JJB Still Struggling
Struggled sports retailer JJB Sports has warned that it is about to face some critical trading periods as it bids to get back onto steadier ground after announcing yet more big losses.
JJB have confirmed pre-tax losses of £66.5m for the six months to the end of July, up a staggering 177% compared with the same period last year.
Like-for-like sales which measures sales in stores open for more than a year also fell by 17.7% with total sales tumbling a fifth to £142.4m.
The Wigan based company boasts 195 stores and 4,500 employees. Christmas, the January sales, the 2012 Games and the European football championships have been marked as key shopping periods, success in these periods will go a long way to helping them to continue.
In March of this year, the struggling retailer avoided administration for the second time after landlords and creditors threw their support behind an emergency rescue through a second CVA.
While the multi-million pound losses have almost tripled, chief executive officer Keith Jones remained optimistic.
He said, "Despite the consumer environment being extremely challenging and expected to remain so for the foreseeable future, our re-sized store portfolio and other cost-saving initiatives have allowed us to manage the business and maintain tight financial controls.
"Our focus on people and processes is yielding early wins and with the continued hard work from colleagues across the Group, I remain confident of JJB's return to profitability and growth.
"Our turnaround plan is now firmly established in the business and good progress has been made in a number of key areas, however there is much still to do."
Jones blamed the closure of unprofitable stores and the sell-out of old and obsolete stock as the main problems behind the balance sheet.
He added, "Despite the tough trading climate, the business is in better shape than of late and has the opportunity to develop the JJB proposition into a truly authentic sports retailer over the next few years."
Olympic Village Contractor to Enter Admin
A major contractor at the London 2012 Olympic Village is to enter administration, leaving 150 jobs hanging in the balance.
Parry Bowen, which had contracts fitting the curtain walling and glazing in the Stratford base, is expected to appoint Irwin & Company on Monday.
Directors of the Staffordshire company blamed the "dreadful state of the construction market over the last couple of years".
Despite boasting substantial cash reserves two years ago the current climate gradually ate into this capital.
A statement released by the company said, "It is with great sadness and heavy hearts that the directors of Parry Bowen Limited announce that after 20 years the business has ceased trading with a view to going into administration.
"Two years ago the company had substantial cash reserves which the directors believed would see it through these difficult times.
"The dreadful state of the construction market over the last couple of years has unfortunately seen these reserves disappear as reduced margins and customers’ reluctance to pay have taken their toll.
"The directors hoped that a proposed reduction in staff would have been sufficient to see the business survive, but recent industry forecasts suggesting that there will be no imminent improvement in the outlook for the construction industry made it clear that even this action would not have been enough."
"Throughout its life Parry Bowen maintained a focus on technical expertise. The business has been an important participant in numerous prestigious projects which is testament to the skill and dedication of its workforce.
"More optimistically, the company’s state-of-the art production facility has an excellent reputation and may be attractive to potential purchasers, a matter that will pursued by the directors in conjunction with the administrator in due course."
Doubts initially surfaced about the company’s health after it sent staff home last Friday. The offices of the building cladding specialist are based at the Burntwood Business Park in Chasetown.
Retail Sales Better Than Expected
UK retail sales rose by 0.6% in September, according to the latest figures from the Office for National Statistics (ONS).
That was stronger than analysts had forecast and more than reversed a 0.4% fall in volumes in August.
The ONS also reported that sales were 0.6% higher than September last year.
A rise in laptop and computer game sales helped to boost the numbers. The ONS also said sales made over the internet continued to climb.
Non-store retailing, including online purchases, rose by 15.5% over the year as a whole.
The ONS estimates that internet sales accounted for 9.6% of all retail spending in September, excluding petrol.
Meanwhile, textile, clothing and footwear sales volumes were 2.1% lower than in the previous year, the sector's biggest annual fall since April 2008.
"That's quite bad for what they would expect that month," said ONS statistician Aileen Simkins.
"Maybe that was just the effect of the warm weather towards the end of the month, and people weren't really wanting to go out and start shopping for winter outfits yet."
UK Inflation Increases
The rate of Consumer Prices Index (CPI) inflation in the UK matched its record high in September, rising to 5.2% from 4.5% the month before.
