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Debenhams to be wound down putting 12,000 jobs at risk – business live | Debenhams to be wound down putting 12,000 jobs at risk – business live |
(32 minutes later) | |
Rolling coverage of the latest economic and financial news, with 25,000 jobs now at risk across two UK retailers | Rolling coverage of the latest economic and financial news, with 25,000 jobs now at risk across two UK retailers |
Adrian Palmer, professor of marketing at Henley Business School, says Debenham’s collapse highlights that department stores are now being supplanted by new formats - such as ‘pop-up’ retailers as well as online specialists. | |
Andy Brian, head of retail at law firm Gordons, suggests department stores can still have a future as a ‘house of brands’, but as part of a wider digital strategy: | |
Chris Hunt, head of retail at law firm Gowling WLG, argues that Debenhams lacked the ‘brand resonance’ needed to survive this year’s retail crisis. | |
In the City, the FTSE 100 index of blue-chip shares has posted its biggest daily jump in over three weeks. | In the City, the FTSE 100 index of blue-chip shares has posted its biggest daily jump in over three weeks. |
Optimism over the global economic recovery, vaccine rollouts, and a touch of Brexit deal hopes all drove shares higher - despite the gloom in Britain’s retail sector. | Optimism over the global economic recovery, vaccine rollouts, and a touch of Brexit deal hopes all drove shares higher - despite the gloom in Britain’s retail sector. |
The FTSE 100 gained 118 points, or 1.9%, to close at 6384 -- more than recovering yesterday’s losses. That’s its best performance since Monday 9th November, when Pfizer’s vaccine trial results sent global stock markets racing higher. | The FTSE 100 gained 118 points, or 1.9%, to close at 6384 -- more than recovering yesterday’s losses. That’s its best performance since Monday 9th November, when Pfizer’s vaccine trial results sent global stock markets racing higher. |
UK housebuilders and banks - two sectors vulnerable to an economic downturn or a no-deal Brexit - led the rally, with Taylor Wimpey jumping 7.8%, Lloyds Banking Group up 7.4% and Persimmon gaining 6.9%. | UK housebuilders and banks - two sectors vulnerable to an economic downturn or a no-deal Brexit - led the rally, with Taylor Wimpey jumping 7.8%, Lloyds Banking Group up 7.4% and Persimmon gaining 6.9%. |
Other European markets posted gains, with the Stoxx 600 up 0.65%. Strong factory data from China also lifted stocks on Wall Street, where the S&P 500 and the Nasdaq are on track for record closes again. | Other European markets posted gains, with the Stoxx 600 up 0.65%. Strong factory data from China also lifted stocks on Wall Street, where the S&P 500 and the Nasdaq are on track for record closes again. |
David Madden, analyst at CMC Markets, explains: | David Madden, analyst at CMC Markets, explains: |
Heads-up: Sky’s Adam Parsons tweets that the Brexit trade talks might not have moved into the tunnel after all! | Heads-up: Sky’s Adam Parsons tweets that the Brexit trade talks might not have moved into the tunnel after all! |
The pound’s still hovering over the $1.34 mark for the first time in three months, though, suggesting optimism of a deal hasn’t faded. | The pound’s still hovering over the $1.34 mark for the first time in three months, though, suggesting optimism of a deal hasn’t faded. |
Here’s Reuters’ take on the pound’s jump: | Here’s Reuters’ take on the pound’s jump: |
More here: Sterling jumps on report Brexit negotiations have entered “tunnel” stage | More here: Sterling jumps on report Brexit negotiations have entered “tunnel” stage |
Sterling has hit a three-month high against the US dollar this evening, after a report that the UK-EU trade deal talks have entered the ‘tunnel’ stage of intensive negotiations. | Sterling has hit a three-month high against the US dollar this evening, after a report that the UK-EU trade deal talks have entered the ‘tunnel’ stage of intensive negotiations. |
The pound surged after Tom Newton Dunn, Chief Political Commentator on Times Radio tweeted that “UK-EU trade deal talks have, at long last, entered the mythical tunnel”. | The pound surged after Tom Newton Dunn, Chief Political Commentator on Times Radio tweeted that “UK-EU trade deal talks have, at long last, entered the mythical tunnel”. |
Newton Dunn added that there are “hopes (on both sides)” of a deal by the end of this week, but also cautioned that it could “still yet all fall apart”. | Newton Dunn added that there are “hopes (on both sides)” of a deal by the end of this week, but also cautioned that it could “still yet all fall apart”. |
This sent the pound up by a cent to $1.344 against the dollar, the highest point since early September, although it’s dipped back slightly since. | This sent the pound up by a cent to $1.344 against the dollar, the highest point since early September, although it’s dipped back slightly since. |
My colleague Peter Walker explained how the tunnel works last year: | My colleague Peter Walker explained how the tunnel works last year: |
Debenham’s former chairman, Sir Ian Cheshire, is hopeful that some jobs will be saved at the stricken department store chain. | Debenham’s former chairman, Sir Ian Cheshire, is hopeful that some jobs will be saved at the stricken department store chain. |
Cheshire told Sky News this morning that it was a “sad day” for Debenhams, particularly for its staff in the run-up to Christmas. | Cheshire told Sky News this morning that it was a “sad day” for Debenhams, particularly for its staff in the run-up to Christmas. |
He expects stores would trade through the Christmas season, adding: | He expects stores would trade through the Christmas season, adding: |
Cheshire predicts that some of Debenhams profitable stores could be split up between different buyers. Its website, and some of its own label brands -- the Designers at Debenhams concept -- are “interesting assets”, and will carry on in some forms, but be digitally led, he added. | Cheshire predicts that some of Debenhams profitable stores could be split up between different buyers. Its website, and some of its own label brands -- the Designers at Debenhams concept -- are “interesting assets”, and will carry on in some forms, but be digitally led, he added. |
