This week's retail news 'you may have missed'.....
At mdj2, we’re passionate about retail and always looking to share our news, views and insights. With so much information out there, we wanted to share just a small selection of retail news headlines from last week that we found interesting…??
Clintons looks to close a fifth of its stores to avoid going bust.
Clintons is looking to close around a fifth of its stores in order to stave off insolvency.
The card retailer has brought in restructuring advisers to work on a debt-for-equity swap as it faces “acute financial distress”.
Part of the plans could see it close 38 stores. This is on top of the?156 shops it closed back in December 2019 as part of a pre-pack administration, when its previous owner, the Weiss family that owns US giant American Greetings, snapped it back up.
Despite the store closures, Clintons struggled to rebuild its finances, even after it cut costs and explored a merger with Paperchase in December 2022.
The merger never got off the ground and?Paperchase plunged into administration?in January this year and its intellectual property and brand was then?snapped up by Tesco.
According to documents seen by?The Times, Clintons’ store closure plan has been designed to “avoid insolvency and be rescued as a going concern” and that the retailer “will have no option but to commence formal insolvency proceedings” if it does not secure a deal.
The news comes after budget retailer?Wilko has found itself on the brink of collapse, putting 12,000 jobs at risk.
The business, which trades from 400 stores, is one of the biggest privately owned retailers in Britain.
Wilko buyer needs to pump in ￡70m as rescue talks continue.
Potential buyers of stricken retailer Wilko will have to invest up to ￡70m to rescue the retailer.
PwC, the discount chain’s advisors, is in talks with a rival discount retailer and two private equity firms as it seeks to find a buyer so Wilko can avoid collapse,?The Sunday Times reported.
Mike Ashley’s Frasers Group and Hilco –?a lender to Wilko?– are not in talks to buy the firm.?
The ￡70m needed to be invested raises questions whether it will be possible to secure a solvent sale of the business.
Around ￡25m to ￡30m of the funds is needed to get stock flowing through to Wilko’s stores and an additional ￡40m to pay off debts to Hilco, although the firm is willing to continue lending to the retailer.
Wilko?filed a notice of intention to appoint administrators?this week. The retailer was already looking for a buyer and had received a “significant level of interest, including indicative offers that we believe would meet all our financial criteria to recapitalise the business”, according to CEO Mark Jackson.
It is continuing talks and Jackson urged interested parties to “move as fast as possible” in order to secure a solvent sale.
Tesco becomes first supermarket to offer right to request flexible working.
Tesco?is granting colleagues new flexible working rights almost a year ahead of an expected change in the law from the government.
The supermarket is giving its more than 300,000 colleagues, from the shop floor to its offices, the right to request a flexible working pattern from their first day in the job, rather than having to wait six months under current employment law.
Tesco?said this move demonstrates its commitment to embracing a flexible approach to working patterns to help workers achieve a successful work life balance.
The grocer already has a large proportion of colleagues who work part-time and has introduced a new requirement that all full-time advertised positions will be available as flexible or full-time and across all roles a range of different part-time or flexible working options can be discussed.?
The government is expected to change the rules around flexibility in Spring 2024, introducing the right to request flexible working from day one. As a responsible employer,?Tesco?has decided to reflect the government’s aim immediately, to support the different needs of colleagues.?
To ensure colleagues have certainty as well as flexibility, the grocer is also the only major UK supermarket that contractually guarantees colleagues a minimum of 16 hours a week to new recruits and the right to request a contract that reflects their actual working hours if they work regular overtime.?
Store manager Mel Gutteridge said: “For me flexibility has allowed me to progress and work my way up to store manager while navigating family life. By working part-time I can find the right balance between time spent at home with my family and time spent on my personal development and career progression.”
The new right is the latest development from Tesco to boost its employment offer to existing colleagues and new recruits. Earlier this month, it announced a new benefit for colleagues and their immediate family – unlimited appointments with a virtual GP, seven days a week to give them added flexibility in managing their health.
This expanded focus on colleague wellbeing comes after Tesco made its biggest-ever investment in colleague pay over the past year, with an increase totalling a more than 15% pay rise to bring the hourly rate to ￡11.02. Tesco also gives colleagues a 10% discount on groceries, which increases to 15% every pay day weekend.
James Goodman, Tesco UK people director, said: “We think giving people the right to start a conversation about flexible working from their first day, or even before they start work for Tesco, is the right thing to do to give colleagues the opportunity for a healthy work-life balance.
“We aim to create a positive culture at Tesco where managers will do as much as they can to facilitate these requests for flexibility.”
Superdry secures ￡25m Hilco funding.
Superdry has secured an asset-based lending facility of up to ￡25m with Hilco Capital as the retailer continues its cost-cutting programme.
The facility with Hilco has been agreed at an interest rate of 10.5% plus the Bank of England base rate – currently at 5.25% – on the drawn element. It will last 12 months with the option to extend.
The retailer said the Hilco funding will help drive its turnaround and cost-cutting plans. In April, Superdry said it would introduce ￡35m of?cost savings?as part of a turnaround plan that would involve estate optimisation, logistics savings, better procurement and range reduction.
The agreement is in addition to its existing ￡80m asset-backed lending facility with Bantry Bay Capital, which?it agreed in December. The loan facility with Bantry Bay included a ￡30m term loan, for three years with an option to extend for one further year.
The retailer raised ￡11.1m in a share placing in May aimed at injecting liquidity back into the troubled business.