Business news

Blockbuster to enter administration again

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DVD and game rental chain Blockbuster is to enter administration for the second time this year, according to owner Gordon Brothers.

TS Operations Ltd, a subsidiary of TS 1973 Investment Holdings Limited which trades as Blockbuster in the UK and is owned by a subsidiary of global private equity and investment company Gordon Brothers Europe, today announced it is to file a notice of intention to appoint an administrator on behalf of Blockbuster Entertainment Ltd.

Blockbuster collapsed into insolvency in January after facing serious competition from online rental and video streaming competitors, before being acquired by the subsidiary of Gordon Brothers Europe in March.

A statement from Gordon Brothers said that despite the efforts to “turnaround the historically loss-making company by restructuring the business” Blockbuster suffered from “a period of poor trading performance across both rental and retail sales.”

The statement also detailed an attempt to develop “a new digital platform” to compete with other online video streaming services, although the owners were “unable to broker a licensing deal with Blockbuster UK’s parent company in the US.”

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Companies grow more confident, but worries remain over recovery

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Small companies in Britain are leading the world in terms of the growth in business confidence, survey data show.

But such confidence is not matched by views about the economy. Only 14pc of the 1,900 small companies surveyed by Regus, the workspace group, believe that economic recovery is fully under way.

Another 20pc feel the recovery will be stronger by the end of the year on the back of a rise in profits.

Almost 40pc of the business surveyed reported higher profits in the six months to October, an increase of almost 10pc.

The confidence rating was one of the surprises in the survey. Regus measured the UK confidence indicator against others in its global database to determine which country was showing the biggest improvement in confidence.

Cost-cutting remains a priority, with almost 70pc setting their sights over the next year on reducing the bill for bought-in services. IT and telecoms are the priority areas while just over 50pc say they want a better return on marketing and advertising expenditure.

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Construction sector looking up

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News that the construction sector has returned to growth has been cautiously welcomed by industry experts. However, a recent survey indicates that house building is leading the way, while commercial construction and civil engineering remains in the doldrums.

Residential building work has increased at its fastest pace for more than two years and total construction output has risen for the first time since October 2012, according to the CIPS UK construction purchasing managers’ index, conducted by Markit. More than 40 % of construction firm directors who answered the survey are optimistic and predict a rise in output in the next 12 months.

Chartered Institute of Purchasing and Supply chief executive, David Noble, said: ‘The construction sector seems to have turned a corner after six dismal months. The improvement has been fuelled by a boom in house building, but the sector remains bogged down by contractions in commercial construction and civil engineering.’

He went on to say that a lack of public sector projects was having an effect on civil engineering, and this, combined with poor performance in the commercial sector, meant house building alone was driving the industry growth.

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May retail sales bounce back

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UK retail sales have increased 2.1% in May on the previous month, according to figures from the Office of National Statistics.

Sales volumes also increased 1.9% on May 2012, sparking predictions that the UK economy is slowly recovering.

David McCorquodale, UK head of retail at KPMG, said: “This is a solid performance by UK retailers and this increase in consumer spending us hope that the UK economy might be finally turning the corner.

“However, promotions were used to drive these sales, especially in the food sector, and this decision to discount will have eaten into retailers’ margins.”

Food retailers saw a 3.4% increase in the amount customers spent in May on April’s figures, although quantities bought decreased 0.5% in the same period.

The amounts spent in clothing and footwear stores increased year-on-year by 2.1%, a growth of 1.1% from April 2013.

Online sales in May 2013 totalled £582m, an increase of 10.3% compared to May 2012, highlighting the continuing shift in consumer shopping habits.

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Ticket scam artist banned for 13 years

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The director of five companies that sold non-existent tickets for music festivals has been banned for 13 years following an investigation by The Insolvency Service.

John Lupton was disqualified for ripping off the public and claimed that the companies involved were run by his girlfriend using the identity of a deceased woman.

Paul Titherington, official receiver in the Insolvency Service’s Public Interest Unit said: “These companies claimed they could supply concert tickets but in most of the known transactions they never supplied the tickets ordered, nor made the required refunds to customers.

“Investigators were unable to corroborate Lupton’s claims of a co-director who was using a fake identity and has now vanished into thin air.”

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Citizens Advice finds payday sector “out of control”

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A debt advice organisation has claimed that payday loan companies are lending to under 18s, people with mental health issues and individuals who were drunk at the time.

Citizens Advice said its analysis of 780 cases reported to it between 26 November and 13 May 2013 revealed evidence of “inadequate” checks on borrowers, with people chased for debts when the loan had been taken out by someone else using their identity.

It found that three out of four people, or 1,539 cases, struggled to repay the loan, with 84% saying that lenders did not offer to freeze interest rates or charges despite saying that they would do so.

During the six month period, 24,575 people went to Citizens Advice to seek advice about payday loans.

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One in five shops could close by 2018, warns study

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The Centre for Retail Research (CRR) is warning that High Streets could see 20% of their shops close down within five years as more people turn to the internet for their shopping.

The organisation, which conducts research into retail, technology and crime, says this would equate to 62,000 shops closing down.

The CRR believes large areas of the UK’s High Streets would become housing.

It also says as many as 316,000 workers would lose their jobs.

The CRR says online shopping will continue to expand and the proportion of shopping done via the internet will double to 22%.

The report, which was produced by Prof Joshua Bamfield, said the first shops to go would be pharmacies and health and beauty stores.

Retailers specialising in music, books, cards, stationery and gifts will be next.

DIY shops will also suffer.

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‘Pensions liberation’ company on brink of insolvency

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A company which offers to unlock pensions for a fee – is on the brink of a formal insolvency arrangement.

Freedom Capital Partners Limited is poised to enter a Company Voluntary Liquidation (CVL) on 11 June, subject to a creditors meeting, Insolvency News can reveal.

Freedom Capital Partners has been the subject of significant press interest following allegations of high transfer fees for permitting pension scheme holders early access to their fund.

Taking money from a pension before age of 55 remains subject to a tax charge of 55% as it is deemed an ‘unauthorised payment’.

Today, a spokesman for insolvency firm CMB Partnership confirmed it is preparing documents with a view to a CVLbeing passed at the meeting of creditors at 23 Ely Place, London on 11 June.

The news comes just days after the City of London police announced that it had arrested three people and seized computers and documents from a call centre in relation to pension liberation activity. Police Scotland and SOCA also confirmed two arrests in Ayr and Glasgow.

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Fall in ATOL failures lifts travel fund

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The Air Travel Trust (ATT) – a fund used to meet costs when an airline goes bust – has returned to surplus for the first time since 1996, after a fall in ATOL failures.

The annual report details that the ATT received £48.1m inATOL protection contributions from 19.2m passengers for the year ending 31 March 2013, up from 17.3m passengers during 2011/2012.

Roger Mountford, chair of ATT, said: “The relatively low number of ATOL holder failures shows how well the travel industry performed last year, despite challenging financial circumstances.

“This more stable period for the industry has resulted in the ATT’s welcome return to surplus – consumers now enjoy greater protection for their holidays.”

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The 1 Thing a Business Leader Must Do to Succeed

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Sadly, 25% of businesses fail within their first year and an astonishing 70% of businesses fail within ten years. So, if you’re thinking about starting a business or you’ve recently made the leap, how can you optimize your chances of success? What is the single most important factor in determining your success? This question was asked of 10 successful business leaders from the Young Entrepreneur Council.


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