Monday 20/01/20

  1. In RETAIL NEWS, Intu’s finances are in trouble, Beales looks vulnerable and Amazon examines hand gestures
  2. In CAR-RELATED NEWS, we see that owners are hanging on for longer, that electric car demand pushes GKN and Delta together and that pubs might help you refuel
  3. In MISCELLANEOUS NEWS, house prices see a “Boris boost” and the Netflix/Sky tie-up continues
  4. In OTHER NEWS, I bring you a stylish flying rabbit and Morrisons’ cure for snoring…



So retail landlord Intu has problems, Beales looks shaky and Amazon looks at gesture payment…

Shopping centre chain seeks up to £1bn to shore up finances (The Guardian, Zoe Wood) highlights the ongoing travails behind Intu Properties, the landlord which owns shopping centres including Manchester’s Trafford Centre and Essex’s Lakeside. The group has about £5bn in debt and has seen its share price fall by 80% in the last 12 months due to the impact that ongoing poor performance of its retail tenants has had on the value of its properties. It is thought that it may try to raise up to £1bn in order to bolster its financial position. * SO WHAT? * It’s debatable as to how investors might greet a cash call, but even if they do get it, everyone knows that Intu still has a ton of debt. Yes, the company will also be making asset disposals, but then again it is a crowded market as everyone and their dog is trying to sell off retail properties at the moment. This means that buyers in the market can get some real bargains currently and Intu will probably be selling at low prices, meaning it will have to sell more properties, which will bring prices down further etc.etc. in a downward spiral. The tough times continue.

It’s probably fair to say that this has been well-flagged, but Department store Beales on brink (Daily Telegraph,

Matthew Field) shows that the Bournemouth-based department store chain’s future is hanging in the balance as a board meeting will be held today to decide on whether to bring in the administrators. The chain, which was founded in 1881 and now employs around 1,600 staff, has been looking since December for a buyer of its 22 stores, but doesn’t appear to have been successful. The department store gloom continues…

Elsewhere, in Cash, plastic or hand? Amazon envisions paying with a wave (Wall Street Journal, AnnaMaria Andriotis) we see that the e-tailing giant is looking at making your hand your credit card! It is experimenting with putting scanners into stores that will allow card information to be linked with customers’ hand prints. Amazon is said to be pitching the idea to shops that do a lot of repeat business with customers like coffee shops and fast food outlets. Plans for these terminals are in the early stages currently, but Amazon has apparently been working on them most recently with Visa and Mastercard are expected to get involved as well soon. Other card issuers including JP Morgan Chase, Wells Fargo and Synchrony Financial have also expressed interest in the idea. * SO WHAT? * I think this sounds great from a convenience point of view, but there will be obvious security concerns here as to the safety of the data. It sounds like there’s more work to do here, but it does sound quite interesting, no?



Car owners hang on to their vehicles, GKN links-up with Delta and, in future, pubs could refuel your car…

Cars getting older as drivers delay buying new vehicles (Daily Telegraph, Alan Tovey) cites data from Auto Trader which shows that drivers change their cars every 3.4 years on average in 2018, in an upward trend that began in 2016 and one that brings it closer to the peak of 3.5 years in the midst of the financial crisis. The period between 2011 and 2016 saw the time period between changing cars shorten due to strong consumer confidence and cheap deals but since then Brexit concerns and weaker sterling hitting manufacturers’ margins have made deals harder to come by. * SO WHAT? * Unsurprising really, given the economic backdrop. I would also suggest that what’s happening in cars now is similar to what’s happening with mobile phones in that owners are hanging on because they are waiting on the next technology before making purchasing decisions. In mobile phones, it’s about potentially upgrading to a 5G handset, but with cars its about whether or not to go electric. Unfortunately, car dealerships and manufacturers are caught in the middle.

