Hundreds of millions of pounds were wiped off Marks & Spencer’s market value on Wednesday after the high street icon warned that a plan to revamp its clothing range would tear a hole in its profits. Like-for-like clothing sales at M&S have fallen in each of the last five years, and chief executive Steve Rowe said the retailer would lower its prices and improve the style and quality of its clothing lines to better serve its core customer – a fiftysomething woman he dubs ”Mrs M&S”. Investors appeared unimpressed, and shares – already down by a quarter in 2016 – slumped another 10%.
Caveat emptor
Earlier this month, German pharmaceuticals giant Bayer launched a $62 billion offer for Monsanto. On the face of it, the combination makes sense, as it would create the planet’s biggest supplier of seeds and agricultural chemicals. But the deal faces plenty of obstacles, as indicated by a 10% fall in Bayer’s share price since the bid was announced. The industry is facing the challenge of falling prices, while the deal will be closely scrutinised by regulators. Then there’s the PR problem. Monsanto is seen by many Germans as an environmental bogeyman due to its close association with genetically modified seeds. Given that the proposed deal is to be funded by a $15 billion-plus cash call on existing shareholders, they could be forgiven for thinking: “Bayer beware”.
G7 divided
The G7 leaders’ meeting in Japan got under way on Thursday. The summit, attended by the leaders of the world’s major economies, will discuss strategies for improving global growth. But sluggish economic activity, doubts about the effectiveness of monetary policy and accusations of aggressive currency devaluations mean this may be easier said than done. Reports of the first day’s proceedings indicate stark divisions. Japanese prime minister Shinzo Abe wants to drum up support for global fiscal stimulus, but has struggled to convince David Cameron, the UK prime minister, or Angela Merkel, the German chancellor. Both favour an individual economic policy for each G7 country. As for the US, the looming presidential election leaves Barack Obama with little that he can meaningfully do.
Elsewhere, crude oil fleetingly broke the $50 a barrel mark on Thursday. Brent crude is now 80% higher than its low of around $28 during January. The FTSE 100 is up 1.8% over the week to the close of trading on Thursday.
And finally…
Students at an English university have been advised to hang onto their hats, after officials warned that a time-honoured tradition could place this year’s graduates in, er, mortar danger. The University of East Anglia reportedly wanted to ban the tradition of throwing mortarboards into the air after graduation on health and safety grounds. To cap it all, UEA students have been sent instructions suggesting they can “mime” the throwing action, with the mortarboards added digitally to the photographs after the event.
Critics of the decision included the Health and Safety Executive (HSE). Geoff Cox of the HSE said: “You’d think universities would study history and do a bit of research before repeating tired health and safety myths like this one. The chance of being injured by a flying mortarboard is incredibly small and it’s over the top to impose an outright ban.” The outcry looks to have forced a change of heart by university authorities – at the drop of a hat, perhaps? At July’s graduation ceremonies, the university has dropped its absolute opposition, instead asking that students not to congregate in groups of more than 250 to toss their caps into the air. A lot of fez about nothing, if you ask us…
Source BBC
Image credit: Stuart Dee / Photographer’s Choice / Getty Images
