Ryanair Holdings (RYA) has demanded that the government extend any “tax holiday” granted to Flybe Group (FLYB) to other airlines or be in breach of competition and state aid laws. In the growing industry backlash against the rescue of the regional carrier, the Dublin-based airline said that it had written to the chancellor, Sajid Javid, to request the same treatment as Flybe’s “billionaire owners” – who include Sir Richard Branson and Delta Airlines. Ryanair’s chief executive, Michael O’Leary, warned that Flybe would “undoubtedly fail once the subsidy ends”. The details of the rescue agreement have been kept under wraps since Tuesday evening, when ministers led by Javid announced that Flybe had been saved. The package is understood to involve the short-term deferral of an outstanding air passenger duty (APD) tax bill of £106m, a possible loan, and the promise to review APD levels before the March budget.
Sales at Primark’s UK stores went backwards at Christmas in a further sign of the toll taken on fashion retailers by grim market conditions over the traditionally lucrative trading period. The no-frills fashion chain suffered a “marginal” decline in underlying sales and said it would open only one store in the UK this year – the lowest number in decades – as it turns its financial firepower overseas in search of growth. The Primark update came as high-street suits specialist Moss Bros Group (MOSB) said it would make a loss of £1m in the current financial year. The chief executive, Brian Brick, said “intensive discounting” by rivals and a big dip in shopper numbers on the high street were behind a 3.2% drop in like-for-like sales in the 24 weeks to 11 January. The plus-sized online specialist Brown (N.) Group (BWNG), which owns Simply Be and JD Williams, also blamed wall-to-wall discounting in December alongside problems in its finance arm for a profit warning that knocked nearly 25% off its shares. Its sales finished 5% down in the 18 weeks to 4 January, a performance that shaved £10m off pre-tax profits, which are expected to come in at £71m. Many retailers, including big high-street names such as John Lewis and Marks & Spencer Group (MKS), struggled to get shoppers to part with their cash in 2019 as political instability and worries over Brexit weighed on consumer confidence. Many retailers resorted to price cuts, and last week Steve Rowe, the chief executive of M&S, complained of “unprecedented discounting” between Black Friday and Christmas. Analysts said Primark fared better than other UK clothing chains, with sales at established UK stores down by about 0.5% compared with a drop of as much as 2% across the market in the 16 weeks to 4 January. John Bason, finance director at Primark’s owner, Associated British Foods (ABF), said the retailer had won business from rivals with its low prices.
Halfords Group (HFD) enjoyed a surge in bicycle and scooter sales over the Christmas period, bolstered by the popularity of electric models and its partnerships with Disney and Trunki, with a record number of children’s bikes sold. The UK’s biggest bike retailer said sales of electric bikes and scooters jumped 96% year-on-year in the 14 weeks to 3 January. They now make up 13-14% of total sales. Overall bike and scooter sales rose 5.9% at established stores. Halfords built 86,000 bikes in the week before Christmas alone. The firm developed a new range of Trunki folding children’s scooters and balance bikes and launched 48 children’s’ bike models overall in the past quarter. The popularity of cycling has soared in Britain in recent years. Graham Stapleton, the Halfords chief executive, said: “People want to get healthier. People are looking for alternative modes of transport with the climate on their minds.”