Electric car boom drives GKN-Delta link-up (Financial Times, Peggy Hollinger) highlights a new “strategic collaboration” between GKN Automotive (the world’s #1 supplier of drivetrain tech) and Taiwan’s Delta Electronics that is intended to speed up the development of power systems for electric vehicles (EVs). The partnership will mean that GKN will be able to offer a single package consisting of the electric motor, gearbox and power electronics which will reduce cost, weight and packaging

for car manufacturers. * SO WHAT? * The push towards EVs continues as under EU rules, car makers must reduce average CO2 emissions across their WHOLE fleet to 95g/km or face huge fines that could run into the hundreds of millions, if not billions of euros. I would expect more deals like this to be done as companies manoeuvre themselves to make efficiencies in the face of the rising R&D costs involved in rolling out new technologies.

Why the pub could become the new refuelling point for drivers (The Times, James Hurley) shows us a rather interesting view of the future as Marston’s, the publicly listed brewer and pub chain, has become the first in its industry to announce the installation of rapid chargers across its outlets (rapid chargers deliver 80miles worth of charge to vehicles in 20-30 minutes). Private company Engenie is to install 400 chargers at 200 Marston’s sites in the kind of tie-up that could attract others. * SO WHAT? * This sounds like an interesting solution – especially for the moment – as you would think that pubs and restaurants could benefit from drivers pulling up and buying refreshments while waiting for their cars to charge. IMO, though, while that might sound like a good idea when it takes 20-30 minutes to charge a car at the moment, they will be totally scuppered longer term when technology improves and car charging (and power storage) gets more efficient. I think that the onus will be on car manufacturers and battery makers to reduce charging time to make purchasing EVs a more attractive proposition and so they will have absolutely zero reason to keep charging times as long as they are now. The other thing is that our power infrastructure can’t take the extra demands of loads of fast chargers as there can, practically speaking, only be a certain number in a given area. In conclusion then, for me, I’d say nice idea – but I think it’ll end up costing more money than they will generate in the long run.



House prices experience a “Boris boost” and Netflix continues its relationship with Sky…

Housing market enjoys “Boris boost” as prices rise at record rate (The Times, Miles Costello) cites the latest data from Rightmove, which shows that house prices have risen by 2.3% since the general election – the biggest monthly price rise for this time of the year since such data started in 2002. Data from other sources including Halifax and Nationwide also confirm the trend as buyers close deals before an anticipated rush. * SO WHAT? * FWIW, I can see why house prices at the top end of the market would have risen sharply as I bet that there were a load of rich people who were nervous about Corbyn getting into power and taxing them heavily – so a Conservative

majority was a good outcome as far as they were concerned. However, lower down the market, I do wonder whether this was a bit of a flurry for those who were really desperate to move whereas others may want to wait until the dust has settled on the economy. After all, we are still in the situation whereby no-one knows what’s going to happen with Brexit – and this was one of the main factors holding purchases back!

Netflix’s shows still in demand at Sky (The Times, Dominic Walsh) highlights a new multi-year deal between the two to ensure that Netflix content will be made available to subscribers after initially teaming up two years ago. This is the latest in a line of deals for Sky which has recently signed agreements with the BBC, Channel 4, Channel 5 and Warner Media. * SO WHAT? * A strategically smart move for Sky, I think, and perhaps increasing competition for Netflix in the form of Disney+, Apple TV etc. might have taken the edge off Netflix’s negotiating power.



And finally, in other news…

I thought I’d leave you today with the incredibly cute Bunny in a bow tie is living her best life as she flies first class with owner (The Mirror, Courtney Pochin I’m not a rabbit person per se, but she really is beautiful! Then there is good news for those who sleep with snorers in the form of Morrisons is selling a plant Nasa says can stop your partner’s snoring – and it’s only £10 (The Mirror, Paige Holland Wow!

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Some of today’s market, commodity & currency moves (as at 0815hrs 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 **
7,673 (+0.93%)29,350 (+0.21%)3,329 (+0.41%)9,38913,509 (+0.62%)6,099 (+1.01%)24,041 (+0.45%)3,075 (+0.05%)
Oil (WTI) p/bOil (Brent) p/bGold Per t/oz£/$€/$$/¥£/€$/₿

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