M&S agrees £750m food delivery deal with Ocado. Marks & Spencer Group (MKS) will buy 50% stake and take its food offerings online for first time. Marks & Spencer has formed a £1.5bn online delivery joint venture with Ocado Group (OCDO) to bring M&S’s ready meals, food hall favourites and Percy Pig sweets to internet shoppers for the first time. The venture will not start trading until September 2020 at the latest, when Ocado’s present deal to deliver Waitrose products expires. Only 10% of the products on sale at Ocado.com will be M&S-branded goods. M&S shares fell 7% in early trading after the details of the deal were announced. Marks & Spencer will launch a £600m rights issue and slash its dividend payout to shareholders by 40% in order to fund the deal. Ocado’s shares rose 6%. Steve Rowe, Marks & Spencer’s chief executive, said he had “always believed that M&S Food could and should be online” and combining M&S’s food with Ocado’s technology and delivery network was a “win-win” and “compelling proposition to drive long-term growth”. He added: “Our investment in a fully aligned joint venture with Ocado accelerates our food strategy as it enables us to take our food online in an immediately profitable, scalable and sustainable way.” Tim Steiner, the chief executive of Ocado, described the deal as a “transformative moment in the UK retail sector” that would combine “two iconic and much-loved retail brands set to provide an unrivalled online grocery offer”.
Ted Baker (TED) issues profit warning after writing off £5m of unsold stock. Shares dive as fashion retailer says full-year profits will be £10m lower than expected. The company, which was plunged into crisis last year when its founder and chief executive, Ray Kelvin, was accused of imposing a regime of “forced hugs” on staff , said it expected profits for the year to the end of January 2019 would come in at about £63m compared with previous expectations of £73.5m. Last month the company said business was trading “as usual” and reported a 12.2% increase in sales. The shares were down 11% at £17.79 on Wednesday morning.
Interserve’s biggest shareholder says rescue plan is ‘terrible’. Lenders’ proposal would leave shareholders with just 5% of the government contractor. The largest shareholder in debt-laden Interserve (IRV) has described new financial restructuring plans put forward by the government contractor as “terrible” and warned it is prepared to sue the company’s board and lenders if rescue talks fail and the company falls into administration. Interserve, which employs 45,000 people in the UK, is at the centre of an increasingly acrimonious showdown over its future, just a year after fellow outsourcer Carillion collapsed into administration. Interserve said the restructuring plan was “critical to our future”, warning it would run out of cash unless investors wave through the plan at a vote on 15 March.
BBC and ITV (ITV) team up to launch Netflix rival BritBox. Streaming service to launch this year will feature archive shows and new commissions. The BBC and ITV have confirmed plans to join forces and launch a paid-for streaming service called BritBox by the end of this year, in an attempt to head off Netflix. Netflix is eating into the market share of traditional broadcasters, as audiences increasingly desert established channels and expect shows to be available instantly on streaming services. BritBox will mainly feature archive BBC and ITV shows, alongside new British commissions made especially for the service. There were no details on pricing; the announcement said it would be “competitive”. However, BritBox will not have the latest BBC and ITV shows, which will remain available through the catch-up BBC iPlayer and ITV Hub services. Other broadcasters are expected to join the service later, with Channel 4 known to have taken part in discussions, which were revealed by the Guardian last year.
Taylor Wimpey reports £811m in profits boosted by help-to-buy. Housebuilder says it has yet to see any signs of Brexit-related slowdown in demand. Taylor Wimpey (TW.) is the latest housebuilder to report bumper profits for last year, boosted by the government’s help-to-buy scheme and low mortgage rates, as it signalled a strong start to 2019 despite Brexit uncertainty. Britain’s third largest homebuilder posted a pretax profit of £810.7m for 2018 – up 19% on the previous year – after selling 15,275 homes. Pete Redfern, chief executive, said the firm had yet to see any sign of a Brexit-related slowdown in demand. “Despite ongoing macroeconomic and political uncertainty, we have made a very positive start to 2019 and are encouraged to see continued strong demand for our homes.”
Burberry launches staff training plan after ‘noose’ hoodie row. British label vows to embrace diversity and inclusion after anger over knot design. Burberry Group (BRBY) has pledged to give its employees mandatory training and increase its support for the Samaritans after being widely condemned for putting a jumper with a “noose” design on the catwalk. A week after the luxury fashion house apologised for the hoodie, which ties in the shape of a noose, its chief executive, Marco Gobbetti, said the brand would embrace diversity and inclusion through a series of initiatives. “We are not where we need or want to be,” he said in a statement posted on Instagram. The brand had been accused of evoking images of lynchings and suicide by including the hoodie in the collection shown recently at London fashion week. Gobbetti previously said Burberry was “deeply sorry for the distress” the item had caused, while Riccardo Tisci, its creative director, also apologised, saying he had come to “realize [sic] that it was insensitive”.
