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  • Business and finance update 14th October 2024

Business and finance update 14th October 2024

Shein shining

Good morning. Today we're talking about Shein’s UK performance, Unilever’s Russia exit and changes to workers rights.

Big Stories

Shein shining

Shein, the Chinese fast-fashion retailer, has experienced significant growth in the UK market, with sales increasing by nearly 40% to £1.5bn in the past year. This surge has put pressure on competitors such as H&M, Asos and Boohoo. Shein's rapid expansion has been fueled by its low-cost business model, which involves shipping products directly from factories in China to customers worldwide. This model allows Shein, which is considering a £50bn float on the London Stock Exchange, to avoid customs duties on low-value parcels, giving it a competitive advantage over traditional retailers. However, Shein's business practices have faced criticism from some competitors and policymakers. Concerns have been raised about the company's supply chain transparency and its potential impact on the environment and labour standards.

Unilever exits Russia

Unilever, the British multinational consumer giant, has finalised the sale of its Russian operations to Arnest Group, a local manufacturer. This decision comes after facing significant pressure to exit the Russian market following the country's invasion of Ukraine. The sale includes Unilever's four factories in Russia and its business in Belarus. Unilever Rus, which employs about 3,000 people, owns the local rights to brands including Knorr stock cubes, Dove washing and beauty products, Domestos cleaning fluids and Axe – which is known as Lynx in the UK. While the exact terms of the deal remain undisclosed, it is estimated to be worth approximately €520m. Unilever's decision to sell its Russian business aligns with the broader trend of Western companies divesting from the country in response to the war in Ukraine. This move is expected to have a minimal impact on Unilever's overall financial performance, as the Russian operations accounted for only a small portion of its global business. The sale of Unilever's Russian business marks the end of its presence in the country after over 30 years of operation.

Workers’ rights revolution

The new Labour government is proposing significant changes to employment rights, aimed at improving working conditions and protecting employees in the UK. The Employment Rights Bill includes measures such as requiring employers to grant flexible working requests from employees, unless there is a valid business reason to deny them. Employees will also be eligible for Statutory Sick Pay from the first day of illness and zero-hour contracts and unfair dismissal practices will be prohibited. The reforms are expected to have a significant impact on the UK labour market, providing greater flexibility and protection for workers. While some businesses may express concerns about the potential costs and challenges associated with these changes, the government believes that they are essential for promoting economic growth and fairness.

Elsewhere...

Cutting back: Boeing will cut 17,000 jobs - 10% of its workforce - as the US plane maker deals with various issues across its business.

Grad delays: Accounting giant EY has postponed the start dates for graduate hires as it grapples with a slowdown in business activity.

Search separation: The US government may ask a judge to force the breakup of Google’s business as it attempts to challenge the tech corporation’s monopoly over the internet search market.

Payback: Creditors of the collapsed cryptocurrency exchange FTX are poised to receive up to $16.5bn under a bankruptcy plan approved in the US.

Going to the bank: Hundreds of employees of the digital bank Monzo are being given the opportunity to sell part of their stakes in the company as its valuation soars to £4.5bn.

Loop Likes

Number of the Day

$2.3 billion

How much pharmaceutical giant GSK has agreed to pay in the United States to put an end to 80,000 lawsuits alleging that its heartburn drug caused cancer.

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