Shoppers welcome Christmas with record online spending but high street clothes shops struggle. Shoppers kept tills ringing in November, defying expectations of belt-tightening and surprising retailers with a stronger start to the festive season than last year. Online sales led the way, but growth in clothing was sluggish, backing up gloomy reports from both high street and internet retailers. Internet sales accounted for 21.5% of all retail purchases in the month, the first time online activity has accounted for more than a fifth of all volumes. Each week in November shoppers spent £1.3bn online, a rise of 13.1% on the year. Total retail sales volumes climbed 3.8% compared with November 2017, the Office for National Statistics said, well above the growth forecast by economists. By contrast sales volumes barely grew in the same month last year.
Stagecoach sells off North American arm in £214m deal. Stagecoach Group (SGC) has struck a $271m (£214m) deal to sell its struggling US coach division as it looks to focus its energies on bus and rail services in the UK. Plans to offload the arm emerged earlier this month when Stagecoach revealed it had opened talks with a number of parties to sell all or part its North American network. Los Angeles-based private equity firm Variant Equity Advisors has now agreed to pay $207m in cash and assume $64m of debt to acquire the coach division, which comprises Megabus, Coach USA and Coach Canada. Stagecoach, which previously insisted it would not sell “at any cost”, will use the cash proceeds from the sale to reduce its debt. The transaction is expected to complete in April.
Banks left in the lurch after Kier Group (KIE) investors shun new shares. Bankers and brokers working on construction contractor Kier Group’s emergency fundraise saw their fees evaporate after it flopped. A consortium of banks and brokers underwriting the debt-laden company’s rights issue were left holding 28m shares after fewer than two-fifths of Kier shareholders chose to back an emergency cash call for £250m. In an embarrassing blow to management, shareholders chose to see their stake diluted rather than put new money into the company. Kier had offered 33 new shares for every 50 owned, at a price of 409p a share, a discount of more than one third on the shares’ closing price the day before it was announced.
US markets on course for worst December since Great Depression amid fears of Fed policy mistake. Fears that US central bankers will push markets to breaking point in 2019 triggered another rout in global stocks as the sell-off on Wall Street became the worst in December since the Great Depression. Global stocks slumped to a 20-month low after another interest rate rise at the US Federal Reserve in the face of market turmoil ignited worries that it has made the policy error that will end a record bull run. The Fed pressed ahead with its dual tightening policy, lifting borrowing costs for a fourth time of 2018, guiding markets towards two more hikes in 2019 and vowing to leave its plan to reverse quantitative easing on “autopilot”. Hopes that a “Santa rally” could curb large losses on stock markets at the end of a volatile year were crushed by the Fed ignoring recent market turmoil and pressure from Donald Trump to press ahead with its plans to normalise monetary policy.
Watchdogs unite to block Siemens-Alstrom merger amid HS2 competition concerns. Competition authorities from across Europe have united in unprecedented action to block the merger of Siemens and Alstrom, whose trains are widely used across the continent and under consideration for Britain’s controversial High Speed 2 project. Customers, which could include the UK Government, would have “little bargaining power” to protect against price rises if the merger is allowed to go ahead because the new company would dominate the sector, officials from Britain, Netherlands, Belgium and Spain wrote in a letter to European competition commissioner Margrethe Vestager. Signatories, which include Britain’s Competition and Markets Authority (CMA), stated that “the merger raises very serious and extensive competition concerns” and remedies so far put forward “fall far short of what would be required to address all concerns”.
