Top News Stories ~ 8th – 14th February 2021

1. UK HITS VACCINATION TARGET

The UK government has reached its target of vaccinating 15 million people who are in the top four priority groups.

Around 67 million people currently reside in the UK, meaning just under a quarter of the population has now received a dose since the first one was given on 8th December 2020. Boris Johnson has recognised this as a “significant milestone in the United Kingdom’s national vaccination programme”.

It adds to the positive news from Friday when it was confirmed the coronavirus reproduction number, or R value, had fallen below 1 for the first time since July.

NHS chief executive Sir Simon Stevens said: “Hitting this milestone just 10 weeks after the NHS made history by delivering the first Covid vaccination outside of a clinical trial is a remarkable shared achievement”. NHS England said people aged 65-69 can now be vaccinated if GPs have supplies.

Dominic Raab guarantees all restrictions set out in law will be lifted by end of April. He insists that there will be no justifications for the lockdown once all vulnerable groups vaccinated.

THOUGHTS AND IMPLICATIONS

Ministers have subsequently said that the aim was to complete all nine of the top priority groups, which comprise phase 1 of the vaccination programme, by early May. Whether the UK will keep up the speed it has been vaccinating at is unknown.

To further reduce the chances transmission of Covid variants, those arriving in England from 33 countries need to quarantine for 14 days. Downing Street has said it can add extra hotel rooms for quarantine “as required”, after signing contracts for 4,600 rooms so far. Hopefully, this will significantly control the spread of the virus.

Photo by Steven Cornfield on Unsplash

2. MASTERCARD TO SUPPORT CRYPTOCURRENCY

Mastercard has announced its support for crypto-currency as it will enable its one billion users to spend crypto-currencies at more than 30 million businesses this year.

The global payments firm believes that supporting crypto-currencies could encourage old and new customers to use businesses who accept it. The firm said: “We are here to enable customers, merchants and businesses to move digital value — traditional or crypto — however they want. It should be your choice, it’s your money.”

This will be the first time that cryptocurrencies will move through the company’s platform. Though, Mastercard has previously partnered with crypto firms Wirex and BitPay in order to allow people to use their cryptocurrency holdings for transactions.

MasterCard’s announcement is the latest of a series of institutional adoption of cryptocurrencies that have come in the last few weeks. Bank of New York Mellon has said its asset management clients will be able to hold, transfer and issue cryptocurrency using their accounts. This is the first major Wall Street bank to provide clients services for cryptocurrencies. In addition, last week Tesla announced a purchase of $1.5 billion Bitcoin from its cash reserve adding that it will soon accept Bitcoin payments for its cars. PayPal doubled down on crypto announcing that it will offer crypto payments for its 26 million merchants after its limited crypto trading services “exceeded expectations.”

All the news this week saw Bitcoin rise to fresh highs by the weekend after Elon Musk described Bitcoin as “a good thing”.

THOUGHTS AND IMPLICATIONS

This movement toward cryptocurrency highlights how companies must quickly adopt new trends and technologies.

Many have warned people to be careful before considering investing their savings in bitcoin. Andrew Bailey, the governor of the Bank of England, is sceptic about the digital currency. He told a committee of MPs on Monday that bitcoin has “no intrinsic value at all”. He said: “I’ve said a number of times, ‘Only buy bitcoin if you’re prepared to lose all your money.’ It doesn’t mean you will lose all your money, it doesn’t mean the value will go to nothing, but it has no intrinsic value … People may want it, they may want to collect it, but it doesn’t have any intrinsic value at all.”

3. Biden ‘pauses’ TikTok and WeChat bans

President Joe Biden has paused legal action against TikTok and WeChat. This delay means both apps can continue to operate in the US while new staff at government agencies “become familiar with the issues in this case”.

Former President Donald Trump had sought to ban both apps on claims that they were a “threat to national security, foreign policy and economy of the United States”. Both companies had taken legal action against the proposed bans by Trump.

Some experts believe that TikTok is indeed a national security threat. In January, a team of security researchers announced they had found many vulnerabilities in TikTok. These flaws could have let attackers gain control of TikTok accounts, change the privacy settings on TikTok videos, upload videos without permission, and obtain user data such as email addresses.

Messaging app WeChat has more than one billion users worldwide, but says the US only accounts for 2% of its revenue.

TikToK, the popular video-sharing app, has around 800 million users worldwide, of which 100 million are in the US.

