Halfords predicts bicycle boom to continue for 2020

Halfords expects strong demand for bikes to continue for the rest of the year after reporting a 57% rise in cycling-related sales during the coronavirus pandemic.

A desire to avoid public transport, as well as generally favourable weather conditions and a switch to cycling as a leisure activity during the UK lockdown, not only boosted sales of bikes but also demand for servicing. Sales surged nearly 42% at the company’s bicycle repairs and overhaul service in the 13 weeks to 3 July as the nation dusted off some of the estimated 7m old bikes resting in sheds and garages. Sales of electric bikes and scooters doubled.

Halfords said a government plan to hand out £50 vouchers for bicycle repairs, expected to be launched in the next few weeks, as well as a continued desire to avoid public transport will keep the cycling boom going. The company also said it expected a shift towards commuter bikes, as people return to work and the number of cycle lanes increases under the government’s £2bn investment plan.

Graham Stapleton, the chief executive of Halfords, said the retailer, and the rest of the industry, was struggling to keep up with unprecedented demand. Halfords is importing 100,000 bikes in the coming weeks as it tries to improve availability by shipping stock in from Europe as well as its usual sources in Asia.

He said: “This is not a normal demand curve. We are still not able to meet full demand from the market but week on week it is getting better. There is absolutely no evidence at all that we can see that the cycling trend won’t continue. Sales remain very strong.”

He said that in cities, where it is often not possible to make short journeys by car because of congestion and limited parking, and it is also currently difficult to use public transport because of the need for social distancing, bikes were becoming an essential rather than a discretionary purchase.

The trend for two-wheeled transport delivered a better than expected performance for Halfords in the three months to 3 July but did not fully offset the fall in demand for car parts as many vehicles remained parked up during the lockdown.

Group sales fell 6.5% at established stores in the period as motoring revenue dived 45.4% and trade at Halfords’ established Autocentre car servicing outlets slid 19%.

Online sales soared 200% year on year, helping offset a short period of closure at most stores, with some outlets still only partially open because of the need for social distancing.

The company warned it could fall to a £10m loss in the year ahead if overall falls in sales worsened to 9.5% and it continued to be more reliant on cycling-related trade, which is less profitable and more capital-intensive than motoring. In a best-case scenario the company said underlying profits could hit £20m, down from £53m in the year to April when sales remained stable at £1.1bn.

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Boohoo to investigate use of Leicester factory with ‘unacceptable’ conditions

Online fashion retailer Boohoo has pledged to investigate how its clothes came to be made by a Leicester garment factory where workers were paid just £3.50 an hour in conditions that allegedly put them at greater risk of catching Covid-19.

Shares in the company slumped by 9% in early trading on Monday morning, the first day since revelations about its supply chain came to light.

Boohoo, which owns brands such as Pretty Little Thing and Nasty Gal, said conditions at the Jaswal Fashions factory in Leicester were “totally unacceptable and fall woefully short of any standards acceptable in any workplace”.

Boohoo booms as Leicester garment factories are linked to lockdown

Sales of clothes made by suppliers in Leicester have helped fuel rapid growth that could put its bosses in line for bonuses worth £150m as part of a three-year bonus scheme.

But Boohoo, which has enjoyed surging sales during the pandemic, as locked down shoppers browsed for clothes online, said it was not sure who was supplying them.

“Our early investigations have revealed that Jaswal Fashions is not a declared supplier and is also no longer trading as a garment manufacturer,” it said in a statement to investors in the company, which floated on the stock market in 2014.

“It therefore appears that a different company is using Jaswal’s former premises and we are currently trying to establish the identity of this company.

“We are taking immediate action to thoroughly investigate how our garments were in their hands, will ensure that our suppliers immediately cease working with this company, and we will urgently review our relationship with any suppliers who have subcontracted work to the manufacturer in question.”

