in the US, the world’s largest sports market, and slow momentum in its home European market.

Superdry losses widen, CFO quits and boss admits a ‘difficult’ period - In an update on its performance in the first half of this year, the British retailer said revenues were down 23.5% to £219.8m.  Adjusted loss before tax widened to £25.3m from £13.6m when compared with the same period the year before, and pre-tax profit sat at £3.3m up from a loss of £17.7m. Separately, the firm also announced the departure of its chief financial officer, Shaun Wills, after nearly three years at the firm. Retail veteran Giles David has been appointed Interim on an interim basis and will join the business at the end of the month, and will later join the board in April. 

Lloyds Banking Group to cut 1,600 jobs across branches in shift to online banking - The UK company said it was adapting to a shift in behaviour, with more than 21 million of its 26 million customers choosing to use its services online. But the job cuts are likely to raise concerns for the 8% of Lloyds customers – about 2 million – who exclusively rely on going into branches to manage their accounts.

Wizz Air 's Q3 loss swells on MidEast flight disruptions - Wizz Air reported a bigger third-quarter operating loss than expected, as the budget carrier grapples with engine inspections that have grounded parts of its fleet and the suspension of flights due to the Middle East conflict. The €180m ($196m) operating loss in Wizz Air's third quarter, which ended on Dec. 31, was larger than last year's third quarter loss of €155m, driven by flight cancellations. Analysts had forecast a loss of €93m, according to an LSEG (London Stock Exchange Group) poll.

Revolution Bars Group PLC warns on profits amid venue closures and cash crunch - In the face of bar closures and cash strapped youngsters ditching night outs, the nightlife operator said it now expects EBITDA to be £3-3.5m, down from a range above £5m. Shares fell over 19% as investors responded to the news. The board delivered the warning despite reporting its “best ever” Christmas following the pandemic. 

ONES TO WATCH

JD.com to bring more UK brands to China with Evri tie-up - China’s biggest online retailer’s JD.com has signed a deal with delivery firm Evri which will give UK brands greater access to its vast customer base. Evri said that the collaboration will “open doors for European brands and merchants, particularly in the UK, providing them access to JD.com’s vast customer base” of 600 million consumers in China”. Using Evri’s European delivery network, JD Logistics will offer Chinese shoppers enhanced services and offerings to European brands, including its local pick-up and warehousing in Europe.

Morrisons to sell petrol forecourts in £2.5bn deal - Grocery giant Morrisons is on the brink of sealing a £2.5bn deal with CD&R-owned Motor Fuel Group to sell its petrol forecourts. The retailer is poised to agree to a deal with its Clayton, Dubilier & Rice stablemate MFG to sell its c.340 petrol forecourt sites.

Saga plc confirms cruise partnership on the cards to tackle debt - Saga plc has confirmed plans to unlock finance through new arrangements in its cruise ship business. The heavily indebted travel and insurance firm said partnerships are being explored for the division, which Saga said is operating close to capacity due to high demand. "The board is exploring opportunities to optimise Saga's operational and strategic position in cruise,” the company said in a statement. Funding arrangements are being explored ahead of a £150m bond repayment due in May and to tackle net debt of over £650m.

Klarna IPO may happen ‘quite soon’ as New York listing tipped - Klarna Bank boss Sebastian Siemiatkowski made his clearest indication yet that the Swedish buy-now-pay-later (BNPL) heavyweight is gearing up for a debut on the US markets. “It’s very likely that this is going to happen quite soon, but there are no official dates,” he said in a Bloomberg interview.

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