1. Thornton’s to close doors
Chocolate maker Thornton’s have announced that none of its stores will reopen after lockdown restrictions are eased next month. This decision will put 600 jobs at risk and see 31 shops close their doors.
Thorton’s began in 1911. It is believed that the company began to struggle against competition when new businesses entered the market in the early 2000s, such as Hotel Chocolat.
Italian food giant Ferrero bought Thornton’s in 2015 for £112 million and have been trying to turn it around ever since. But, over the last five years, it’s shrunk from 252 to 61 stores. Now, the brand believes that Thornton’s future is online and in the supermarkets.
Sales on Thornton’s own website have been up 70% over the past year. An extra £500m has been spent on chocolate in supermarkets over the last 12 months, and Briton’s have consumer over 600,000 tonnes of it, spending a total of £5bn.
Ferrero said they have invested £45m in Thorntons, including selling ice-cream and adding cafes. However, consumers have changed the way they shop, now being largely online, and Ferrero concluded that they must “change with them”.
Matthew Hopkinson, co-founder of the consultancy Didobi said “You have to understand your position as a product or brand in this new consumer world,” adding “..The problem is maintaining relevance.”
THOUGHTS AND IMPLICATIONS
Many traditional stores have been closing their doors on the high street, such as Debenham’s and Topshop, due to the online retail revolution. As companies keep adding novel features to their eCommerce and mobile shopping tools, the public is being very receptive to new ways to live simpler lives and shop more conveniently. The shift to shopping online has inevitably been sped up by the consequences of the pandemic – seeing high street stores closed for the majority of the last 12 months.
Thornton’s owner Ferrero understands that, in order to survive, they must keep up with these consumer changes.
Franchise stores are unaffected by the closures.
Thornton’s are not the only ones to close their doors, as John Lewis has announced that it would see more store closures in the coming months. John Lewis is yet to confirm which of its 42 stores will face closure.
Photograph: Matthew Taylor/Alamy
2. ASTRAZENECA VACCINE SAFE TO USE
EU countries such as Germany, Italy, Austria, France and Spain announced it would not be using the AstraZeneca vaccine after fears of blood clots. But, Europe’s medicine regulator has said that the benefits of the AstraZeneca vaccine ‘outweigh any risks’.
The European Medicines Agency said in a statement that “many thousands of people develop blood clots annually in the EU for different reasons” and that the number of incidents in vaccinated people “seems not to be higher than that seen in the general population”.
THOUGHS AND IMPLICATIONS
Downing Street have reaffirmed that the AstraZeneca jab remains “both safe and effective”, amid fears that the suspensions might lead to people refusing the vaccine, which may have vast consequences such as delayed dates of easing restrictions and more people catching the virus.
Photo: Getty Images
3. LAMBORGHINI’S PROFITS SOAR
2020 was Lamborghinis most profitable year, despite its Italian factory being closed for two months during the pandemic. Nonetheless, sales topped 1.6 billion euros. Sales were in fact slightly lower than the previous year, but Lamborghini sold more expensive, customised supercars which pushed Lamborghini’s profits higher.
Lamborghini’s new sports utility vehicle (SUV) ‘Urus’ has been hugely successful, accounting for 59% of the company’s sales worldwide last year. The carmaker, which is owned by Volkswagen, sold 7,430 cars worldwide in 2020, second only to the 8,250 it delivered in 2019.
Lamborghini have also not yet announced any plans for an electric supercar.
THOUGHTS AND IMPLICATIONS
Lamborghini must keep up with the shift to electric vehicles and the tightening of emissions regulations around the world, which could be a real challenge for them. Chief executive Stephan Winkelmann said that “…We have to anticipate also a change of mind of our customers and the enthusiasts as well. This is a very crucial moment for super sports cars, where you have to really set the marks for the future”.
Other car brands, such as luxury carmaker Bentley, has committed to being an “end-to-end carbon neutral organisation” and aims to offer only plug-in hybrid or battery cars by 2026. Similarly, Volvo cars will go fully electric by 2030, which you can read more about in a previous weekly news roundup post here.
4. £1bn plan to cut industrial carbon emissions
The Government has set out a £1bn plan to cut industrial carbon emissions by two-thirds within 15 years. The plan even involves a penalty price on carbon emissions to encourage firms to lean towards cleaner alternatives.
The Government wants firms to develop low-carbon technologies, invest in equipment that can store carbon emissions in rocks underground and perhaps most importantly: waste less energy.
Studies will be funded to design a low-carbon infrastructure using hydrogen and carbon capture, which strips emissions from industrial exhausts.
To reduce carbon emissions from public buildings including hospitals, schools and council buildings, £932m has been directed to 429 projects across England.