It comes after an undercover reporter for the Sunday Times found staff being paid as little as £3.50 an hour in the factory, even though the minimum wage in Britain for those aged 25 and over is £8.72.

Priti Patel, the home secretary, asked the National Crime Agency to investigate modern slavery in Leicester’s clothing factories last week, after whistleblowers raised the alarm about conditions in the city’s industry.

Leicester has been the site of a localised coronavirus outbreak, with cramped conditions and lax safety measures in garment factories thought to have played a role in transmission of the virus.

Boohoo had previously said that none of its suppliers had been affected.

On Monday, the company said: “We are keen and willing to work with local officials to raise standards because we are absolutely committed to eradicating any instance of non-compliance and to ensuring that the actions of a few do not continue to undermine the excellent work of many of our suppliers in the area, who provide good jobs and good working conditions.”

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I left my heart in the Luton airport branch of Bella Italia …

The Covid-19 era has been a sensitive time for the high street. To a roll of honour that includes TM Lewin, Monsoon Accessorize, Le Pain Quotidien, Warehouse, Victoria’s Secret, Cath Kidston and Laura Ashley, we must now add Café Rouge and Bella Italia, which went into administration last week. These brands won’t all vanish entirely. Some have been bought out of administration with the hope of saving the profitable parts, but many will be slips of their former selves – an alarming thought in the case of Victoria’s Secret.

Some of these businesses were already at risk, thanks to a combination of rates and rents, Brexit, Deliveroo and Amazon. There’s no shame in going out to coronavirus, and you might argue it’s better for some of them in the long run.

At this point it’s easier to try to work out which will be the last high street businesses standing. My money is on Greggs, Timpson, and Games Workshop, which is now worth more than British Gas. Unless you’re selling key items such as sausage rolls, keys or plastic elves, the retail reaper is on his way.

My daughter was born just before lockdown, and while I wouldn’t say I was necessarily looking forward to taking her to Café Rouge, I had hoped we might be able to walk past and peer in, in the same way I plan to point out interesting graves.

“When I was your age this was the height of sophistication,” I would say, gazing in at the peeling rattan furniture. “Café is French for ‘cafe’, and rouge is French for ‘red’, so this meant ‘red cafe’. You could get a baguette with warm lettuce and chargrilled chicken slivers for just £12.45. Frites were extra. Frites is French for chips.”

Now I wonder whether the high street will seem like a relic of a past era, a mysterious place where fathers could still pop out on Christmas Eve to buy a foot spa.

“Dada, what’s a TM Lewin?” my daughter will ask, looking up wide-eyed from her history book. “Well,” I’ll say, “it was a shop where you’d go to get four superficially presentable office shirts for £100.”

“What’s an office?”

“It’s where you’d go to do your job. It was also the name of a shoe shop.”

“What’s a job?”

“Well, before King Mike Ashley granted Mummy and Daddy this strip of land to toil, we would go to a little room and sit at a computer while we waited for the pub to open.”

“What’s a pub?”

“Oh yes, sorry. Pub is the old word for Wetherspoons.”

It’s easy to mock the high street brands, but they became chains for a reason. Once upon a time, they offered something exciting. I loved Byron when it opened. Notting Hill types can be snooty about Monsoon, but in market towns around Britain it’s a byword for exotic chic. These chains also set a base level of quality. Bella Italia is no Padella, but the point is that with a Bella Italia around, every new pasta restaurant must be at least as good.

Restaurant closures tend to sting more because they are the setting for meaningful events. I’ve never been dumped in Oak Furnitureland, and now I never will be. It’s telling that the moment Prince Andrew lost the British public was when he brought up Pizza Express. You can abuse your position as a prince of the realm, conduct nefarious relationships and be a laughably ineffectual trade negotiator, but woe betide the minor royal who drags La Reine through the mud. As an alibi, Woking was compelling because it was relatable. We could all imagine Pizza Express in Woking, even if we’d never been. It was also oddly plausible. No self-respecting royal would be seen in a KFC or Nando’s, but Pizza Express? Perhaps he was one of us after all. (He was not.)

