EQ Weekly Roundup 13-6-18

This week’s roundup includes news that discount retailer Poundworld has collapsed into administration, Land Rover is to move production of its Discovery model outside the UK and World Cup sponsorship value has dropped for this year’s tournament.

This week’s roundup includes news that discount retailer Poundworld has collapsed into administration, Land Rover is to move production of its Discovery model outside the UK and World Cup sponsorship value has dropped for this year’s tournament. 

Poundworld collapses into administration

Discount retailer Poundworld has appointed administrators, putting 5,100 jobs at risk.

The move came after talks with a potential buyer, R Capital, collapsed leaving Poundworld with no option other than administration.

Poundworld, which serves two million customers a week from 335 stores, also trades under the ‘Bargain Buys’ name.

Administrators Deloitte have stressed the stores will continue to trade as normal with no redundancies at this time.

Clare Boardman, joint administrator at Deloitte, said: “The retail trading environment in the UK remains extremely challenging and Poundworld has been seeking to address this through a restructure of its business. Unfortunately, this has not been possible.”

She said Deloitte believed a buyer could be found for the business, or at least part of it.

Land Rover moves Discovery production out of UK

Jaguar Land Rover (JLR) has said it will move production of its Land Rover Discovery SUV from the West Midlands to Slovakia from next year.

The Solihull factory, where the Discovery is manufactured, will be used to build a new generation of Range Rover models instead, the firm announced. However, it also warned there may be some job losses in the UK as a result.

JLR – owned by the Indian group Tata Motors – said that it remained “committed to the UK”.

It has not put an exact figure on the level of investment in the Solihull plant, but it runs into hundreds of millions of pounds.

In a statement JLR said: “The potential losses of some agency employed staff in the UK is a tough one but forms part of our long-term manufacturing strategy as we transform our business globally.”

There are 1,800 agency workers in the Solihull plant, out of a workforce of 10,000.

World Cup sponsorship value drops

The value of World Cup sponsorship has dropped between the 2014 event in Brazil and this year’s in Russia, according to Nielsen Sports’ research.

Fifa sponsor revenue fell from $1,629m (£1,214m) to $1,450m between events.

Global market research firm Nielsen says the 2015-18 sponsorship cycle had been “a tougher sell” than for the previous two World Cups.

“But a new crop of sponsors, including several from China, helped Fifa weather the storm,” the report added.

Chinese sponsors stepped into the breach after a number of long-term Fifa backers, such as Johnson & Johnson, Castrol and Continental, ended their association after the corruption scandal at football’s world governing body in May 2015.

Currently, three of the 2018 tournament’s official five sponsors, namely TV and fridge maker Hisense, smartphone developer Vivo, and dairy firm Mengniu, are Chinese.

UK growth struggles as manufacturing dips

The economic “bounce-back” expected by the Bank of England is struggling to materialise, according to a leading economic forecaster.

The National Institute for Economic and Social Research (NIESR) said growth between March and May was just 0.2%,

The Office for National Statistics’ official figures put growth at 0.1% for the first three months of the year.

Amit Kara, head of macro-economic forecasting at NIESR, said “Economic growth has slowed materially since the start of this year.

“The latest data also shows a notable slowdown in manufacturing sector output that appears to be driven by both domestic and external conditions. By contrast, the retail sector and the dominant services sector may be recovering.

“Looking ahead, we expect the economy to strengthen from here mainly because monetary policy in the UK and elsewhere continue to remain accommodative.

“The risks to that outlook are, however, weighed to the downside. The most important of these remains Brexit but there are others, most notably an escalation of tensions in international trade and a potential flare-up in uncertainty in the Euro area because of political developments in Italy.”