Earlier in parliament, Chancellor Rishi Sunak said the Government “stands ready” to help workers affected by job losses at Arcadia and Debenhams. | Earlier in parliament, Chancellor Rishi Sunak said the Government “stands ready” to help workers affected by job losses at Arcadia and Debenhams. |
Press Association has the details: | Press Association has the details: |
The OECD’s latest economic outlook makes tough reading for the UK - showing that Britain’s economy will be among the hardest hit by the pandemic. | The OECD’s latest economic outlook makes tough reading for the UK - showing that Britain’s economy will be among the hardest hit by the pandemic. |
The Paris-based thinktank expects the UK economy to shrink by 11.2% this year, and only grow by 4.2% in 2021 and 4.1% in 2022. | The Paris-based thinktank expects the UK economy to shrink by 11.2% this year, and only grow by 4.2% in 2021 and 4.1% in 2022. |
That’s much weaker than the global average. The OECD predicts the world economy will shrink by 4.2% in 2020, then by 4.2% next year and 3.7% in 2021. | That’s much weaker than the global average. The OECD predicts the world economy will shrink by 4.2% in 2020, then by 4.2% next year and 3.7% in 2021. |
The eurozone is expected to shrink by 7.5% this year, followed by 3.6% growth in 2021, while the US is on track for a 3.7% contraction then a 3.2% recovery. | The eurozone is expected to shrink by 7.5% this year, followed by 3.6% growth in 2021, while the US is on track for a 3.7% contraction then a 3.2% recovery. |
A strong recovery in China should GDP back to pre-crisis levels by the end of 2021, it forecasts. | A strong recovery in China should GDP back to pre-crisis levels by the end of 2021, it forecasts. |
But as this chart shows, Britain is far behind - with Argentina the only G20 nation expected to perform worse. | But as this chart shows, Britain is far behind - with Argentina the only G20 nation expected to perform worse. |
The OECD predicts the UK will suffer weak business investment, increased border costs once the Brexit transition ends, and a rise in unemployment and bankruptcies - although the furlough scheme and Covid-19 crisis loans will cushion the blows. | The OECD predicts the UK will suffer weak business investment, increased border costs once the Brexit transition ends, and a rise in unemployment and bankruptcies - although the furlough scheme and Covid-19 crisis loans will cushion the blows. |
In its report, it says the UK’s ‘initially strong rebound’ in the July-September quarter is set to go into reverse this quarter, after Covid-19 cases rose again. | In its report, it says the UK’s ‘initially strong rebound’ in the July-September quarter is set to go into reverse this quarter, after Covid-19 cases rose again. |
It also warns that growth could be even weaker if the health situation worsens further, saying: | It also warns that growth could be even weaker if the health situation worsens further, saying: |
The forecasts underline that Britain is set to suffer more economic pain from the pandemic than most other nations, as well as running up a record deficit and suffering over 58,000 deaths (within 28 days of positive test) | The forecasts underline that Britain is set to suffer more economic pain from the pandemic than most other nations, as well as running up a record deficit and suffering over 58,000 deaths (within 28 days of positive test) |
As the FT’s Chris Giles puts it: | As the FT’s Chris Giles puts it: |
FT: UK economic recovery from Covid crisis forecast to be among world’s slowest | FT: UK economic recovery from Covid crisis forecast to be among world’s slowest |
Overall, the OECD says the outlook for the global economy is improving, but the crisis isn’t over. | Overall, the OECD says the outlook for the global economy is improving, but the crisis isn’t over. |
OECD chief economist Laurence Boone cautions: | OECD chief economist Laurence Boone cautions: |
And for that reason, the OECD is also urging governments not to risk choking the recovery by cutting spending too soon. More here: | And for that reason, the OECD is also urging governments not to risk choking the recovery by cutting spending too soon. More here: |
The collapse of Debenhams will leave vacant spaces on the high street that will “impossible to fill” in a like-for-like way, warns Dr Gordon Fletcher of University of Salford Business School. | The collapse of Debenhams will leave vacant spaces on the high street that will “impossible to fill” in a like-for-like way, warns Dr Gordon Fletcher of University of Salford Business School. |
UK factories are holding up better than the retailers.....thanks to Brexit stockpiling. | UK factories are holding up better than the retailers.....thanks to Brexit stockpiling. |
New figures this morning showed that output growth, and new business orders, both accelerated last month, helping to slow (but not stop) the downturn in employment. | New figures this morning showed that output growth, and new business orders, both accelerated last month, helping to slow (but not stop) the downturn in employment. |
Data firm Markit, which compiles the monthly PMI report, explains: | Data firm Markit, which compiles the monthly PMI report, explains: |
But the consumer goods sector had a poorer November, with back-to-back decreases in both production and new business. | But the consumer goods sector had a poorer November, with back-to-back decreases in both production and new business. |
Duncan Brock of the Chartered Institute of Procurement & Supply says manufacturers were running at full pelt to meet Brexit stockpiling demands, but 2021 could bring disruption: | Duncan Brock of the Chartered Institute of Procurement & Supply says manufacturers were running at full pelt to meet Brexit stockpiling demands, but 2021 could bring disruption: |