Like everything else in this rainy, class-obsessed isle, high-street shops and restaurants are as much about belonging as commerce, which is why we take them so seriously. The most memorable fact in the Salisbury poisonings was the fateful trip to Zizzi; a sign that this crime had truly penetrated to the heart of middle England.

Few things provoke national terror like the suggestion that John Lewis or M&S might be in trouble. Woolworths was practically given a state funeral. We feel the loss of these places, even if we hadn’t been for years. Cut us and we all bleed Rouge.

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Harveys falls into administration with loss of 240 jobs

The Harveys furniture chain has gone into administration with the immediate loss of 240 jobs and putting more than 1,300 others at risk.

Administrators from PwC are seeking a buyer for the retailer including about 20 stores and its three manufacturing sites.

Major job cuts announced so far

The coronavirus lockdown has prompted some of the UK’s most prominent companies to announce large-scale job losses. The aviation, automotive and retail sectors have been among the worst hit, as businesses adjust to dramatically reduced revenue projections.

While the government’s job retention scheme has so far protected millions of jobs, fears are mounting that unemployment will rise as the scheme begins to be phased out from August.

Since lockdown began on 23 March, some of the UK’s largest companies have announced plans to cut a total of 60,000 jobs globally, many of which will fall in the UK.

Rolls-Royce – 9,000 jobs
The jet-engine manufacturer has confirmed that 3,000 job cuts, of a planned 9,000 worldwide, will be made in the UK. In May Rolls-Royce said it would make the first round of redundancies through a voluntary programme, with about 1,500 posts being lost at its headquarters in Derby, as well as 700 redundancies in Inchinnan, near Glasgow, another 200 at its Barnoldswick site in Lancashire, and 175 in Solihull, Warwickshire.

BP- 10,000 jobs
The oil company said in June it plans to make 10,000 people redundant worldwide, including an estimated 2,000 in the UK, by the end of the year. The BP chief executive, Bernard Looney, said that the majority of people affected would be those in office-based jobs, including at the most senior levels. BP said it would reduce the number of group leaders by a third, and protect the “frontline” of the company, in its operations.

Centrica- 5,000 jobs
The owner of British Gas announced in June that it intends to cut 5,000 jobs, mostly senior roles, and remove three layers of management, in a bid to simplify the structure of its business. The energy firm has a total workforce of 27,000, of whom 20,000 are in the UK.

Bentley- 1,000 jobs
The luxury carmaker intends to shrink its workforce by almost a quarter, slashing 1,000 roles through a voluntary redundancy scheme. The majority of Bentley’s 4,200 workers are based in Crewe in Cheshire.

Aston Martin Lagonda – 500 jobs
The Warwickshire-based luxury car manufacturer has announced 500 redundancies.

British Airways – 12,000 jobs
The UK flag carrier is holding consultations to make up to 12,000 of its staff redundant, a reduction of one in four jobs at the airline. BA intends to cut roles among its cabin crew, pilots and ground staff, while significantly reducing its operations at Gatwick airport.

Virgin Atlantic – 3,000-plus jobs
Richard Branson’s airline is to cut more than 3,000 jobs, more than a third of its workforce, and will shut its operations at Gatwick.

EasyJet – 4,500 jobs
The airline has announced plans to cut 4,500 employees, or 30% of its workforce.

Ryanair – 3,000 jobs
The Irish airline intends to slash 3,000 roles and reduce staff pay by up to a fifth.

Aer Lingus – 900 jobs
The Irish airline, part of International Airlines Group (IAG) plans to cut 900 jobs.

P&O Ferries – 1,100 jobs
The shipping firm intends to cut more than a quarter of its workforce, a loss of 1,100 jobs. The company, which operates passenger ferries between Dover and Calais, and across the Irish Sea, as well as Hull to Rotterdam and Zeebrugge, will initially offer employees voluntary redundancy.

