This week’s news includes; San Francisco bans e-cigarettes, New Look posts half a billion in losses, Monzo hits £2 billion value, Kim K files to trademark Kimono,
Below are our top 10 stories that you need to know about. Be sure to check our twitter page and Facebook page for regular posts of important headlines. Get all the important stories and insights straight into your inbox by subscribing to our mailing list here.
Opinion articles of the week:
- The Guardian – Ready for robot lawyers? How students can prepare for the future of law.
- The Economist – London’s reign as the world’s capital of capital is at risk
- CNN – How Microsoft is dodging the move to regulate Big Tech.
- The Fashion Law – The Rise and Fall of Topshop and the Arcadia Group.
1. TRUMP SOFTENS STANCE ON CHINA
In a surprise move, Donald Trump and Chinese Premier Xi Jinping have agreed to restart trade talks at the G20 summit in Japan. Trump also made a concession on Huawei, by allowing US companies to sell to the company, in a partial reversal of his clampdown on the firm. Many US companies had already cut ties with Huawei following Trump’s recent executive order prohibiting transacting with the tech firm. Trump also confirmed that the additional $300 billion of threatened tariffs will not be applied.
This could signify the beginning of the end of the trade war but there is no doubt there are many huge hurdles to cross. Trade talks collapsed in May but the economic damage caused by the dispute may have encouraged the leaders to return to the negotiating table. Analysts believe this is a pause on the political tension rather than a resolution.
BBC News explores the US-China trade war in detail.
2. BATHSTORE FALLS INTO ADMINISTRATION
The UK’s largest bathroom goods retailer, Bathstore, has fallen into administration. The collapse has put 132 stores and 529 staff at risk. The company posted a £22 million loss in the year to July 2017 and its turnaround plan has failed to save the business. The company will continue to trade as it seeks a buyer. Most customers with outstanding orders should have them fulfilled but no installation services will be provided. The bathroom retail sector is worth over £1 billion but has suffered the same fate as much of the high street. Earlier this year Better Bathrooms also fell into administration costing over 300 jobs.
3. FORD CUTS JOBS
Ford has announced that it will cut 12,000 European jobs in its attempt to reshape its business. Earlier this year, the firm announced that it would need to make $14 billion in cuts. Ford made the headlines last month as it announced it would shut its Bridgend plant. This forms just one of six plant closures across Europe. Ford employs 51,000 but will cut nearly 20% of its European workforce. Most positions will be cut through voluntary redundancy. Ford will now split it’s business into 3 divisions, imports commercial vehicles and passenger cars.
4. ABBVIE BUYS ALLERGAN FOR $63 BILLION
Pharmaceutical giant AbbVie has bought Botox creator Allergan for $63 billion. AbbVie will pay $120.30 for 83% of the new company. The deal will allow AbbVie to diversify its portfolio as it currently relies heavily on a few core products for income. AbbVie makes the world’s best selling drug, the immune disorder treatment, Humira. Humira made the company $20 billion in 2018 alone. This acquisition however, will be crucial as Humira’s patent has run out so the market will soon be flooded with cheaper generic products.
The deal is still subject to regulatory and shareholder approval. Allergan’s share price rose by 30% in response to the news.
5. SAN FRANCISCO BANS VAPES
San Francisco has become the first US city to ban e-cigarettes. Lawmakers say the ban will be in place until the health effects become clearer. Stores and now banned from selling e-cigaretes and online retailers are now prohibited from delivering to customers in San Francisco. The US FDA issued guidelines requiring manufacturers to have their e-cigarette products evaluated by 2021. The ban was also driven by the sharp increase in young people becoming to addicted to nicotine products.
There is concern that this ban could boost the black market for e-cigarettes. Ironically, traditional cigarettes which are responsible for the deaths of 40,000 Californians every year, will face no such restrictions. The US’s largest e-cigarette manufacturer, Juul, has said it would be in favour of initiatives to reduce young people using e-cigarettes but only alongside measures for traditional cigarettes.
6. NEW LOOK POSTS HALF A BILLION IN LOSSES
New Look has posted a £522 million loss as it struggles with the challenging high street conditions. While underlying profits increased, total losses at the retailer increased by over £300 million compared to last year. This is primarily due to a £423 million brand impairment charge. This is where a company writes down is worthless goodwill. Goodwill is an intangible asset that is acquired by a company. New Look posted a £33.2 million underlying profit, evidence that it’s restructuring may be successfully taking effect. The company is seeking to reduce its huge debt pile by nearly £1 billion to £350m.
Revenue however, sank to £1.23 billion, down 3.8%. The company has blamed poor weather and a generally challenging retail market.
7. MONZO HITS £2 BILLION
Monzo has been valued at £2 billion following its latest funding round. This makes it the most valuable fintech start up in the UK. The digital bank raised £113 million in this round, led by a US-based investment firm Y Combinator, which also is a big investor in Airbnb, Dropbox and Reddit. Monzo recently hit 2 million users and announced plans to enter the US market. Monzo has gained significant popularity amongst millennials due to its user friendly interface and its integrated money budgeting services. Founder and CEO Tom Bloomfield estimates that the bank could hit 3 million users within months.
8. EE FINED
EE has been fined £100,000 by the ICO for sending customers text message without consent. Last year, EE sent 2.5 million messages to customers, some of which included promotional material. The inclusion of promotional material means the texts fall under direct marketing where prior consent is required. EE had initially considered these texts to be service messages, so therefore exempt from the rules but the ICO refuted this. EE’s fine was substantially less than the £500,000 penalty that can be issued by the ICO.
9. FOREIGN INVESTMENT IN UK DECLINES
The Department for International Trade has revealed that foreign direct investment has fallen significantly. There was 14% fall in new projects and a 24% fall in new jobs in 2018-9 year on year. Only 57,625 new jobs were created, the lowest figures for seven years. This is partly due to Brexit uncertainty but also increasing competition from other European countries.
This comes as Japan has warned its carmakers could be forced to close in the UK if the UK does not retain frictionless trade with the EU. The UK is set to leave on the EU on 31 October but there are doubts that this will be possible.
10. KIM K TRADEMARKS KIMONO
Kim Kardashian has filed to trademark the name of her new clothing line, Kimono Solutionwear. This is not the first time Kimono prefixed brands had been trademark but sparked social media backlash. This announcement led to the creation of the #KimOhNo. There are number of “Kimono” centered trademarks such as Kimono Rose. Kim Kardarshian is seeking to trademark “Kimono Body” and a stylized form of the word “Kimono”. Ironically, the newly formed backlash may help her secure the trademark. If she can prove customers associate the term with her brand, it is likely to be considered distinctive enough to be trademarked.