Charlotte Street Partners



High street commotion

Written by Javier Maquieira, senior associate 
Edited by Adam Shaw, associate partner
9 February 2021

Good morning,

The demise of the high street was anticipated long before the Covid-19 pandemic struck. But with extended lockdowns having turned online shopping into a necessity rather than a preference, the judgement looks to be final.
Over recent weeks, many of the UK’s former favourite fashion retailers have found themselves at the sharp end of our hastened adoption of e-commerce. Big names, such as Debenhams and Arcadia’s Topshop, have gone into administration and are being bought by online-only retailers like Boohoo and Asos that either didn’t exist or had very low market share 20 years ago.
Only yesterday, Boohoo decided to buy the final three Arcadia brands that were up for grabs – Burton, Dorothy Perkins, and Wallis – officially completing the carve-out of Sir Philip Green’s fashion empire. As with other recent acquisitions of high street brands by online retailers, physical shops are not part of the swoop, adding further to the thousands of jobs being lost in the hollowing out of town centres.
These deals have inevitably increased pressure on the chancellor of the exchequer to change the way the government taxes online businesses.
In a letter sent to Rishi Sunak ahead of next month’s budget, the leaders of 18 retail and property organisations, including Tesco, Asda, Morrisons, B&Q and Waterstones, have called for internet retailers to pay their “fair share” of tax. Failing to do so, they argue, means the UK government risks accelerating the collapse of the high street, especially once physical retailers stop benefitting from the 12-month rates holiday introduced last April.
One of the biggest business rate payers in Britain, Tesco, is proposing a one per cent “online sales levy for businesses with annual revenues over £1m” and calling for a reform of business rates to “create a system that is fair and sustainable for all”.
The Treasury, which is due to report back on last year’s fundamental review of business rates in the spring, is understood to be considering an “Amazon tax” targeting major online retailers, along with an “excessive profits tax” aimed at companies that have benefitted from the pandemic.
On the other hand, the British Retail Consortium, which has today published new data showing sales of non-food items in stores dived by 36.5% over the three months to January, has opposed the measure, arguing it would hit high street retailers with online operations and bring higher costs for shoppers.
Whatever the outcome of Sunak’s review, the high street will emerge from this crisis having changed beyond recognition.


Boris Johnson is set to announce tougher restrictions on international arrivals to the UK in an attempt to protect Britain’s vaccination programme against new coronavirus variants. The new measures will require all passengers arriving in the UK to be tested for coronavirus on day two and day eight of their isolation, regardless of the country they have come from and whether they are at home or in hotel quarantine.
England’s deputy chief medical officer, Professor Jonathan Van-Tam, told the coronavirus press briefing yesterday that people in the UK “should not be concerned” that the Oxford/AstraZeneca vaccine could be less effective against the South African variant. In an attempt to calm people’s fears, the government adviser said case numbers of the strain in the UK are “very small” and it is not likely to become more dominant than the Kent variant. 
The trial of Donald Trump in the US Senate is due to begin today, after he was impeached for the second time by the House of Representatives last month. The former president, who is charged with “inciting insurrection” in a speech to supporters ahead of the deadly Capitol riot, has said he will not testify, while his lawyers have argued rioters stormed Congress in Washington, DC on 6 January “of their own accord”.

Business and economy

Tesla announced a $1.5bn (£1.1bn) investment in bitcoin yesterday in a move that saw the digital currency soar 14% to a record high of $43,500. Elon Musk’s company also stated its intention to begin accepting the cryptocurrency as a form of payment for its products in the near future, “subject to applicable laws and initially on a limited basis”. 
In the meantime, Chinese consumer regulators have asked Tesla to improve internal management and comply with the country’s law and regulations after receiving complaints about abnormal acceleration and battery fires. The company said it would strengthen self-inspection and accepted the guidance of government departments as it ramps up production of its Model Y in its Shanghai factory.
Members of the European parliament are considering amendments to two landmark draft regulations that could see big technological companies pay for news, in an attempt to strengthen the hand of publishers against Google and Facebook. The initiative would mirror a similar move in Australia, where the two corporations have threatened to stop users from sharing news and leave the country altogether if the legislation is passed in its current form. (£)