JCB – 950 jobs
Digger maker JCB said in May up to 950 jobs are at risk after demand for its machines halved due to the coronavirus shutdown.

Ovo Energy – 2,600 jobs
Britain’s second biggest energy supplier announced in May it planned to cut 2,600 jobs and close offices after the lockdown saw more of its customer service move online.

Johnson Matthey – 2,500 jobs
The chemicals company said in June it is planning to make 2,500 redundancies worldwide over the next three years. The move will affect 17% of the workforce at the firm, which is a major supplier of material for catalytic converters.

Bombardier – 600 jobs
The Canadian plane maker will cut 600 jobs in Northern Ireland, as part of 2,500 redundancies announced in June.

The Restaurant Group – 1,500 jobs
The owner of Tex-Mex dining chain Chiquito, and other brands including Wagamama and Frankie & Benny’s, said in March that most branches of Chiquito and all 11 of its Food & Fuel pubs would not reopen after the lockdown, leading to the loss of 1,500 jobs.

Monsoon Accessorize – 345 jobs
The fashion brands were bought out of administration by their founder, Peter Simon, in June, in a deal which saw 35 stores close permanently and led to the loss of 545 jobs.

Clarks – 900 jobs
Clarks plans to cut 900 office jobs worldwide as part of a wider turnaround strategy

Oasis and Warehouse – 1,800 jobs
The fashion brands were bought out of administration by restructuring firm Hilco in April, in a deal which led to the permanently closure of all of their stores and the loss of more than 1,800 jobs.

Debenhams – 4,000 jobs
At least 4,000 jobs will be lost at Debenhams as a result of restructuring, following its collapse into administration in April, for the second time in a year.

Mulberry – 470 jobs
The luxury fashion and accessories brand said in June it is to cut 25% of its global workforce and has started a consultation with the 470 staff at risk.

Jaguar Land Rover – 1,100 jobs
The car firm is to cut 1,100 contract workers at manufacturing plants the UK, potentially affecting factories at Halewood on Merseyside and Solihull and Castle Bromwich in the West Midlands.

Travis Perkins – 2,500 jobs
The builders’ merchant is cutting 2,500 jobs in the UK, accounting for almost a 10th of its 30,000-strong workforce. The company, which is behind DIY retailer Wickes and Toolstation, said the job losses will affect staff in areas including distribution, administrative roles and sales. The move will also affect staff across 165 stores that are now earmarked for closure.

All its stores will continue to trade for now, but industry watchers believe a buyer is unlikely to be found. The retailer has been struggling for years and is also heavily reliant on sister chain Bensons for Beds with which it shares several sites.

Bensons was also put into administration on Tuesday, but has been bought out in a pre-arranged deal by its private equity owner Alteri Investors, with the aim of saving between 150 and 175 of the chain’s 242 stores, its Huntingdon manufacturing operation and nearly 1,900 jobs.

The buyout involves new investment of £25m into Bensons by Alteri. All current Harveys and Bensons’ orders will be honoured by the ongoing business.



Zelf Hussain, joint administrator at PwC, said: “The group had been facing increasingly challenging trading conditions in recent months, in particular the Harveys furniture business. This has resulted in cashflow pressures, exacerbated by the effects of coronavirus on the supply chain and customer sales. It has not been possible to secure further investment to continue to trade the group in its current form.”

Harveys and Bensons’ parent group appointed administrators from PwC on Tuesday morning after a tough period of trading for furniture retailers who were suffering from a slowdown in the housing market and low consumer confidence even before the government-imposed high street shutdown forced them to temporarily close stores in March.

“The restructuring, whilst obviously difficult for Harveys’ employees, will safeguard more than half the group’s workforce and is a necessary milestone on Bensons’ journey to becoming a market-leading beds retailer with a strong omnichannel presence,” said Gavin George, the chief executive of Alteri.

