The week’s news included; Easyjet cyber attack affects 9 million, Menthol cigarettes banned in UK, Hertz files for bankruptcy, Football Manager maker sued by Manchester United,
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:
- City A.M – Covid-19: why the tech giants have emerged as winners
- BBC News – Why Joe Rogan’s $100m exclusive Spotify deal matters
- The Guardian: The Bank of England needs to think the unthinkable to rescue the economy.
1. EASYJET HACK
Easyjet has revealed that a cyber attack has affected the data of 9 million customers. Only 2208 of these had credit card details compromised, but the rest had email addresses and travel details stolen. Easyjet described it as a “highly sophisticated” attack and had informed the UK Information Commissioner’s Office. Those who had credit card details compromised were informed in April, but the airline is still investigating and will inform all affected persons by 26 May. There is currently no evidence that any details have been misused but Easyjet have warned people to be wary of phishing emails.
Last year, British Airways was fined £183 million for a data breach affecting 500,000 customers due to inadequate protections. The ICO can issue fines of up to 4% of annual global turnover for data breaches if negligent or inadequate practices are in place.
2. MENTHOL CIGARETTES BAN
Last week, the sale of flavoured and skinny cigarettes was banned in the UK. The ban implements the new the EU Tobacco Product Directive. This extends restrictions already in place which prohibit the sale of menthol cigarettes in packs of more than 20. Menthol cigarettes are considered to be more addictive than regular cigarettes and the variety of flavours have made them more appealing to young people. There is also a misconception that these are less harmful than regular cigarettes. The sale of menthol filters with cigarettes or tobacco is illegal but the sale of filters individually will still be permitted.
3. SOFTBANK LOSSES
Japanese investment bank SoftBank has posted a staggering $18 billion loss for its Vision Fund. The Vision Fund which holds stakes in 88 startups including WeWork and Uber has declined for two consecutive quarters. The fund lost $10 billion from WeWork’s IPO debacle and bailout alone. The coronavirus outbreak further compounded issues and wiped out revenues for many firms and SoftBank’s tech investments brought a $7.5 billion loss in the quarter. SoftBank itself saw losses totalling a huge $13 billion. The group will now sell $41 billion in assets as part of scheme to shore up its balance sheet and share price. Alibaba Chairman Jack Ma stepped down from the board last week.
4. JOHNSON & JOHNSON PULLS TALC PRODUCTS
Johnson & Johnson will stop selling its talc products in US & Canada amid class action lawsuits alleging they cause cancer. The consumer goods giant cited lack of demand for the reason it will stop selling the products. It will prioritise high demand products so social distancing measures can be implemented in its manufacturing and distribution sites. J&J’s talcum baby power is amongst 100 products which will be permanently pulled from shelves in the US and Canada but other markets remain unaffected. In the US and Canada it will continue to sell its current inventory but will discontinue shipping these products once sold. Thousands of lawsuits have been launched against the company over claims they cause ovarian cancer and contain asbestos. Johnson & Johnson denies all allegations about the safety of its products and is fighting the lawsuits.
5. HERTZ BANKRUPTCY
Car rental company Hertz has filed for bankruptcy protection as the rental industry grinds to a standstill. Chapter 11 Bankruptcy allows companies to reorganize their business, debts, and assets while protecting the company from creditors pursuing debts or claims. The coronavirus outbreak has wiped out demand for rentals and used cars. Hertz generates a lot of income from car rentals at airports. In the US, air travel has tanked 96% since the coronavirus. The bankruptcy will exclude operations in the Europe, Australia and New Zealand and will not apply to franchisee locations. Hertz has over $1 billion in cash reserves to keep businesses open but it will restructure its operations. Hertz’s share price has tanked over 85% in the past 3 months alone.
6. UK BAILOUT FIRMS BONUS BAN
UK companies borrowing over £50m via the governments state backed loan will be restricted from paying dividends to shareholders and bonuses to senior executives. The government has increased the borrowing limit available to mid-sized companies from £50m to £200 m due to a low initial uptake. Many companies argued the original limit was far too low given the total collapse in revenue for businesses. The government increased the limit but if a company borrows £50m or more, it cannot pay dividends to shareholders nor can it give pay rises or bonuses to senior management. The restrictions are to ensure all loan funds go towards the upkeep of the business. This particular loan is available for medium sized companies and allows companies to borrow up to 25% of their annual turnover.
7. ROLLS-ROYCE JOB CUTS
Rolls-Royce has announced that it will cut 9000 jobs due to the decline in the airline industry. Most jobs will be cut at its Derby plant in the UK in its civil aerospace business. It will review other sites, but no announcement has been made. It is currently consulting with unions. Rolls-Royce has been hit heavily by the coronavirus outbreak. It produces engines for commercial airlines but with air travel declining over 90%, this sector is in crisis. The airline industry is predicted to lose out on £250 billion in revenue in 2020 so suppliers like Rolls-Royce are heavily affected. Rolls-Royce employs 52,000 worldwide.
8. CARLUCCIO’S JOB LOSSES
Ranjit Singh Boparan has rescued 31 Carluccio’s stores, saving 800 jobs but 40 other sites will be closed by administrators. All Carluccio’s staff are currently furloughed but the 1000 staff at the 40 restaurants will not return to work as a buyer could not be found. Carluccio’s was one of the victims of the ailing high street even before the coronavirus outbreak. The restaurant’s huge overheads, debt and lack of appeal to new customers saw the gradual demise of the chain. In the UK, restaurants will not be permitted to open for non-delivery/takeaway services until July at the earliest.
Boparan owns several large food industry brands such as Ed’s Easy Diner, Fox’s Biscuits and Giraffe. He is also dubbed the “chicken king” as his firms supply over 30% of the UK supermarket chicken.
9. FOOTBALL MANAGER MAKER SUED
Sega have been sued by Manchester United Football Club over their use of its name in its Football Manager games. Manchester United claims Sega unlawfully used its club name “extensively throughout the game” and used a logo imitating its likeness. Sega however, argues that it’s a “legitimate reference to Manchester United football team in a football context”. Therefore, Sega claims that it is entitled to use the name in its game. Manchester United says it is losing out on large amounts of licensing revenue from this unauthorised use of its name. Football Manager is one of the most popular and extensive football video games with 875,000 weekly players.
10. ALDI DELIVEROO DEAL
Aldi has struck a deal with Deliveroo to launch home deliveries. The service will provide a range of 150 essential items ordered through the Deliveroo app. Delivery will cost £4.99 and can be delivered in 30 minutes. This will be trialled in Nottingham and will expanded to seven other sites in the East Midlands in June.
Many supermarkets who previously hadn’t catered to online shoppers have been forced to adapt to the new normal. Since lockdown, demand on for delivery has exceeded supermarkets capacity to delivery. Over 10% of grocery shopping is now done online and supermarkets have been scrambling to increase capacity. With social distancing measures likely to be in place for the remainder of the year, supermarket investment in online delivery is likely to increase.