Columns of note

Writing in The Times, Rachel Sylvester welcomes the prime minister’s new plan to overhaul the NHS and end “the attempt to put a market into the health system”. She emphasises, however, the once-in-a-generation opportunity to properly integrate the NHS and social care through parity in pay and conditions. Sylvester concludes that chancellor Rishi Sunak should agree to fund this reform and finally put social care on a stable footing. (£)
In City AM, Mark Leeson explains that  a ‘three Rs’ strategy is required to revive Britain’s high streets: (i) restart with support from global government; (ii) reboot through local innovation strategies; and (iii) rethink by filling in the gaps and looking at the experiential.

Cartoon source: The Telegraph


What happened yesterday?

London stocks gained ground on Monday, following a decline of Covid-19 cases. The FTSE 100 ended the session up 0.53% at 6,523.53, while sterling was stronger against both the dollar by 0.04% at $1.37 and the euro by 0.04% at €1.14.
Across the Atlantic, Wall Street indices closed at record highs, with the S&P 500 and the tech-heavy Nasdaq Composite rising by 0.7% and one per cent to 3,915.59 and 13,987, respectively.
In company news:
Drax gained 0.98% after the energy producer announced it was buying Canadian firm Pinnacle Renewable Energy for CAD 11.30 a share, valuing it at £226m.
Rolls-Royce fell 0.96% on news it is temporarily closing its jet engine factories for two weeks this summer amid the coronavirus pandemic.
Experian was down 0.64% after the credit-checking firm said it is carrying out an investigation following media reports of a data breach involving its Serasa business in Brazil.
Frasers Group closed 1.88% lower after it emerged the company, formerly Sports Direct, sold its entire 24.9% stake in French Connection a day before it announced it was in takeover talks with two interested parties.

What’s happening today?

Amino Technologies
Micro Focus
St. Modwen Properties


Benchmark Hlds
Tritax Euro.

UK economic announcements
(00:01) Retail Sales

Int. economic announcements
(07:00) Balance of Trade (GER)
(07:00) Current Account (GER)

Source: Financial Times

did you know

Alternative early suggestions for the term vegan were ‘vitan’, ‘dairyban’, ‘sanivore’ and ‘beaumangeur’. (source: @qikipedia)

Parliamentary highlights

House of Commons

Oral questions
Business, Energy and Industrial Strategy (including topical questions)
Ten Minute Rule Motion
Victims of Crime and Anti-Social Behaviour, Etc (Rights, Entitlements And Related Matters) – Peter Kyle
Motion to approve the Social Security benefits up-rating – Will Quince
Motion to approve the Guaranteed Minimum Pensions Increase Order 2021 – Guy Opperman
Consideration of Lords message
The Trade Bill
Backbench Business
Publication of the Integrated Review of Security, Defence, Development and Foreign Policy – Mr Tobias Ellwood, John Spellar
UK’s response to the Climate and Ecological Emergency – Caroline Lucas

House of Lords 

Lord Parker of Minsmere and Baroness Foster of Oxton
Oral questions
Impact of the COVID-19 pandemic and the subsequent restrictions put in place to address the pandemic, on those aged over 75 – Baroness Hodgson of Abinger
Ensuring people with osteoporosis have equitable and timely access to treatment – Lord Black of Brentwood
UK Overseas Territories preparedness for humanitarian and disaster relief operations – Lord Lancaster of Kimbolton
Application of online gambling stake limits following the announcement by the Gambling Commission of new protections and controls for users of online slot games – Lord Foster of Bath
Covert Human Intelligence Sources (Criminal Conduct) Bill – consideration of Commons amendments – Baroness Williams of Trafford
Counter-Terrorism and Sentencing Bill – committee stage (day 2) – Lord Stewart of Dirleton

Scottish Parliament 

Ministerial Statement: COVID-19
Environment, Climate Change and Land Reform Committee Debate: Green Recovery
Committee Announcements

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