Reports have suggested the deal could be cancelled if the Biden administration adopts a softer approach towards Chinese apps.

4. BOOHOO BUYS MORE BRANDS

Boohoo has bought the remaining Arcadia brands of Dorothy Perkins, Wallis and Burton for £25.2 million. As Boohoo did with Debenhams, Oasis and Warehouse, they will only buy the online business and brands of the companies and not the physical stores which, again, puts around 2,450 jobs at risk as 214 stores close.

Competitor ASOS followed the same procedure, only buying the online businesses and brands of Arcadia Group’s Topman, Topshop, Miss Selfridge and HIIT.

The only jobs that remain safe are those primarily in the brand design, buying and merchandising and the digital part of the business. Out of the 13,000 people that were employed by Arcadia, approximately only 260 people will be moving with the brands to Boohoo,

Since Boohoo was found to be paying workers less than minimum wage last year at one of its warehouses operated by a subcontractor of Boohoo’s contracted supplier, Boohoo is now working to improve its damaged image by introducing new requirements for the suppliers, such as its suppliers cannot use any third-party subcontractors for clothes productions from 5th March.

THOUGHTS AND IMPLICATIONS

This leaves a big hole on British high streets, one that will take a long time to be filled. Councils must now think how they can revitalise their high streets. Whether councils try to lure more retailers to fill the empty shops and stores or something else such as flats or wholesale reinvention is the vital question.

In Stockton-on-Tees a 1970s shopping centre will be bulldozed next year to make way for a park. This may start a trend.

Photo: PA MEDIA

5. Huawei takes HSBC to court

Huawei, the Chinese telecom giant, is taking HSBC to court in the UK as part of its attempt to prevent the extradition of its chief financial officer from Canada to the US.

Meng Wanzhou, the daughter of Hauwai’s founder, was arrested in Canada in 2018 on a US request over claims she had misled HSBC in a 2013 meeting over the true nature of Huawei’s relationship with Skycom. These are linked to the alleged violation of US sanctions against Iran, allegations she denies.

Huawei now hopes to gain access to HSBC documents that could help it undermine the US case for her extradition. The bank told the BBC the application for disclosure was “without merit”.

THOUGHTS AND IMPLICATIONS

The case has placed HSBC in a difficult position. In China there has been criticism for it having handed over information to US authorities which led to Ms Meng’s arrest. The bank has always maintained it simply handed over what it was required to under law.

It has also come under fire in the UK from those who believe it has been too friendly with Beijing, pointing to the freezing of the bank accounts of a Hong Kong activist which led to the questioning of company executives by a parliamentary committee recently.

Photo: AP Photo/Andy Wong

6. SECOND TRUMP IMPEACHMENT TRIAL ENDS WITHOUT CONVICTION

After only 5 days since it began, the US Senate has fallen short of the two-thirds majority needed to convict former President Donald Trump on a charge of incitement to insurrection over the Capitol riot on 6 January. They were only 10 votes short of the 67 required for conviction. A year ago, only one Republican senator – Mitt Romney of Utah – voted to convict Trump. This time, he was joined by six others.

However, Trump may still be liable in court.

President Joe Biden said: “While the final vote did not lead to a conviction, the substance of the charge is not in dispute. This sad chapter in our history has reminded us that democracy is fragile. That it must always be defended. That we must be ever vigilant. That violence and extremism has no place in America. And that each of us has a duty and responsibility as Americans, and especially as leaders, to defend the truth and to defeat the lies.”

THOUGHTS AND IMPLICATIONS

This is, at a very basic level a win for Trump. He can still run again for President in 2024 if he chooses to do so.

Trumps behaviour and his claims of voter fraud are thought to be one of the main vehicles that caused the riots that occurred in the US Capitol. But, others believe that it is not only Trumps behaviour that caused these riots. A Democratic former secretary of housing and urban development and 2020 presidential candidate stated that ““This is the result of leaders in the Republican party fueling conspiracy, division and hatred for years. And it won’t be fixed until they lose their office.”

Nonetheless, what remains clear is that if those in power are able to get away with fuelling conspiracy, hatred and division, people will only deem this behaviour acceptable.

7. DISNEY+ USERS SOAR

Since its release in November 2019, Disney+ has secured around 94.9 million paid subscribers, according to its most recent quarterly report.

