Business News

Elon Musk says 'I was not on weed' as Tesla tycoon defends his $420 buyout tweet

2018-08-17 20:18:41 admin

Tesla’s colourful founder Elon Musk today moved to deny rumours he had been intoxicated when sending last week’s now-notorious tweet about taking his carmaker private.

“I was not on weed,” he said. 

Speculation was rife that he was high at the time of the tweet because he said his plan was to pay $420 a share; 420 is a number Americans associate with marijuana smoking.

Musk told the New York Times he was driving to the airport at the time.

However, his explanation will do little to stem Wall Street regulators’ investigations into the message, which saw its shares rocket, causing big losses for short-sellers betting the price would fall.

Musk, who appeared overcome with emotion at times during the interview, said friends were worried he was exhausted from working  120-hour weeks. He worked 24 hours through his 28 June birthday, he said: “All night. No friends. Nothing.”

He admitted to taking the sedative Ambien when he was not working: “It is often a choice of no sleep or Ambien.”

A search for a deputy to take his workload has been fruitless, he said. “If you have anyone who can do a better job, please let me know.”

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House of Fraser debt: Department store owes millions to brands from Armani to Barbour and Phase Eight

2018-08-17 20:18:33 admin

Household brands including Giorgio Armani, Ralph Lauren and Kurt Geiger are owed millions of pounds each by House of Fraser, it emerged today. 

The 169-year-old High Street stalwart is laden with almost £1 billion of debt, which could leave suppliers, concessionaires and logistics companies out of pocket, new documents from administrator EY show. 

Luxury brands Giorgio Armani and Mulberry are owed £1.59 million and £2.4 million, with Kurt Geiger £4.8 million and Ralph Lauren’s Polo UK Limited standing to lose £9.4 million, as well as Phase Eight owed £3.4 million. 

Other names include Superdry (£236,000), Warehouse (£1.4 million), Aspinal of London (£350,594), stock-market-quoted sofas seller ScS  (£1.6 million) and jackets maker Barbour (£3 million). 

XPO Logistics, the company which looked after House of Fraser’s distribution centre in Wellingborough and has refused to fulfil online orders since the deal was struck, is owed £30.4 million.  

The department stores chain was bought by Sports Direct billionaire Mike Ashley for £90 million last Friday, hours after it collapsed into administration, in a “pre-pack deal”, an agreement which allows the buyer to shed its pension scheme and other liabilities. 

House of Fraser’s finances deteriorated rapidly, the documents showed. 

It made a pre-tax loss of £4.1 million for the year to January 27. Moreover, turnover fell by 7.7% in the first quarter to April 28 and it made underlying losses of £31.4 million. The accountancy giant held talks with 48 potential bidders for the chain, of which 15 signed a non-disclosure agreement to be able to look at House of Fraser’s finances more closely before they tabled an offer. 

However, only six came forward, including retail tycoon Philip Day and Ashley. 

Most of the £90 million will be used by EY to pay House of Fraser’s banks and bondholders with very little left for unsecured creditors. Suppliers, who provide clothing and other products, and concessionaires, who sell their products from inside a department store, are unsecured creditors. Suppliers often get as little as 2p or 3p in the pound back in cases of administration. 

A major supplier to House of Fraser told the Evening Standard it was considering pulling out the brand, regardless of whether Sports Direct pays the money it owes to suppliers and concessionaires.

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Deloitte lands £2.6m for crash Whitehall course in post-EU trade

2018-08-17 20:18:24 admin

​The International Trade department is shelling out £2.6 million for Deloitte to run a pre-Brexit crash course for mandarins in international commercial disputes.

Deloitte will be training the 100 investigations staff manning the new Trade Remedies Authority, which will probe unfair trade practices such as the “dumping” of goods on this country that might harm British industry.

Currently, the TRA’s work is done by the European Commission, but the Government has had to set up its own duplicate version due to Brexit.

The TRA will investigate unfair practices and recommend actions such as imposing tariffs. MPs have voiced concerns it will become politicised if not kept adequately independent.

