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UPDATED Coronavirus round-up Ocado set to grow, Monsoon Accessorize and Quiz enter administration

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Ocado: investing for growth post lockdown (Image: Ocado)
Ocado: investing for growth post lockdown (Image: Ocado)
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The impact of lockdown starts to bite: Monsoon Accessorize and Quiz go into administration, Ocado though invests in growth

We’re reporting on the effect of the Covid-19 coronavirus pandemic on the way UK shoppers buy – and on how retailers are responding to that changing behaviour. This update comes as, as of June 10, 290,143 people have tested positive for coronavirus and 41,148 people have died following a positive Covid-19 test result. Over the previous day, 1,003 people were reported to have tested positive and 245 people were reported to have died following a positive test.

 

Ocado raises £1bn to meet long-term increase in grocery delivery

Online supermarket Ocado is raising £1 billion in fresh equity and debt to fund massive and rapid expansion as it sees the lockdown boom in grocery home delivery set to continue.

 

The group told The Financial Times that the pandemic had been a “catalyst” for a permanent and significant move towards online grocery deliveries. It said the new money would provide “the financial flexibility to capitalise on opportunities arising from the significant acceleration in online adoption and grow faster over the medium term”.

 

In the UK, Ocado runs its grocery business in a joint venture with M&S and has seen 13% sales growth in May alone. Worldwide it also has a series of partnerships, including Kroger in the US, Sobeys in Canada, ICA in Sweden, Groupe Casino in France, Coles in Australia and, most recently, Aeon in Japan.

 

Monsoon Accessorize goes in to administration – for now

Monsoon Accessorize has gone into administration, closing its 35 stores and putting 545 jobs on the line. However, owner Peter Simon is planning to buy it and start again.

 

The retail chain made up of clothing retailer Monsoon and accessory vendor Accessorize was turning a profit pre-coronavirus, but the lockdown forcing stores to close has made the business untenable as it was unable to pay rents on 230 stores.

 

Simon has injected £15 million of his own money to buy the brands and vows to return, albeit with fewer stores – though he may be able to save as many as 100 – in the coming months.

 

Simon, who opened the first Monsoon store in Beauchamp place in London in 1973, hopes to be able to save as many as 2300 jobs across the retail brands and its supply chain.

 

At the start of the pandemic, a study, by stock market and Forex traders platform AskTraders,earmarked Monsoon Accessorize as a retailer unlikely to survive the pandemic in its current form.

 

Quiz puts store business into administration, tries to save online

Fashion retailer Quiz has placed the stores-based part of its business – Kast –into administration, closing its 82 standalone stores in a bid to cut its rent bill. It plans to try and renegotiate a deal.

 

In the meantime, it will concentrate on selling online, buying back some of the store stock in the short-term. The Quiz Group will spend £1.3 million on purchasing assets of Kast. It plans to trade online and to look to renegotiate rents with a view to opening some stores again in the future.

 

The group said 822 of the 915 staff affected by the decision will remain with the group but that 93 jobs are at risk at its HQ in Glasgow and at its distribution centre in nearby Bellshill.

 

In a statement to the London Stock Exchange, Quiz Group said: “The enforced closure of QUIZ’s stores since March in combination with significant levels of uncertainty going forward about the rate of recovery in consumer demand following the COVID-19 outbreak, has meant that the Kast business is not financially viable in its current structure. The Board of QUIZ has therefore decided that it is not in the interests of the wider Group and its shareholders to provide continued financial support to Kast.”

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