Monday 15/06/20

  1. In MARKETS & MACRO NEWS, global stocks have a wobble, Macron lifts restrictions and economists paint a bleak picture of the UK
  2. In LEISURE & RETAIL NEWS, tourism suffers while hotels do their best, shoppers and retailers prepare to re-engage and we look at winners and losers, TM Lewin’s next move and Ikea paying back furlough money
  3. In OTHER NEWS, the owner of Timberland and Vans wants to go shopping and car insurers get nervous about returning drivers
  4. AND FINALLY, I bring you Air Pod cleaning and some amusing dog photos…



So global stocks reflect second wave worries, Macron lifts restrictions and things aren’t looking good for the UK economy…

Global stocks fall after jump in China and US coronavirus cases (Financial Times, Hudson Lockett) shows that news of a mini-spike in new coronavirus infections thought to originate in a seafood and veg market in Beijing over the weekend, as well as a jump in the number of cases in the US, spooked markets. Until this weekend, Beijing had gone for over 50 days without a new case and now there are fears of a second wave and potential new lockdowns. In the US, the number of new cases increased by over 25,000. * SO WHAT? * Markets are highly sensitive to any news in this regard and so we are likely to see them oscillate between falls due to new cases and rises due to new drug test developments. At some point, we are going to see a successful drug – and when THAT happens, markets will go bananas.

Emmanuel Macron lifts most coronavirus restrictions (Financial Times, Victor Mallet) highlights the latest developments in France as its president has now lifted

almost all of the lockdown restrictions. Most will end from today and all French schools will open fully for compulsory attendance from June 22nd. Bars and restaurants will now be fully open (they have been restricted recently to serving customers outside) and travel within Europe will return to normal today while international travel gets the green light from July 1st. There will still be limits on large gatherings. In his televised speech to the nation yesterday, Macron said he would outline more detailed plans in July for the rest of his presidency. * SO WHAT? * Macron said he would “reinvent” himself following his experiences during the coronavirus crisis, so it will be interesting to see what he comes up with.

As if we didn’t already know things aren’t going to be great economy-wise going forward, Economy to shrink by 8% this year (The Times, Gurpreet Narwan and Callum Jones) cites the forecasts of the EY Item Club which say that Britain’s economy will contract by 8% this year. On the plus side, they also said that they expect things to start recovering from the third quarter, assuming gradual lifting of restrictions by the government continues. * SO WHAT? * Obviously this is just best-guess stuff because there’s not really much to work with and so much depends on what the government decides to do and when. We’ll just have to wait and see what happens.



The tourism industry does its best, shoppers and retailers await a return, TM Lewin’s new owner gets aggressive and Ikea does the decent thing…

Tourism deals lingering blow to global economy (Financial Times, Valentina Romei) takes a look at the devastation wrought by the coronavirus on the industry by the coronavirus outbreak, the resultant impact on the global economy and the challenges it faces. Tourism has seen positive momentum over the years as middle classes have expanded in emerging economies, meaning that more people have money to spare to spend on leisure. According to stats from the World Travel and Tourism Council (so no bias there then 😜), tourism accounts for 25% of all new jobs created over the last five years and about 10% of economic output on a global basis. Tourism is more important to some countries than others, with it accounting for 30% of the economies in some countries in South Asia, southern Europe and Central America. * SO WHAT? * This article cites tons of rather depressing stats – the IMF has warned that some Caribbean countries will face their deepest recession for over 50 years – but it seems that some places are trying to adapt by pushing domestic tourism as international travel still faces a number of restrictions. The next step will be to encourage regional tourism, which Asia is already starting to do by negotiating “bubbles” where visitors won’t have to undergo quarantine. Europe is also keen to do something similar as 85% of European arrivals are from within Europe. Numbers will definitely be down versus normal circumstances, but at least this gives the industry some hope for survival.

Hotels are reopening. Will guests have any reservations? (Wall Street Journal, Craig Karmin and Steven Russolillo) shows how hotels are having to adapt to include coronavirus protocols in order to reopen – loads of extra signage asking guests to stay 6ft apart, every other treadmill being off limits, extreme cleaning and housekeeping on request only (so no free choccy?!) are among the measures. * SO WHAT? * You should read this article if you can – it’s really interesting. However, for all the innovations and extra precautions, it seems to me like this is all going to be a bit of a pain as a customer. After all, for many, the little things that you get as a hotel guest tend to add to your holiday and all these extra bits of protocol will chip away at the feelgood factor IMO. As I have said before, I think that people will be more inclined to sort out an Airbnb for less hassle, less stress and possibly more freedom until restrictions lift completely.

