April, good month/bad month
Retail Technology Innovation Hub looks back on an eventful April and rounds up the winners and losers
Good month for…
Boohoo reported a 97% rise in revenue to £579.8 million in the year to March, with pre-tax profit up 40% to £43.3 million. The recently acquired Pretty Little Thing played a key role here, registering a 228% rise in sales to £181.3 million.
Tesco reported that its mobile payments app, Tesco Pay+, has reached 500,000 downloads following its relaunch in September last year.
Blockchain payments venture, BitPay, closed a $40 million Series B funding round, bringing its total raised capital to over $70 million.
Argos is set to grow its technology team, adding 150 new roles, most of which will be based at its London Victoria tech hub.
Westfield reported that 940,000-plus shoppers visited Westfield London and Stratford City over the Easter bank holiday weekend, an overall increase of 18% on 2017.
Asos posted a 10% rise in half-year profits to £29.9 million. It also reported retail sales of £1.13 billion for the six months to 28th February, up 27% compared to the same period in the previous year. Whilst its site attracted more than a billion visits for the first time.
Tesco reported pre-tax profits of £1.3 billion for the year to 24th February, up from £145 million for the previous year as UK sales rose 2.2%.
Amazon boss Jeff Bezos took a sideswipe at Donald Trump, after the US President attacked the e-commerce giant on Twitter.
In a tweet praising journalists at The Washington Post, which he bought in 2013, Bezos said: ‘Great reporting requires patience, grit and a willingness to follow a story wherever it leads, whether Alabama or Moscow. Proud of @washingtonpost #Pulitzer winners! And big congrats to the @nytimes, as well! #DemocracyDiesInDarkness’.
He was referring to the newspaper winning the 2018 Pulitzer Prize for investigative reporting for revelations about US Senate candidate Roy Moore and sharing the 2018 Pulitzer Prize for national reporting on Russia’s interference in the 2016 election.
Trump has previously hit out at The Washington Post, labelling it the Amazon Washington Post. Meanwhile, last month he tweeted: ‘I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!’
This closely followed publication of an article on the Axios website. Citing five different sources, it claimed that, whilst Capitol Hill was gunning for Facebook, Trump’s thoughts were elsewhere. “He has talked about changing Amazon's tax treatment because he’s worried about mom-and-pop retailers being put out of business,” the report stated. “A source who’s spoken to POTUS says: ‘He’s wondered aloud if there may be any way to go after Amazon with antitrust or competition law’…Trump's wealthy friends tell him Amazon is destroying their businesses."
Primark solidified its position as the bricks and mortar retailer defying current convention that online is the answer to all woes, according to Catherine Shuttleworth, CEO and Founder, Savvy Marketing.
Bad month for…
Poundworld employees…The owner of discount retailer Poundworld, American private equity firm TPG Capital, is gearing up to announce a Company Voluntary Arrangement (CVA). This could see it axe up to 100 of its 355 stores, with hundreds of jobs being lost as a result, sources close to Poundworld claim.
Bricks and mortar retailers…80,000 more retail stores could close by 2025, according to a report from UBS.
Disgruntled John Lewis shoppers took to social media after a customer service meltdown at its home furnishings division.
The retailer has restructured the division, claiming it would ‘improve the customer experience, resulting in a more efficient way of operating’. Instead of being able to contact stores directly about an order, customers now call a Central Administration Hub. Together with changes to the catering division, the move led to a loss of 387 jobs. John Lewis is now recruiting 70 new partners to address problems that have arisen.
One customer said on Twitter: ‘16min on hold 2 furnishing team, 3wks of no replies to emails, 6mths waiting for curtains and £6k paid WHERE R MY CURTAINS?’ Another fumed: ‘I have been speaking with customer services and your delivery team and they seem to contradict themselves in every call I make. It’s rather embarrassing for a company who charges outrageous prices and always thrives on their customer service.’
John Lewis told The Mail on Sunday that “this falls below the high customer service standards we set ourselves” and said it was working hard to solve the problems and return to normal servicing times. “We apologise to our customers at this time while delays are ongoing,” it added.
Amazon UK came under fire this month for selling "disgusting" child sex dolls.
House of Fraser is looking at options for accelerating a restructuring initiative, threatening hundreds of jobs and fuelling expectations of store closures.
According to a report by Sky News, KPMG has been asked by the department store chain, which is controlled by China's Sanpower Group, to explore the possibility of a Company Voluntary Arrangement (CVA), months after it informally asked store landlords to agree to big rent cuts.
“The news of KPMG's appointment, which is understood to have been signed off in recent days, will fuel expectations that a substantial number of HoF's 59 outlets across the UK are facing the axe,” said Sky News. “Sources close to the company said it was not certain that HoF and its shareholders would pursue a CVA but conceded that one was a possibility.”
The jury’s out on…
Shop Direct is to close distribution centres in Shaw, Little Hulton and Raven, Greater Manchester, putting nearly 2,000 jobs under threat. The news came alongside the online retailer announcing an automated, 500,000 square foot distribution and returns centre in the East Midlands
JD Wetherspoon has closed down its Twitter, Instagram and Facebook pages.
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