“We will continue to work closely with the management team on the turnaround of the business which we believe can have a bright future, despite the challenges facing the retail industry, including the long-term impact of the coronavirus pandemic.”

Alteri bought Harveys, which was founded in 1966, and Bensons, which has been in business for 70 years, in November last year.

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The window to prevent mass unemployment is rapidly closing

Today is the day that many businesses on our high streets have dreaded – the due date for the next quarterly rent. This is felt most acutely by those businesses that make up the backbone and character of many local communities but remain closed, such as pubs, hairdressers and restaurants.

Even much-loved businesses whose customers are eagerly anticipating their return cannot escape economic reality. Without money coming in, they fear debt could rapidly become unsustainable. It is critical they are given confidence this will not be the case, otherwise much greater unemployment will ensue. It makes no sense that, from July, the chancellor has decided that these businesses must pay increased contributions to furloughed staff, with no alternative support in place. This will simply lead to more people losing their jobs – and much of the good work done by furlough will have been undone.



A different approach is needed. That is why Labour is calling for a back-to-work budget in early July, one which focuses on jobs above all else.

First, the government needs to acknowledge the risk of additional unemployment, and act to prevent the situation worsening. We already know that people who go through spells of unemployment when young can earn between 13-21% less, 20 years later. The cost of widespread unemployment to the public purse is considerable. Mass unemployment is like an invasive perennial – once it has taken hold, it can take years to fix. Better to prevent it ever taking root.

The government’s one-size-fits-all approach to support schemes makes no sense – it treats industries that can open today and industries that can’t exactly the same. The chancellor refuses to publish any modelling on the impact of this approach on unemployment. Yet failing to change course will inevitably lead to more people out of work.

A self-employed hairdresser, for example, or worker in hospitality, will be very unlikely to see the business they work in return to full capacity in the near or even medium term. We have repeatedly urged the chancellor to adopt a sectoral approach to economic support. This should include introducing the employer contribution at a slower rate for those sectors that have been hardest hit – not least because the promised sector deals are still yet to materialise.

We have also seen next to no action to encourage young people to stay in education and training, even though the evidence shows this is an effective way to keep them out of the pool of unemployed people.

Secondly, given the already disturbing level of unemployment, the government must act now to put in place the support needed for people to be able to get back into work. We need tailored support for groups with specific challenges such as young people, older people and disabled workers – and an early-warning system for major employers planning redundancies.

The government should also be using the localised data and knowledge it has from the furlough and self-employed schemes so that the response isn’t just dreamt up in an office in Westminster, but works right across the UK. Labour-run local authorities and metro mayors are already working on plans to provide this kind of support, especially for young people. So far, the government has lagged far behind.

Finally, the government needs to provide confidence and support to employers to create new jobs. A well-designed apprenticeship guarantee policy, while welcome, would not be enough – it would miss out almost half a million young people, who would not currently be in line to participate.

Instead, we need a detailed stimulus, focused on measures leading to sustainable employment, and targeted schemes like the Future Jobs Fund put in place by the last Labour government, to support the unemployed back into work. Moving back the stimulus means that even if individuals get the help they need, not enough will have been done to stimulate demand and create new jobs.

The UK lags behind other nations here, with the German package focused on promoting the environmentally friendly, work-rich industries of the future. Just announcing a handful of prestige projects, especially if they are not tied to the promotion of employment and skills, would be a lost opportunity.

The UK government was too slow to get PPE to hospitals and care homes and too slow to put in place its test, track and trace system – which was once billed as “world-beating” but currently looks barely fit for purpose.

We cannot afford for the government to be asleep at the wheel when red lights are flashing on the economy’s dashboard. Labour supported the creation of the furlough and self-employed support schemes – indeed, we called for them. Nobody thinks they should last longer than necessary. But a poorly designed winding down would be a disaster for business and a disaster for jobs. The government can no longer ignore the warning signs. It must act to save jobs.

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