Under the contract reported by tenders research group Tussell, Deloitte has to train up the new department’s staff quickly, “to enable the TRA to be operational in time for the UK’s exit from the EU”.

The contract is one of many wins for private consultancies resulting from Brexit.

Deloitte is already earning up to £5 million for work handling the application process for EU citizens living in Britain seeking “settlement” status here.


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World beater: Boden is a global hit

2018-08-16 20:15:18 admin

Boden, Middle England’s favourite online clothing retailer, has revealed that its international sales have surged past those in the UK for the first time.

Founder and chairman Johnnie Boden also said the mail order business remained committed to distributing 50 million catalogues a year, as its customers “love to browse” them before ordering products online.

Boden, which counts David Cameron and his wife Samantha as fans, said its overseas sales has overtaken UK revenue in the last three months.

Johnnie Boden, who owns 60 per cent of the company, said: “We are still growing in England but the international markets are growing faster. The US is now a $200m business. We are one of the most successful British clothing retailers in the US.”

He launched in America in 2002 and also delivers to scores of countries, including Germany, Japan and India.

In the UK, Johnnie Boden said trading in the first few months of this year had been “very difficult”, partly because of the extended near-Arctic weather. But he added it enjoyed “strong” sales in April.

The founder declared that it was “highly unlikely” he would seek to float the business but refused to rule it out in the long-term.

He said: “We are fortunate at the moment that we do not need to raise any money. There is no real reason [to float] unless we wanted to use equity to buy another company but we have quite a lot on our plate at the moment.

“It is a possibility if there is an amazing corporate deal that falls into our lap with something that we felt was unmissable.”

Click here for Boden discount codes

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Jim Armitage: Companies may regret writing off the scribblers, some were good

2018-08-16 20:15:10 admin

For years, company bosses and investors would bemoan the City analysts. 

These “scribblers” were paid small fortunes by the brokers who employed them to opine (with no great insight, the complaint went) on the financial prospects of stock market companies. 

The brokerages would offer their research as an additional service to the fund managers for whom they were buying and selling stock. Hopefully, the brokers reasoned, their analysts’ recommendations and ideas would encourage clients to do more trading.

The complaint from the CEOs and fund managers was that there were too many analysts and most of their work was superficial or downright wrong; if only we could get shot of them altogether, they’d moan.

Be careful what you wish for. The new Mifid II financial rules mean brokers can no longer “bundle” the cost of research with the commission they charge fund managers for executing trades. In the interests of transparency, research has to be sold separately, at a price that reflects the salaries and overheads of the analysts.

Fund managers have been shocked by the cost and largely refused to pay, trimming the number of firms from which they take research to a handful.

This has dropped an H-bomb on the brokers’ business models. Unable to justify paying salaries, they have canned more than 160 of them.

Some fund managers say good riddance. Others are less happy. They say many of those fired were good at their jobs, and that their absence means less diversity of thought about companies’ valuations and strategies. 

There’s no doubt the value of the “consensus analyst forecast” — the average of brokers’ views on where companies’ earnings should be — is denuded. Where a few years back, the average would be taken from a dozen or more, now it may be five or six.

This matters. On results day, companies’ shares rise or fall depending on whether they beat or miss the consensus. If the consensus is out, so is the share price.

The scribbler shortage is even worse for smaller firms. As fund manager Downing warns today, smaller companies are now covered by an average of just 0.6 analysts. About 200 have none at all. With little independent research on these businesses, few small investors are prepared to buy their shares. Given that private individuals make up 30% of small-cap share trading, that’s a big problem; SMEs are stifled of investment and fail to achieve their growth potential.

Some specialist research houses are carrying out analysis paid for by the company being analysed. That’s a start, but the quality can be questionable and investors fear the piper is calling the tune.

Mifid II was done with good intentions but has had unintended consequences. The City has yet to figure out how to deal with them. 

Meanwhile, many are thinking: perhaps all those scribblers weren’t so bad after all.

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