An increase in energy costs was behind a large proportion of the rise.
The 5.2% rate is the highest CPI measure since September 2008, this puts it at its highest level since the CPI measure was introduced in 1997.
The Retail Prices Index (RPI) rose from 5.2% up to 5.6%.
The latest RPI measure is the highest annual rate since June 1991.
The Office for National Statistics, which released the data, said in a statement, "By far the largest upward pressure to the change in CPI came from increases in gas and electricity charges.
"There were also large upward pressures from air transport and communication services.
"Gas and electricity costs have risen 9.9% in the past month"
Bills for gas and are up a massive 18.3% on the year.
Transport has risen 12.8% on the year, and food was 6% higher than 12 months ago.
September's CPI measure is way ahead of the Bank of England's target rate of 2%. However, Bank governor Mervyn King still expects inflation to begin falling next year, once factors such as January's VAT rise drop out of the equation.
Personal Insolvencies Expected to Jump Up
Personal insolvencies are set to rise still further as unemployment hit 2.57m, an increase of 114,000 between June and August 2011 taking it to it’s highest level in 17 years.
One charity predicted 70,000 new cases of extreme financial hardship among the 16-24 year old bracket and that 185,000 Britons are now struggling with significant debt.
According to official figures from the Office of National Statistics, the unemployment rate hit 8.1% according to this month’s figures, marginally higher than the highest total declared in 1994.
Joanna Elson OBE, chief executive of the Money Advice Trust, said becoming unemployed is the trigger for debt problems all too often.
She explained, “Increasing levels of unemployment will undoubtedly bring greater financial hardship to homes across the UK.
“The figures show that in the three months running up to August, 114,000 people became unemployed, that’s 114,000 people for whom paying a bill has suddenly become a desperate challenge.”
Elson has called on the industry to encourage those in financial difficulty to make contact with a specialist as soon as possible.
She said, “Evidence shows that the earlier people seek advice and get started on an action plan, the better their outcome will be.”
The latest figures show that there are now 205,000 16 and 17 year olds out of work, marking a small increase of 1.5% during the period.
OFT Targets Debt Management Companies
Enforcement officers at the Office of Fair Trading (OFT) have taken action against three businesses today as part of its ongoing action in the debt management sector.
In two separate cases, the OFT revoked the licence of Prime Legal & Financial Services of Mile End, London for failing to adequately demonstrate the knowledge, experience or necessary skills required to hold a consumer credit licence.
Meanwhile, London based Money Advice Direct has been told it can no longer trade under the name ‘The UK Insolvency Helpline’ or use domains that include the word ‘helpline’ in the name because the commercial nature of the business is not clear.
North of the border, Deric Hamilton Oliver of Midlothian, Scotland, has had his application for a licence rejected after lying on this OFT application.
David Fisher, director of consumer credit at the OFT, said he expects debt management businesses to meet the standards set out in its published guidance.
He explained, “If they do not, we will take action as we have demonstrated here.
“Revised debt management guidance, which is due to be published before the end of the year, will give even greater clarity as to the standards that the OFT expects of businesses that it licenses in this sector.”
Since the OFT's compliance review a year ago, 61 businesses have had their licence revoked, or have surrendered their licence, or had an application refused.
Fuel Consumption Cut By A Staggering 1.7Bn Litres
It has been revealed that drivers in the UK are now consuming a whopping 1.7bn less in fuel than three years ago when the credit crunch began.
The AA have calculated that over 15% less fuel was bought during the opening six months of the year compared with the same period in 2008 as prices have continued to rise.
To put the drop into perspective, the AA said that 40,000 full petrol tankers would be needed to hold the extra fuel being bought in 2008. The decrease has also deprived the treasury of around £1bn in fuel duty in the first half of this year alone.
Drivers are being left with no option but to use less fuel as rising living costs generally means many are struggling to make ends meet as it is. It is also noted that business are being hit hard as well, also using far less fuel than pre-recession.
The average cost for 1 litre of petrol today is 134.9 pence compared with 106.4 pence in October 2008, a 27% increase.
One positive from the results were that emissions of exhaust fumes are now at a lower level than previously.
Tesco have reported that they believe the high fuel prices have impacted on people’s spending power this year.