HoF announces enormous losses
British department store group House of Fraser has announced losses before tax have almost trebled from £1.2 million in the first half of 2004 to £3.1 million in the same period of this year. The group said the losses were due to the “extremely difficult” trading environment.
It added that were it to eliminate the one-off benefit from property gains of £1.3 million, the chain's total losses amounted to £4.4 million.
Having famously sold Dickens & Jones on Regent Street in June and Barkers on Kensington High Street in August, the chain has said that it will continue to open stores, focusing on shopping centres with convenient parking facilities. It has also opened stores in Dublin, Maidstone and Norwich and has also acquired department stores Jenners in Edinburgh and James Beattie in the Midlands.
“We have made a great deal of progress in the period despite an extremely difficult trading environment,” said chief executive John Coleman, adding that the new acquisitions, tightened financial management and focus on branded products “ensured the group is well positioned for the all-important Christmas period.”
www.houseoffraser.co.uk
28 September 2005
Wensum optimistic despite pre-tax losses
British clothing maker Wensum Company Plc reported a pre-tax loss in the first half of £170,000, down from a pre-tax profit of £340,000 in the same period last year. Nevertheless, the company remained optimistic about the outlook for the year.
Wensum said it had been severely affected by exceptional costs resulting from the closure of its Norwich factory.
Chairman Stuart Lyons said that Wensum Clothing's first shipments from overseas “have been well received by customers.” He added: “Wensum Corporate had another strong sales advance, more than offsetting the fall in sales at Wensum Clothing, which was affected by the adjustment from in-house to outsourced manufacture.”
Sales for the group rose 10 percent to £8.1 million, while operating profits climbed 22 percent from £551,000 in 2004 to £672,000.
27 September 2005
Europe To Charge Tariffs On US Imports
The EU is to charge a 15 percent tariff on certain US apparel items, after US Congress failed to rescind the Byrd Amendment, which was ruled illegal by the World Trade Organization. Most classes of man-made fiber or cotton trousers and shorts are affected by the tariffs, as are goods from other industries such as sweet corn and writing pads.
The Byrd Amendment allows for the collection of tariffs on foreign goods when they are sold in the U.S. for less than they are in their home country. The funds collected from those duties are redistributed to domestic companies that lost business to the low-priced goods. From 2001 to 2003, about $728 million in tariffs was collected and redistributed by the U.S under the provision, which was ruled illegal by the WTO in January 2003.
The WTO allows for punitive tariffs, but ruled the U.S. cannot redistribute the funds in such a way, opening the door to the tariffs on U.S. goods. The EU might expand the duties to include other goods such as cotton sweaters, cotton dresses and jeans until the Byrd Amendment is rescinded.
Julia Hughes, vice president of international trade for the U.S. Association
of Importers of Textiles & Apparel, said Europe has used duties on apparel
products in such a way before, although the initial rate wasn't as high.
"At 15 percent, you're definitely going to see some impact on pricing,
especially with the dollar being low and the euro being high," Hughes said
to WWD.
3 May 2005
EU tries to end zero-tax on child clothing
The European Commission has called for VAT to be imposed on children's clothes and shoes in Britain.These are, along with books and newspapers, among the goods at the moment exempt from this type of taxes. The scheme unveiled yesterday is part of the continuing attempt by Brussels to force through tax harmonisation - standardising tax rates across the EU. At the moment, Britain, Ireland and Luxemburg are the only countries that do not levy VAT on these articles.
John Healey, the Economic Secretary to the Treasury, said: "This is a
ridiculous proposal from the Commission. There is no way we will put VAT on
children's clothes. This was a manifesto commitment. If it needs a veto then
so be it. End of story."
Frits Bolkestein, the EC's taxation commissioner, said in Brussels that he was
aware of sensitivities in the UK over the proposals, and of Tony Blair's manifesto
pledge. However, he thinks that it is the commission's duty to present consistent
economic proposals, even if it is likely that one or other government will block
agreement under the unanimity rules, which still apply to tax matters.
Mr Bolkestein added: "It is our job to try to simplify the rules on reduced rates to improve the functioning of the single market and avoid potential distortions of competition." He said it was not certain that the price of children's clothes and shoes would rise if VAT was imposed - because such goods already cost more in the UK without VAT than they do in some European countries applying a 17.5% rate.
June 17, 2003