Meanwhile, although Retailers ready to open doors into a socially-distanced world (Daily Telegraph, Hannah Uttley) shows how preparations have been going in the lead-up to today’s opening of “non-essential” shops, it’s only half of the equation as Retailer woe as half of shoppers may stay at home (Daily Telegraph, Russell Lynch) cites a Daily Telegraph YouGov poll which suggests that 40% of consumers will spend less than they did pre-lockdown as they fear for the economy and the prospect of rising unemployment. 50% of shoppers are “uncomfortable” about returning to clothing stores versus 40% who are happy to return and 20% of respondents say that they will

be “very uncomfortable”. As far as pubs, restaurants and hairdressers are concerned, 54% said they’d be uncomfortable going to pubs, 53% said the same about restaurants and 41% would feel iffy about going to the hairdressers. Good time for home comforts and a bad one for travel (Daily Telegraph, Laura Onita) highlights some of the retail winners and losers so far. Winners include supermarkets (panic buying, eating at home etc.), meal kit start-ups (Mindful Chef saw a 452% increase in its new recipe box), DIY/home improvement specialists (in addition to people doing a bit of DIY, and Cox & Cox have seen orders related to people creating work spaces in their homes), bike shops (e.g. Halfords and Evans as fewer people want to run the gauntlet of public transport) and sellers of loungewear (no need to buy a suit if you can hang around in your jim-jams all day 😂). Losers include “tired brands” that were already in trouble and/or got the offline/online balance wrong (e.g. Cath Kidston, Debenhams, Monsoon Accessorize), builders merchants (e.g. Travis Perkins, due to projects being postponed etc.), Ocado (yes, they are online specialists but weren’t able to scale up quickly enough and are still having issues) and WH Smith (who has suffered because most of its profit have been made from outlets at travel hubs like train stations and airports). * SO WHAT? * It’s going to be a bumpy ride for retailers and consumers alike and I think that a lot of how this unfolds will depend on how consumer nerves can be calmed. Some of that will be down to the shopping experience, but a lot of it will be due to how confident consumers will be feeling about their household finances.

Shirtmaker rolls up its sleeves for rent battle (The Times, Ashley Armstrong) highlights a bit of drama on the high street as the new owners of TM Lewin, SCP Private Equity (run by James Cox, founder of Simba sleep – which isn’t really much to boast about considering the company’s been quite a disaster until recently!) is getting a bit feisty with its landlords. SCP has created a new vehicle called Torque Brands, a stable of British brands with global potential, and has told landlords via its advisers at commercial property specialist Cedar Dean that it will put TM Lewin into pre-pack administration unless landlords lower the rents. * SO WHAT? * Landlords are having a nightmare because their previously cosy arrangement of getting paid fat (and rising) rents on a quarterly basis is being challenged by the carnage on the high street and stricken retailers asking for things like monthly payments based on turnover and service charges to be waived while shops have been shut. I suspect that many retailers will be using the coronavirus and high rent demands from landlords as an “excuse” for mass store closures (things were already looking pretty tricky before the pandemic hit anyway). Landlords are being forced on a daily basis to chose between reduced rents and no rents. The tough times continue…

I thought I’d also mention Ikea in talks with governments over returning furlough money (Financial Times, Richard Milne) because it is something you might have to frame and hang on your toilet wall considering how rare this action is likely to be! Basically, Ikea used furlough money to pay its staff, but actually found that the business had done better than expected and so is trying to do the decent thing and pay back the money to governments in Belgium, Croatia, the Czech Republic, Ireland, Portugal, Romania, Serbia, Spain and the US! Wow!



Timberland’s owner wants to go shopping and insurers brace themselves for rusty drivers…

Although many retailers are suffering at the moment, Timberland and Vans owner eyes acquisitions despite uncertainty (Financial Times, Alistair Gray) highlights that the company behind Timberland, Vans and The North Face, VF Corp is looking for further acquisitions and sees current circumstances as an opportunity to pick up some more assets. Although Canada Goose, Gap’s Athleta and Columbia Sportswear have been mooted by some commentators as potential targets, VF Corp itself has not commented on the speculation. * SO WHAT? * VF sounds

like a canny operator and has recently disposed of Wrangler and Lee jeans although, notably, it hasn’t made any acquisitions since it bought Icebreaker (merino brand) and Altra (running shoes) in 2018. Apparently, it has a $5bn fund it can dip into for acquisitions – so things could get interesting.

Insurers watch and wait as rusty drivers return to the roads (Financial Times, Oliver Ralph) heralds a nervous waiting game for insurers as drivers who have only been driving to and from the supermarket return to the roads today! Companies including Direct Line, Hastings and Admiral have all been benefiting from a fall in claims as people have kept off the road. Some, such as Admiral, have offered a rebate to their customers to take this into account, but it will be interesting to see how claims go now things are slowly edging towards normality.



…in other news…

I’m all about trying to improve the quality of your life, here at Watson’s Daily, so how’s about this: Hack shows how to properly clean headphones – and the results are gross (The Mirror, Luke Matthews Also, I thought I’d leave you with some amusing photos in Owner shares photo of her dog sitting like a ‘weirdo’ and it’s adorable (The Mirror, Luke Matthews I think “weirdo” is rather harsh for the poor dog – he looks very cute! Unusual, yes – but weirdo, no 😂

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Some of today’s market, commodity & currency moves (as at 0742hrs green is up, red is down). THIS IS INTENDED AS A ROUGH GUIDE ONLY!

FTSE 100 *Dow Jones *S&P 500 *Nasdaq*DAX *CAC-40 *Nikkei **Shanghai **
6,105 (+0.47%)9,58911,949 (-0.18%)4,826 (+0.21%)21,531 (-3.47%)2,890 (-1.02%)
Oil (WTI) p/bOil (Brent) p/bGold Per t/oz£/$€/$$/¥£/€$/₿

(markets with an * are at yesterday’s close, ** are at today’s close)