WPP axes 3500 jobs as new boss vows to simplify ad giant. WPP (WPP) chief executive Mark Read on Tuesday admitted that the business had become “unwieldy” as he set out a “radical evolution” to bring it to heel, a plan that will cost £300 million and lead to 3500 job cuts. Industry criticism of WPP under Sir Martin Sorrell had it that the company was so sprawling that it was frequently competing with itself for trade. Read on Tuesday confirmed that diagnosis, saying the ad giant was “too unwieldy, with too much duplication… as a result, it is not always as focused or as fleet of foot as it needs to be”. The £300 million cost over three years will pay for property closures and redundancies. The 3500 jobs will be lost from a total of 134,000 in 110 countries. Around 1000 new jobs, probably in digital roles, will be created, and acquisitions are on the agenda.
Tools rental firm Ashtead Group (AHT) stamped on fears of a possible US recession on Tuesday, saying it had seen no evidence of a slowdown as it upped profit forecasts. The FTSE 100 company has seen its shares crash by a third since October because of forecasts of a possible recession in the US, where Ashtead makes 90% of its money. Today strong rental sales growth and a rosy outlook allayed some of the concerns. Chief executive Geoff Drabble, who is leaving next year, said there were no prospects of an American recession in the next three years. “The whole financial world thinks there is impending doom in North America and the evidence on the ground and our lead indicators could not be further from that. “Go around America. We could list hundreds of jobs of datacentres, Hudson Yards, LaGuardia airport, that are one or two years into five-year projects. That work just doesn’t suddenly stop. You have to think outside a spreadsheet.”
Households are lifted by highest growth in pay for more than 10 years strengthening case for rate rise. The highest pay growth for more than a decade has put household finances in their best shape since 2016, official figures showed today. The Office for National Statistics’ latest labour market figures showed pay growth of 3.3% in the quarter to October, the best since June 2008. Adjusting for inflation, real-terms pay is rising at 1%, the highest since December 2016, before the pound’s post-referendum slump bit into incomes. In October alone, pay was 3.5% ahead of a year earlier. While rising pay will concern the Bank of England’s rate-setters, it will encourage retailers hoping for a Christmas boost on the High Street.
Carpetright says negative headlines damaged sales. The boss of Carpetright (CPR) on Tuesday claimed negative headlines about the embattled retailer had knocked sales as it posted widening losses. Chief executive Wilf Walsh, who is trying to turn its fortunes around, said: “I can’t point the finger at the media. We did have two profit warnings, but the customers see the headlines.” He argued that shoppers, who often have to pay a deposit for the wares, have been put off by doubts over Carpetright’s future. Similarly, the boss of struggling Mothercare, Mark Newton-Jones, blamed the media last month for its slump in sales. Carpetright’s half-year losses widened to £11.7 million for the six months to October 27, from £600,000 in the previous half. It closed 65 stores of the 81 earmarked this year after striking a deal with creditors and landlords to prevent it from going bust.
Tesco (TSCO), Sainsbury (J) (SBRY) and Morrison (Wm) Supermarkets (MRW) on Tuesday pinned their hopes on last-minute Christmas shopping to boost their coffers as it emerged fewer shoppers had visited their stores in recent weeks. Three of the four biggest grocers lost market share to rivals as they entered the crucial trading period, according to Kantar’s latest industry figures. Tesco dipped to 27.6% in the 12 weeks to December 2 from 28.2% the year before. Sainsbury’s fell from 16.4% to 16%, while Morrisons edged down from 10.6% to 10.5%. Asda’s market share was flat. Tesco, Sainsbury’s and Waitrose saw sales drop 0.1%, 0.2% and 0.7% respectively. Co-op and German discounters Aldi and Lidl continued to grab market share. Giles Hurley, boss of Aldi UK, said: “We enter the Christmas trading period with great momentum as the UK’s fastest-growing supermarket.”
Ex-Sainsbury’s boss Justin King takes M&S role. Former Sainsbury’s boss Justin King on Tuesday said he will join Marks & Spencer Group (MKS) as a non-executive director, a week after he stepped back from his full-time role at Terra Firma. King, a City grandee credited with turning around Sainsbury’s during his decade-long tenure, will join M&S chairman and fellow retail heavy-weight Archie Norman and chief executive Steve Rowe in January. M&S has been revamping its top team to turn its fortunes around, under the close watch of Norman, credited with reviving supermarkets chain Asda in the Nineties. M&S’s sales have been suffering as cheaper rivals have piled on the pressure and shoppers have migrated online.
Sir Philip Green and Mike Ashley hurt by Mysale Group (MYSL) profit warning. Billionaire retail tycoons Mike Ashley and Sir Philip Green were on Tuesday left nursing millions of pounds worth of paper losses after MySale, the online fashion retailer they back, issued a profit warning. AIM-listed MySale said tax changes in Australia, and the disruption that caused in the online market, led to more discounting amid higher competition in the second quarter. It expects full-year profits and revenues to come in “significantly” below the A$15 million (£8.5 million) and $295 million analysts had been expecting. Boss Carl Jackson called it a “short-term dip” and plans are under way to reduce costs.
