Charlotte Street Partners

DAILY BRIEFING

DAILY BRIEFING

Retail, reinvented

Written by Li-Ann Chin, associate 
Edited by David Gaffney, partner
25 May 2021

Good morning,

Selfridges & Co was established in the early 1900s by American-British magnate Harry Gordon Selfridge, who had always loved a party and putting on a show.
 
A little more than a century later, the iconic department store is paying tribute to its merrymaker founder, with a license to host wedding ceremonies this summer in its grade two listed building on Oxford Street.
 
It’s no secret that the pandemic has accelerated a shift to digital retail. Boohoo, an online fashion group, reported a 41% jump in full year revenues to £1.74bn, despite being dogged by a supply chain scandal involving labour abuses and poor working conditions at its Leicester factories. Selfridges, in contrast, was forced to shed around 14% of its headcount last July, as sales fell significantly in 2020.
 
The creation of a wedding suite hints at Selfridges’ plans to reinvent itself and offer new and unusual experiences to its customers, with a range of bespoke wedding packages. Selfridges also intends to offer floristry workshops, out-of-hours children’s parties in the toy department, and private screenings at the cinema.
 
Research conducted on the future of retail has indicated that it will very much be about customer experience, which to a large extent requires personal, human communication and connection. Experiential retail and immersive shopping experiences, as seen with Selfridges’ new business plans, are increasingly considered essential ways to drive brand awareness and consumer engagement.
 
A global survey of 22,000 consumers reveals that almost 100% would be returning to physical stores post Covid-19. Shoppers are desperate for experiences that satisfy their needs for social interaction and physical touch. Traditional brick and mortar stores may be under pressure, but experiential pop-up stores, kiosks and live shopping shows may well become the norm in the next decade. Indeed, it would seem that businesses equipped to engage customers using a combination of physical and online channels are set to emerge as winners.
 
As the managing director of Selfridges, Anne Pitcher, said: “The years beyond [this pandemic] will be about reinventing retail, nothing less. Stores will be different forever.”
 
We had best prepare for more unexpected unions in the bagging area.

News

The UK government has instructed airlines to avoid Belarusian airspace after a Ryanair flight was diverted to Minsk and dissident journalist Roman Protasevich removed from the plane and arrested. Foreign secretary Dominic Raab confirmed that further sanctions are being considered against Belarusian president Alexander Lukashenko’s regime and that the country’s ambassador in London has been summoned so that the UK could convey its “condemnation of these acts.”
 
Downing Street has signalled that the UK public will have to wait longer for prime minister Boris Johnson to unveil plans for the country to exit lockdown, as a result of rising case numbers of the Indian variant of Covid-19. The prime minister had previously promised to provide details by the end of May. A spokesperson for No. 10 has cited the need to gather as much data as possible for the timetable delay.
 
The UK government’s coronavirus restrictions website has reportedly changed its guidance over the last few days for residents living in the eight areas most affected by the Indian Covid-19 variant, including Bolton, Blackburn, Leicester and others. People have been advised to avoid traveling into and out of these hotspots, unless for essential reasons, but no official announcement has been made, which has led ministers to call for urgent clarification over said changes.

Business and economy

Home secretary Priti Patel used a keynote speech at an event yesterday to accuse those who obstruct immigration removals of protecting rapists and murderers. Patel’s speech came days after hundreds of local residents and Scottish politicians protested against a contentious immigration in Glasgow. The attempted raid on 13 May – the holy Muslim festival of Eid-al-Fitr – had previously created tension between the Westminster and Holyrood governments over accusations that it had been insensitively timed.
 
The media watchdog Ofcom has written to the BBC urging the national broadcaster to take on independent expertise as part of its review of its editorial policies and governance following the Martin Bashir scandal. An internal review into its workplace culture and editorial practices was launched by the BBC yesterday. Ofcom has called for findings from that review to be published once concluded to ensure the utmost transparency.
 
