BUSINESS LIVE: Consumer confidence boost; BHP faces multi-billion-pound court claim; Superdry losses widen

He’s the East End boy who became one of Britain’s richest men in a rags-to-riches story that included the acquisition of Tottenham Hotspur, a beauty queen girlfriend less than half his age and a sprawling business empire.

But the downfall of Joe Lewis was complete when he pleaded guilty to insider trading at a Manhattan federal courthouse on Wednesday.

Investment in Vodafone by the United Arab Emirates is a security risk, the Government has declared.

Deputy Prime Minister Oliver Dowden said the near-15 per cent stake held by state-controlled Emirates Telecommunications poses a threat to Britain given Vodafone’s work with Government departments and its influence on the UK telecoms industry.

John Coldham, co-head of the retail sector (UK) at Gowling WLG:

‘Although the retail sector continues to battle ongoing challenges with households limiting their spending and rising overheads, WH Smith’s dominance at railway stations and airports remains unabated with a lack of competition.

‘The retailer’s high street stores may not be thriving, similar to many others in the sector, but the success of its travel arm has led to the company opening franchises in hospitals across the UK as well to enhance its growth.

‘This is a savvy move as like its stores at travel hubs, it will provide guaranteed footfall as a necessity for patients and visitors alike with few other retail options to choose from.

‘Internationally, the business is continuing to perform well and shareholders will be keen to see this progress, especially as profits are reinvested and it uses the UK as a template for its other regions.’

WH Smith sales rose 8 per cent year-on-year in the 20 weeks to 20 January as the retailer was boosted by resilient travel demand.

The upswing in footfall at train stations and in airports has brought brisk business, with Travel UK, the company’s largest division, posting a revenue increase of 15 per cent for the period.

Boss Carl Cowling said:

‘The Group is trading well and is in its strongest ever position as a global travel retailer. We are confident of another year of significant growth in 2024.’

Fashion house LVMH celebrated a Christmas sales rise.

The bumper festive quarter helped the group cash in record sales and profits for 2023 but there were worrying signs that demand for luxury goods has wavered.

Superdry finance boss Shaun Wills will step down at the end of March after the struggling fashion retailer reported a wider half-yearly loss.

The group blamed unusual weather and the cost-of-living crisis for an adjusted pre-tax loss of £25.3million for the six months to 28 October, up from a £13.6million loss last year.

Superdry has named Giles David as its interim CFO, effective 29 January.

Julian Dunkerton, founder and chief executive, said:

‘This has clearly been a difficult period for Superdry. A challenging consumer retail market, set against a backdrop of macroeconomic uncertainty and some remarkably unseasonal weather conditions have all combined to weaken the financial performance of the Group.

‘These macro and external factors have been further exacerbated by the underperformance of our Wholesale segment. Whilst, to some extent, this was expected due to the decision to exit our US operations and the sale of the brand rights in non-core territories, the segment continues to prove challenging.’

BHP Group’s Brazilian unit will review a decision from the Federal Court of Brazil regarding a 155 billion Brazilian real (£24.8billion) Federal Public Prosecution Office claim over the 2015 collapse of the Fundao dam owned by Samarco.

The group told investors this morning:

‘BHP Brasil has not been served with a decision by the Court and will review the decision to assess its implications, the potential for an appeal and any potential impact to the Group’s provision related to the Samarco dam failure.

‘BHP Brasil is fully committed to supporting the extensive ongoing remediation and compensation efforts in Brazil through the Fundação Renova, which is a not-for-profit, private foundation that was established following the Fundão tailings dam failure to implement 42 remediation and compensatory programs in Brazil. ‘

European Central Bank (ECB) chief Christine Lagarde yesterday insisted that talk of interest rate cuts was ‘premature’ even as storm clouds gathered over Germany, its largest economy.

The ECB left rates on hold at 4 per cent and did little to substantiate expectations that it will cut rates five times this year.

UK consumer confidence has strengthened to its highest level since January 2022, boosting optimism over Britain’s economic prospects over the next 12 months, according to the closely-watched GfK Consumer Confidence Index.

Linda Ellett, the UK head of consumer, retail and leisure markets for KPMG, said: ‘While inflation and interest rates are gradually reducing, prices are still increasing and consumers are seeing costs still going up.

‘Many people still face the prospect of large jumps in their mortgage when their fixed deal ends this year. And even more face higher costs for the likes of insurance premium renewals, or in-contract increases for mobile and broadband provision.

‘Household spending power is still gradually being eroded and in this environment it is little surprise to see that there is limited appetite for spending dwindling savings on major purchases, except perhaps – for those who can afford to – to temporarily take a break from it all on holiday.

‘In KPMG research, households feeling worse about their financial security outnumber those feeling more secure by almost two to one.’