5th August 2021
Good morning This weekend marks the final couple of days of the Summer Olympic Games. After finishing 2nd in Rio 2016 and 3rd in London 2012, Team GB is set to fight it out for 4th place on the medal table with Australia and the Russian Olympic Committee. Go Team GB!
- Retail empire boss to step down
- 191 companies named and shamed for not paying minimum wage
Yesterday's market moves
FTSE 100 -0.1% 7,120
FTSE 250 +0.7% 23,506
Markets held their nerve as investors weighed the threat to the global recovery from the spread of the Delta variant of Covid-19 and the likely timing of a reduction in central bank support.
The Bank of England voted unanimously to leave interest rates at a historic low of 0.1%. But the Bank signalled that “modest tightening” of policy was likely over the next couple of years to keep inflation, expected to rise to 4% (double the target) towards the end of 2021, in check as the UK economy recovers strongly post-pandemic.
Retail empire boss to step down
What’s going on?
Mike Ashley, CEO of Frasers Group and the founder of Sports Direct, is handing over his role to Michael Murray – his future son-in-law. The transition is set to be complete in May 2022.
Why is this important?
Along with Sports Direct, Frasers owns a number of high street brands including House of Fraser, Jack Wills and Flannels.
Since opening the first Sports Direct store in 1982, Ashley has gone on to grow one of the largest retail operations in the UK. In recent years he’s acquired struggling names like Game and Evans Cycles. The group is now worth around £3bn and has almost 1,000 shops.
Ashley, often described as “colourful” by the business press, is not your typical C-suite exec. For example, he was accused of running Sports Direct like a Victorian style workhouse by a parliamentary inquiry. And he allegedly hosted a management meeting in a pub where he drank 12 pints and vomited into a fireplace.
The transition to Murray has raised eyebrows both inside and outside Frasers. Murray is 31 years-old and engaged to Ashley’s daughter. Murray, a former club promoter, has worked in the group since 2016, first providing property consulting services that netted him £15m in fees.
Recently he has led the revamp of Sports Direct stores as well as improving the group’s use of technology and building relationships with high-end brands.
The news represents a significant changing of the guard and comes as the group reported an 8.4% fall in half-year sales to £3.6bn. Investors will be hoping Murray can revitalise Frasers and appeal to younger consumers.
191 companies named and shamed for not paying minimum wage
Yesterday the government named 191 companies for paying workers less than the minimum wage. The national minimum wage for over 23s is currently £8.91 per hour.
After investigations by HMRC it was found that 34,000 employees were underpaid a total of £2.1m.
Department store John Lewis was the biggest offender, failing to pay nearly £1m to more than 19,000 workers. High street retailers McColls and Body Shop also made the list.
The breaches took place between 2011 and 2018 and the shamed employers have since been made to pay back what they owed plus a fine of £3.2m.
Companies have criticised the government for making minimum wage laws overly complex. The government had suspended naming firms between 2018 and 2020 after complaints from businesses that they were unfairly penalised for falling foul of unclear official guidance.
But the Business Minister said that it wanted businesses to be "named and shamed" even where errors were unintentional.
Stat of the day
UK adults watched 5hr 40m per day of TV/online content in 2020
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