The week’s news included; Tapestry to buy Jimmy Choo owner for $8.5bn, Wilko falls into administration, Italian banks to face windfall tax, Water companies facing £800m lawsuit.

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Opinion articles of the week: 

  • City A.M. – The key to reducing our emissions is in our buildings, not meatless burgers
  • BBC News – Deflation: Why falling prices in China raise concerns
  • CNBC – What Biden’s executive order means for U.S. investors in China
  • City A.M. – How Spotify’s $1bn bet on podcasts failed to make any money


Capri Holdings, the owner of luxury fashion brands Versace, Michael Kors and Jimmy Choo, is to be bought by fashion giant Tapestry. The  $8.5 billion deal will create yet another behemoth in the world of luxury fashion. The parties are planning to close the deal in 2024.  Tapestry already owns labels like Coach and Kate Spade. Tapestry is hoping to more closely compete with European conglomerates such as LVMH and Kering. Most luxury fashion brands are owned by a handful of huge organisations. For example, LVMH owns Louis Vuitton, Givenchy, Christian Dior and Marc Jacobs. Kering owns brands including Gucci, Yves Saint Laurent and Balenciaga. LVMH is going from strength to strength after it reached a $500 billion market cap earlier this year.


Wilko has fallen into administration but remains open for now as it races to find a buyer. The high street retailer has struggled with rising costs and weak revenues. Administrators are now looking for a buyer for all or part of the business. While this process is ongoing, Wilko will remain open and staff will be paid. Home deliveries however, have been suspended. Wilko has over 12000 staff across its 400 stores. If Wilko collapses, it would mark the largest high street failure of 2023. Wilko’s leadership appears confident that a deal can be done. PwC has been appointed as the administrators. Shoosmiths has been appointed as the lead law firm acting on the administration.


Publishing giant Simon & Schuster is to be bought by private equity firm KKR for $1.6 billion. KKR will pay in cash and the publisher will operate independently under the deal. KKR also owns digital books platform Overdrive. Simon & Schuster is the fourth largest book publisher in the US. 

Previous owner Paramount Global has been looking for a buyer for the company for 3 years. A $2.2 billion takeover bid by competitor Penguin Random House was blocked due to competition concerns. The court deemed that the deal would reduce pay and opportunities for writers.


Banks in Italy are facing a 40% one-off windfall tax. The government is introducing the tax in light of the bumper profits banks are making due to rising interest rates. Italy’s largest bank Intesa San Paolo posted a €2.27 billion net profit for April-June. Money raised from the tax will be put into helping businesses and households struggling with rising mortgage costs. The tax is expected to raise €2 billion. The tax still needs to be approved by Parliament. The scheme was limited by the government as now the tax would be capped at 0.1% of assets. The tax will also only apply to the income that comes from the gap between the banks’ lending and deposit rates. Hungary and Spain have both introduced similar windfall taxes on banks. 


Amazon’s marketplace is leaving sellers out of pocket and the UK government is calling for changes to their policy. Sellers on Amazon’s marketplace have their funds from sales held for seven days after delivery date. This policy came into force for all EU and UK sellers from August 2023. This policy was first introduced in 2016 but had only applied to new sellers who joined after this date. Amazon says this is to ensure there are sufficient funds to cover customer returns or claims. Sellers however, say this lengthy holding period is causing serious cash flow issues.

Amazon is now offering sellers loans with interest rates of 14% to manage cash flow while they wait for funds. Many sellers have no choice to accept these loans, otherwise their businesses will collapse. Online marketplace Etsy was in the spotlight for withholding 75% of sellers’ funds for 45 days. The UK small business minister Kevin Hollinrake has asked Amazon to explain how it will “mitigate” the impact on sellers.


Six water companies in England are facing an £800 million lawsuit for allegedly under-reporting sewage pollution and overcharging customers. Environmental and water consultant professor Carolyn Roberts is seeking compensation for roughly 20 million customers. She claims the companies have breached competition law by misleading the Environment Agency and Ofwat about their pollution figures. Consequently, Severn Trent Water is the first to face legal action in a huge £330 million claim covering up to 8 million claimants. The river Severn is reportedly the most polluted river in the UK with 2600 individual pollution events in 2021 alone. Thames Water, United Utilities, Anglian Water, Yorkshire Water and Northumbrian Water are also in Roberts’ firing line. The government is considering unlimited fines for water companies that repeatedly pollute our waters as the problem is worsening. 


The UK economy saw surprise growth of 0.2% in Q2. Many analysts were concerned about an impending recession driven by rising inflation and interest rates. The Bank of England anticipated a 0.1% growth in Q2. Growth was spurred by a 0.7% expansion in UK production and manufacturing. June saw the fastest rate of growth of 0.5%. The pound rose by 0.3% against the dollar on the news, rising to $1.2714. Experts now expect the UK to avoid a recession this year. A growth of 0.4% is expected for 2023 and 0.3% for 2024. 


Retail sales in the UK sank in July as wet weather turned off shoppers. High streets saw a real term decline in sales while online retailers saw sales fall by 7% compared to last July. High inflation has also limited household disposable income and retailers are bearing the brunt. Energy prices are, however, falling and this should soon be reflected in inflation figures.

One industry is particularly suffering from strained household budgets. Alternative meat maker Beyond Meat saw its sales fall by 30.5% in Q2. Plant-based meat substitutes are currently far more expensive than meats. Meat eaters who may have experimented with plant-based substitutes are now reverting back to meats as the cost of living crisis pinches. Beyond Meat already cut nearly 20% of its workforce last year as it experienced a decline in demand. 


Disney+ was headed for the stars but now found itself tumbling back to earth. The streaming giant lost a record 11.7 million subscribers in Q3 of its fiscal quarter. The company is now seeking to adopt many of the recent changes introduced by Netflix to boost revenue. This will include a crackdown on password sharing and a new cheaper offering that runs ads. A new £4.99  monthly offering with ads will go live as well as a new £10.99 premium plan offering 4k video, downloads and up to four different devices streaming at the same time. Losses at Disney+ are shrinking but the falling subscriber numbers are not encouraging. Forbes looks at the challenges facing Disney in more detail. 


The icon of remote work communications during lockdown , Zoom, has now told its staff to come back to the office. Zoom had previously told staff they would be able to work remotely indefinitely. Staff at the US tech firm must now attend the office twice a week, provided they live within 50 miles of an office. This is a clear sign of the decline of fully remote working. Many companies have adopted a hybrid model. In the US, around 30% of companies have hybrid working models. Zoom slashed 15% of its workforce earlier this year as demand for its services waned since the pandemic. 

Last week, Zoom was also hit with allegations that it used customer calls to train AI software without consent. Zoom’s terms of service seemed to give them freedom to use data, sparking concern. The tech firm quickly rushed to amend its terms of service, noting that”Zoom will not use audio, video or chat customer content to train our artificial intelligence models without your consent”. In June, Zoom introduced new AI powered features into its software. For example, AI can now summarise meetings for users without needing to record it. This system is currently in a trial phase.