Image: Getty Images
5. GOLDMAN SACHS UNDER FIRE
First-year bankers at Goldman Sachs have asked for an 80-hour week gap following an internal survey which revealed gruelling working conditions. The survey showed among 13 employees an average work week of 95 hours and sleep of just 5 hours per night.
The survey, which began circulating on social media on Wednesday, is presented on Goldman Sachs-branded slides that note they were produced within the investment banking division. It revealed that the stresses of the work were detrimental to both their physical and mental health’s. The majority of 1st year analysts feel as though they have been victims of workplace abuse and have or considered seeking help due to deteriorating mental health.
“The sleep deprivation, the treatment by senior bankers, the mental and physical stress… I’ve been through foster care and this is arguably worse,” one respondent said in the survey.
Before working for the firm, the analysts assessed their own mental health at 8.8 out of 10 and their physical health at 9 out of 10. After starting the job, they rated their mental health at 2.8 and their physical health at 2.3.
The survey recommended maximum 80-hour work weeks with no work on Saturday or after 9pm on Friday.
Goldman Sachs reported huge net revenues of £32.1bn for 2020.
THOUGHTS AND IMPLICATIONS
This highlights the detrimental effects that overworking employees can have, including mental and physical ones. More companies need a system in place that supports and protects their workers. Goldman Sachs already have a system in place to do this, but arguably it must be improved dramatically as soon as possible.
Photo: Pavlo Gonchar on SOPA Images
6. UBER DRIVERS GIVEN EMPLOYMENT BENEFITS
Uber drivers will receive employee benefits, following the Supreme Court ruling that Uber drivers are workers, not self-employed contractors. Uber’s 700,000 drivers will therefore receive a minimum of £8.72 per hour, the National Living Wage, plus holiday and pension benefits.
Despite previous beliefs, Uber has said this will not result in an increase in prices for passengers which has come as a surprise to many as a similar ruling in California subsequently saw the company elevate prices.
THOUGHTS AND IMPLICATIONS
This will be extremely beneficial to lowering the rates of poverty as drivers will have rights to minimum wage and holiday pay. James Farrar, a former Uber driver who took the case to court, explained that due to the pandemic fares were down 80% and many drivers had been struggling financially and felt ‘trapped’ in the Uber system. When Uber drivers were recognised as self-employed contractors, many were only earning £30 gross a day which was not enough to pay their costs.
The implications of the Supreme Court ruling on the gig economy are extreme. Many firms in the gig economy rely on hiring self-employed contractors to ensure they stay afloat or make a profit. As Uber drivers will be paid pensions, holiday pay and minimum wage, this will be a huge expense which gig economy firms have a trend of avoiding.
It can only be assumed that many gig economy firms will be checking their contracts with their self-employed contractors to ensure they will not be subjected to the scope of this riling.
To read more about this news development in my previous weekly news roundup, head over here.
Photo by Austin Distel on Unsplash
7. IN THE STYLE MAKES STOCK MARKET DEBUT
Online fashion retailer In The Style has launched on the London Stock Exchange’s junior alternative investment market (AIM), placing five million new shares and 24.5 million existing shares at 200p each. The move now values the retailer at £105 million after being launched in 2013 by now chief executive Adam Frisby.
“Today is a really exciting day for In The Style. Our successful admission to AIM is a milestone we are delighted to have achieved,” Frisby said.
Once admitted to the AIM, In The Style said it would have 52 million ordinary shares in issue and a free float of 44.2%.
ITS have a unique business model and have said shoppers are “increasingly returning to buy more frequently”. The company said it had an active customer base of 0.7 million people by the end of last year, which was up 61% year-on-year.
THOUGHTS AND IMPLICATIONS
This seriously highlights how online fashion retail has benefited compared to the traditional high street stores during the pandemic. ASOS, another online fashion retailer, bought only Topshop and Misselfridge’s website and brand but not physical store. Similarly, Boohoo bought Debenhams’ online website but not physical stores, seeing the end of Debenham’s on the highstreet after 223 years.
Some of the advantages of In the Style floating on the stock market include a value being given to the business, they have increased their public profile which gives reassurances to customers and suppliers, and it gives access to new capital to develop the business and grow even bigger.
However, some of the disadvantages are that the business will become vulnerable to market fluctuations including economic conditions which remain uncertain at the moment and that they will need to comply with additional regulatory requirements.
Meanwhile, Deliveroo are set to raise £1bn in London stock market float which would mean selling newly issued and existing shares from some of its current investors. The delivery group confirmed last week its intention to list its shares on the London Stock Exchange, in a process which is tipped to value the business at up to £7 billion.
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