Thursday newspaper round-up: Retail sector, Austerity, Lloyds

2nd Feb 2012 06:48

The former chairman of the fashion retailer New Look has said the high street is in an "death spiral" and has recommended re-classing empty shops for residential use. Phil Wrigley, the chairman of the retailer Majestic Wine, also criticised the recent report on the high street by Mary Portas, the self-styled Queen of Shops, as the "right diagnosis, wrong prescription". His views, based on nearly 30 years in the retail sector, come at a time when more than 14 per cent of town centre shops on average are vacant. Mr Wrigley called for the "reinvention" of high streets. He said: "Retailing will never be the same again, but there is much to be gained from facing up to this fundamental, and irreversible, truth. In doing so, we might just create the space in which we can re-cast and revitalise our town centre communities," The Independent reports. A Eurozone meltdown would plunge Britain back into a two-year recession and send unemployment soaring above 10%, the Institute for Fiscal Studies (IFS) has warned. Should Greece, Portugal, Ireland, Spain and Italy all leave the euro, the UK economy would shrink by 1.7% this year and 0.9% in 2013, and unemployment would hit 10.7% - its highest level since its last peak in January 1993. John Walker of Oxford Economics, who prepared the macroeconomic forecasts for the think-tank's Green Budget, said: "We would see the potential for that happening as not much less than our central case." A second economic crisis in four years would add almost £200bn to the national debt, pushing it up to 90.5% of GDP compared with its current forecast peak of 78%, The Telegraph reports. "What have they been smoking at the Treasury? The Institute for Fiscal Studies (IFS) didn't quite ask the question in its Green Budget yesterday, but its message was clear enough - that policy-makers must have been high on something when they drew up the Coalition's £123bn austerity programme. Just look at the precedent. The seven-year squeeze will be the tightest for public spending since records began after the Second World War. The UK has never before tried to cut spending for more than two years running. Nothing like it has been attempted in the past 40 years in any of the world's 29 advanced economies. (...) A separate report yesterday from the National Audit Office, though, did suggest the Government has strayed into Wonderland. Just 2.3% of departmental spending cuts have been completed so far, against a target of 19% by April 2015 (...)," The Telegraph writes. The Tesco executive who sold £200,000 of shares days before a profit warning has been removed from his position. Bob Robbins is no longer chief operating officer of Tesco's UK business, according to an internal announcement seen by The Times. Mr Robbins will instead report to Philip Clarke, group chief executive, in a new advisory role. In the memo to staff, Mr Clarke wrote: "As we move closer to the new financial year, I have reflected on the changing needs of the business and I have asked Bob Robbins to change his executive committee accountabilities. (...)Tesco said Mr Robbins' change of responsibility was not related to the share sale and had been long planned. It added that it was "far from a demotion," The Times says. Icap has reined in bonus payouts to its City dealers as part of a cost-cutting drive that saved £20m last year. The world's largest interdealer broker ? which stands between institutions in bond and derivatives deals ? has also axed "a handful" of staff and renegotiated terms with suppliers. Michael Spencer, Icap's chief executive, said yesterday that the broker had been hiring staff in growth areas such as financial futures and commodities trading. He declined to go into detail about the number of job losses ? Icap employs more than 5,000 people ? but signalled that Icap was also taking a tough stance on negotiating future bonuses, according to The Times. The last of the old guard who worked for former Lloyds' boss Eric Daniels is quitting this month as part of a wider management shake up unveiled yesterday to ease pressures on his successor at the helm, Antonio Horta-Osorio. An internal and external search has been launched to find a successor to Truett Tate, who heads the bank's wholesale division, which handles lending to bigger businesses. Analysts said the internal frontrunner for the post is Andrew Gezcy, managing director of Lloyds' wholesale banking and markets arm, who will report to Horta Osorio in the meantime. Horta Osorio, who took temporary sick leave with exhaustion late last year, said: "I would like to thank Truett for his contribution and commitment to the group over the last eight years, The Scotsman says. AB