Sooner or later, everyone gets addicted to Hollyoaks. Or if not that, Made in Chelsea. Or Deal or No Deal, with Noel Edmonds’ famous beard.
Take Mark Price. He seemed happy enough manning the checkout at some free coffee shop otherwise known as Waitrose. But don’t underestimate the power of TV. Mr Price, who already doubles up as Channel 4’s deputy chairman, is so keen on the top job that he’s jacking in the supermarket chain — just on the off-chance that he succeeds Lord Burns as C4 chairman, in time for its possible privatisation.
That, at least, is how Mr Price broadly put things yesterday, while pointing out that next year would see him reach the “grand old age of 55” and the start of his tenth year as Waitrose MD. And 55’s a magic number at Waitrose’s owner, the John Lewis Partnership, what with employees able to draw some of their pensions, while also remaining eligible for staff discounts and membership of its clubs. Mr Price, who earns £1 million-plus a year, is hooked on the fly fishing club.
Still, does that sound reason enough to quit after 33 years at the organisation, not least when only four weeks ago Mr Price was telling the Evening Standard of his “love” for Waitrose and his joy at working for such a “fantastic” board?
No question he’s done a terrific job, despite last year’s rockier figures. Since taking charge in April 2007, he’s expanded Waitrose from 183 shops to 380, raised gross sales from £3.95 billion to £6.5 billion and lifted market share from 4 per cent to 5.2 per cent. Yet there was a hint that his departure next April wasn’t entirely of his making. The announcement spelt out how he had worked with the partnership’s chairman Sir Charlie Mayfield “to agree the timing of his leaving in the best interests of the partnership”. Indeed, Mr Price looks to be in line for a payoff.
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So maybe there’s another reason for his exit: the realisation that he would never get Sir Charlie’s £1.5 million-a-year job. John Lewis is frequently held up as a model of alternative corporate governance. But in one respect it’s a dynasty: the chairman chooses his successor, right down to lodging their name in a bank vault, apparently, in case he goes under a bus. And Sir Charlie, chairman since 2007, seems to have overlooked his deputy, a certain Mr Price. So, anyway, now he’s off. Deal or no deal.
What problem?
Investment bankers don’t really do Premier Inn or Costa coffee. But you know what they’re like. Some would spend the night with the hotelier’s most famous guest, Lenny Henry, if it got their version of the Whitbread break-up story in front of Alison Brittain, its new chief executive. She takes over in December and is a banker herself, even if a retail one.
Yet, whenever you look at the figures, breaking up Whitbread seems the answer to a problem that doesn’t exist. Ms Brittain’s predecessor, Andy Harrison, never bought the story, focusing instead on customer service. And look where that’s got him: a share price that’s more than trebled to £48.82, up more than 3 per cent yesterday, and the sort of growth typified by his swansong half-year figures. Like-for- like sales at Premier were up 5 per cent and by 4.4 per cent for the UK Costas, leaving pre-tax profits 14 per cent ahead at £291 million and a dividend 13.1 per cent higher.
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Spinning off the one bit of the business with less fizz, the 405 pub restaurants, could be one strategic move for Ms Brittain, though even that’s trickier than it looks, with most of them next door to Premier Inns. And as for a big break-up? Geof Collyer, a Deutsche Bank analyst, calculated that selling both Costa and the pubs and gearing up the hotels to Whitbread’s max 3.5 times leverage could deliver £65.93 a share on 2018 forecasts. That’s versus £68.29 for just running the business with similar gearing. Those bankers will need to be persuasive.
Dash of cold water
So much for the “golden age” of UK-China relationships. No sooner does President Xi arrive than the British steel industry starts crashing around him.
Tata Steel, which pointedly blamed a quadrupling of imports from steel-dumping China for being forced to cut 1,200 jobs, is the third company in a week to be axing staff. And it’s got off more lightly than SSI’s closed Redcar plant or Lord Paul’s collapsed Caparo. That’s a total 5,000 job losses. Remember that when the chancellor’s banging on about how many jobs Chinese investment is bringing to Hinkley.
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And it’s not only the steel industry that’s embarrassing our Chinese guest. Yesterday up popped unionised members of Northumbrian Water to start work-to-rule action in protest over plans to close their final-salary pension scheme. Northumbrian’s owner? Li Ka-shing, the richest man in China-owned Hong Kong, worth $25.4 billion. Much more of this and President Xi will go home early.
Suck it up
Is there nothing the Germans aren’t prepared to rig? True, Volkswagen was a bit naughty fitting 11 million diesel cars with software designed to evade emission testers. But now Bosch is having a go at upstaging that. It’s been fixing energy efficiency tests for something even racier: vacuum cleaners. Or that, at least, is the claim of Sir James Dyson, who’s filing legal proceedings against Bosch for producing a machine that allegedly draws only 750 watts in lab conditions but actually requires 1,600 when plugged in at home. Bosch is “strenuously” rejecting the allegations. But it did supply the VW “defeat devices” — even if it claims it had no idea what the carmaker was doing with them. Sure thing.