Morning Business news roundup from around the web…
(Reuters) – Bankrupt Toys ‘R’ Us Inc is preparing to sell or close all 885 stores in its U.S. chain, risking up to 33,000 jobs, after failing to reach a deal to restructure billions of dollars in debt, a person familiar with the matter said on Wednesday. People pass […]
Some MPs and lawyers have called for a blanket ban on unpaid shift work. Companies can currently invite prospective employees to do trial shifts with the carrot of a job at the end. But there has been a six-fold increase over three years in complaints over unpaid shifts, trade union Unite said. The Federation of Small Businesses said unpaid shifts are a valuable part of the recruitment process, but shouldn’t cross the line into exploitation. On Friday a private members bill which seeks to make unpaid trials illegal will get its second parliamentary reading.
The future of 1p and 2p coins may be in doubt – but it seems their use goes way beyond simply paying for things. Treasury officials are seeking views on the future mix of UK notes and coins as we increasingly move towards digital and mobile payments. It conjures up the image of people throwing their smartphones, rather than coppers, into a fountain for good luck – although Downing Street has backed away from a plan to scrap copper coins. According to BBC News readers, viewers and listeners there are many other uses for these coins, from home improvements to baking. Here is a selection.
Max Riedel has just admitted to losing hundreds of thousands of euros before the age of 30, and he is being enthusiastically applauded. The Berlin-born business owner is addressing an unusual audience – young techies gathered on a Thursday night to celebrate catastrophe. With the help of an amusing slideshow, featuring wisdom from TV’s The A-Team, Max tells the tale of multiple blunders made in the early days of his events company, Holi Concept, which runs festivals and races in cities across Europe.
“In the last four or five years, I think I made 20 or 25 hard mistakes,” he says, barely suppressing a cheeky grin.
“Every mistake cost between 50,000 and 300,000 euros.”
Stories like Max’s are at the core of a worldwide movement – with an unprintable name that loosely correlates with “Failure Nights” – designed to help those involved in young firms and start-ups learn from each others’ mistakes. Founded in Mexico, the group has chapters in over 250 cities across 80 different countries, including China, India, the UK, and the US.
(Reuters) – Online platforms such as Google (GOOGL.O), Apple (AAPL.O) and Amazon (AMZN.O) face new European Union rules on their commercial practices with smaller businesses that use their services, as Brussels seeks to curtail their huge market power. The European Commission is drafting a new regulation specifically targeting online platforms such as e-commerce sites, app stores and search engines that will require the companies to be more transparent about how they rank search results and why they delist some services. The proposal seeks to address potentially harmful trading practices by online platforms and a lack of effective redress mechanisms for smaller businesses that use them to reach consumers.
“Online intermediation services can hold superior bargaining power over their business users, enabling them to behave unilaterally in a way that is capable of harming the businesses using them,” the draft regulation, seen by Reuters, says.
Tech companies have faced significant regulatory pressure from Brussels, be it over their handling of swathes of user data, how much they pay in taxes or the proliferation of extremist content on social media. The proposal was initially meant to exclude search engines such as Alphabet Inc’s Google and Microsoft’s Bing (MSFT.O), but these will now be included given the impact a business’s ranking in search results can have on its revenues. The Google logo is seen at the “Station F” start up campus in Paris, France, February 15, 2018. REUTERS/Benoit Tessier
The EU’s antitrust chief in June hit Google with a record 2.42 billion euro ($2.99 billion) fine for favoring its own shopping service over those of rivals. Under the proposal, operators of search engines, app stores as well as e-commerce sites such as eBay (EBAY.O) will have to specify upfront the “most important parameters determining ranking”, such as “specific signals incorporated into algorithms” and adjustment or demotion mechanisms. The proposal will not force companies to disclose their algorithms but just provide descriptions at a general level explaining “how and to what extent the relevant ranking mechanism takes account of the quality of the products and services offered”.
Online platforms will also have to implement a notice period of at least 15 days for changes to their terms and conditions as well as provide businesses with an “individualized” description of the reasons for which they have been de-listed or suspended – for example from Apple’s App Store or Google Play.
The owner of the Bargain Booze and Wine Rack chains has revealed an unexpected £30m tax bill that must be paid by the end of this month. Conviviality, which is also a drinks wholesaler, said it first discovered on Tuesday that the amount was owed. Shares in the company were suspended on AIM ahead of Wednesday’s announcement. Last week, Conviviality cut its annual profits forecast by a fifth and said the tax bill may cut profits still further.
Profits are now likely to be about £55m rather than £70m. Analysts at Shore Capital said: “We are baffled as to how the company had not taken this [tax] payment into account, given the close proximity of the due date and the materiality of the amount due. We are no tax experts, but it looks like it relates to more than corporation tax given the corporation tax charge and tax paid in 2017 was £6.1m and £8.3m respectively.”
A 41% jump in online sales for the owner of Zara helped drive higher sales and profits last year. Inditex, which also owns brands including Pull & Bear, Bershka and Massimo Dutti, said a tenth of its sales were online in 2017. It was the first the time Spanish company has broken out figures for online sales.
Like-for-like sales, which excludes new store openings, rose 5%, while net sales were up 9%. Net profits were 7% higher at €3.37bn on revenues of €25.34bn. Its 88,000 staff worldwide will share a €562m (£499m) bonus pool. The 10% figure for online sales is not far behind the 12% for Swedish rival H&M, but is far lower than the 40% for the UK clothing chain Next. Inditex chief executive Pablo Isla said it had been a year of “solid growth”, with recent investment in technology and logistics leaving the company well placed for continued progress.
Britain’s biggest construction firm, Balfour Beatty, has posted a big jump in annual profit as its turnaround continues. The company behind Crossrail made a £117m pre-tax profit in 2017, up from just £10m the previous year. The rise follows several years of big losses after Balfour’s business became overly complex. Chief executive Leo Quinn said it had only narrowly avoided the fate of rival Carillion by reforming its business.
Carillion, the construction outsourcing giant, fell into administration in January under under a debt pile of £1.5bn. Mr Quinn told BBC Radio 4’s Today programme: “We had our own near-death experience three years ago – eight profit warnings, £600m cash outflow in nine months from the company. “These results today demonstrate an amazing transformation and turnaround.” In the year to 31 December, Balfour’s underlying profits doubled to £196m, although revenue fell slightly to £6.9bn.
The UK’s fourth-biggest supermarket chain Morrisons has announced an 11% jump in full-year profits as it continues its turnaround programme. The chain said it made underlying profits of £374m in the year to 4 February, up from £337m in 2016. Like-for-like sales excluding fuel, which strip out stores open for less than a year, were up 2.8%. The company said performance was “strong” despite the “challenges” of higher import costs..
Revenues rose by 5.8% to £17.3bn, up from £16.3bn. Chairman Andrew Higginson said Morrisons was now entering its third consecutive year of growth. The retailer also said it was “confident that a broader, stronger” Morrisons would continue to grow.