According to new analysis of planning policy, nearly 400,000 homes will be built on greenfield sites in the South of England over the next five years. Cornwall, for example, would have to build more than 11,000 homes and areas such as Buckinghamshire and Central Bedfordshire will have to create at least 10,000 plots each. These figures have reignited concerns amongst Conservative back benches that the planning bill flies in the face of the government’s levelling-up ambitions and will simultaneously lead to a huge loss of greenfield sites. (£)

Columns of note

Last week, prime minister Boris Johnson hailed the “massive opportunity” of a tariff-free trade agreement with Australia,  that would reportedly leave Scottish and Welsh farmers struggling to compete with cheaper imports. In this piece, the Financial Times editorial board reflects on the potential ramifications of the deal on the fragile state of the union. (£)
 
The last few days have not been particularly smooth sailing for the BBC. Writing in The Guardian, Simon Jenkins argues that despite its faults, the BBC’s capacity for critical journalism ought not to be forgotten.

Cartoon source: The New Yorker

Markets

What happened yesterday?

London stocks ended in the black on Monday, following two weeks of drops, as a result of a weekend of Covid restrictions being eased which, in turn, helped to boost consumer-related equities.
 
The FTSE 100 was ahead 0.48% at 7,051.59, while the domestically focused FTSE 250 index added 84.31 points to close at 22,488.73. Across the Atlantic, the S&P 500 rallied as it added 41.19 points to close at 4,197.05. The Nasdaq 100 Index similarly gained 1.72%, finishing at 13,641.75.
 
Sterling put in a mixed performance, last trading flat on the dollar at $1,4150, as it fell 0.24% against the euro priced at €1.1589.
 
In terms of cryptocurrencies, Ether (ETH) was last trading around $2,656.91 as of 7:45 am BST, while Bitcoin (BTC) gained 8.66% over the last 24 hours to trade at $38,794.06.
 
Heavyweight oil stocks performed well as oil prices extended last Friday’s rally and edged higher after Iran confirmed that gaps remained in negotiations aimed at reaching an agreement to end US sanctions on its crude. Gold futures increased 0.4% to $1,886 an ounce.

In company news:

Professional services firm EY has told its UK staff they should expect to spend at least two days a week working from home post-pandemic, with the rest of their time split between the office and client sites.
 
Tech giant Amazon is reportedly nearing a deal to acquire MGM studios, owner of the “James Bond” franchise and other TV and film series, for between $8.5 billion and $9 billion. The deal is expected to be announced this week.
 
Battersea Power Station reportedly welcomed its first residents yesterday evening, 35 years after the iconic South Bank building was commissioned.

What’s happening today?

Finals
Aveva Group
Big Yellow
Calnex Solutio.
Electrocomponents
Helical Bar
Hurricane Energ
Speedy Hire
Warehouse Reit

Interims
Avon Rubber
Greencore
Ixico
Shaftesbury

AGMs
Aeci 5 1/2 Prf
Air China
Aston Martin Lagonda
Bk. Cyprus Hldg
Bank Of Georgia Group
Bank Of Ireland
Crossword Cybersecurity
Empiric
Epwin Grp
Georgia Capital
Harworth Gp
Hill & Smith
Logistics Dev
Mortgage Ad
Mortgage Ad
Phosagro S
Portmeirion
Restaurant Gp
Riverstone Energy
Yew Grove Reit.

EGMs
Yew Grove Reit.

GMs
Marlowe

UK economic announcements
(09:30) Public Sector Net Borrowing

Int. economic announcements
(07:00) Gross Domestic Product (GER)
(09:00) IFO Business Climate (GER)
(09:00) IFO Expectations (GER)
(09:00) IFO Current Assessment (GER)
(14:00) House Price Index (US)
(15:00) New Homes Sales (US)

Source: Financial Times

did you know

Never one to miss a bit of publicity, Harry Gordon Selfridge had a seismograph installed in the Oxford Street flagship store for several years in the 1930s, which managed to pick up readings from several earthquakes around the world. Today, the seismograph can be viewed on display at the British Museum.

Parliamentary highlights

House of Commons

Oral questions
Business, Energy and Industrial Strategy (including Topical Questions)
 
Legislation
Telecommunications (Security) Bill: Remaining Stages

House of Lords 

Oral questions
Various
 
Legislation
Professional Qualifications Bill [HL] – second reading – Lord Grimstone of Boscobel

Scottish parliament 

No business scheduled

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