With lockdowns and restrictions still being implemented globally, people are spending more time behind their screens. Therefore it is now surprise that Disney saw a rise in revenues from other services including ESPN+ and Hulu. As of February 2020, Disney had set a goal of targeting between 60 and 90 million subscribers within the next 4 years. It has now surpassed this target within the first 18 months.

Netflix is another company that has come out on top from lockdown measures, boasting 200 million subscribers by the end of 2020.

Photo by Mika Baumeister on Unsplash

8. ARCADIA ASSET SALE GIVES HOPE

Trustees have announced that they had realised £173m via the sale of assets since the company failed. It is however on course to remain independent of the pensions lifeboat – which protects people with a defined benefit pension when an employer becomes insolvent.

Thousands of workers who were saving their pensions with the Arcadia Group have now been offered fresh hope they will recover more from their savings.

The proceeds stem from the sale of Acadia’s Topshop brand to ASOS by administrators and a number of their property sales.

Arcadia’s pension scheme was given security over £210 million of assets. However, it is thought the amount raised will not be enough to completely wipe out the scheme’s deficit, which is still being assessed by trustees. The deficit is estimated to stand at about £300 million. The scheme is being assessed by the Pensions Protection Fund (PPF) – the industry lifeboat scheme – after Arcadia fell into administration in November.

9. PREZZO TO SHUT 22 RESTAURANTS

Prezzo, the Italian chain, will permanently close 22 out of its 178 restaurants after being bought out of pre-pack administration by private equity firm Cain international. Cain said that 216 of its 2,900 jobs would be lost.

It was reported earlier this week that Cain was considering putting the restaurant group through an insolvency process.

When it bought the brand, the firm said that it would support Prezzo’s ambition to become the “UK’s favourite Italian” and help reinvigorate high streets as they begin to recover from the Covid-19 crisis. Prezzo first put itself up for sale back in July in response to the impact of the first coronavirus lockdown.

Jonathan Goldstein, chief executive of Cain International, stated: “We firmly believe that strong hospitality businesses, such as Prezzo, have a bright future and will play an essential role in reviving the UK economy. However, to do so, we must get through this current crisis of mounting liabilities and no revenues”.

As of last week, Prezzo’s restaurants had been able to operate for just 25 weeks out of the previous 52 weeks but with fixed costs and rent accumulating.

10. BUMBLE SHARES SOAR

Dating app company Bumble got a positive reaction from investors in its $2 billion IPO last week. Shares have soared by more than 76% in its stock market debut in New York, giving the company almost a $14bn (£10bn) valuation. $2.2 billion was raised and this will be used to pay down debt and repurchase shares from pre-IPO investors.

Despite posting profits of $85 million in 2019, Bumble posted a $117 million loss in the first nine months of 2020, on revenues of $417m as revenue growth slowed. The company said transaction costs factored into the losses.

As of the third quarter of 2020, it boasted nearly 42 million active users. Bumble can now become a member of a small but growing list of female-founded companies to IPO, which already includes Stitch Fix founder Katrina Lake and the RealReal’s Julie Wainwright. Bumble made history in the dating world for its female-focused algorithm that defies traditional gender norms and puts women in a position of power.

In 2018, a court battle took place after Bumble rejected a $450m acquisition offer from Match. Match had filed a lawsuit against Bumble, alleging intellectual property infringement. But Bumble counter-sued two weeks later, accusing Match of fraud and trade secrets theft. Both lawsuits were later dropped that same year.

THOUGHTS AND IMPLICATIONS

This could trigger a closer battle between Bumble and Match Group in the online dating industry. Match Group owns Tinder, Match.com and OkCupid. Bumble however differs from the rest of the dating apps as women must initiate contact men first, which has allowed it to carve out its own niche.

There are now more than 20 female founders to take companies public, but the venture capital and IPO market have a long way to go, as funding to women-led start-ups hit a three-year low in 2020.

Photograph: Mike Segar/Reuters

Thanks for reading! If you’re wondering how you can stay commercially aware, check out my blog post ‘How to Be Commercially Aware’.

*Disclaimer – All views expressed on this site are my own and do not represent the opinions of any entity whatsoever with which I have been, am now, or will be affiliated. All information provided aims to educate and has been cross-checked for accuracy, but this site accepts no responsibility for any discrepancies.

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A future trainee solicitor encouraging and supporting social mobility, and showing you anything is possible.

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