Microsoft profits double as cloud computing bet pays off
Microsoft has credited its shift to cloud based computing for a near doubling in quarterly profits to $5.3bn.
The company cited its shift away from computer sales and older software products with helping drive growth in revenue during the quarter from $20.6bn to $23.3bn.
Earlier this month Microsoft announced plans to cut “thousands” of jobs worldwide to facilitate its shift into the cloud computing sector, with the majority of cuts expected to to sales teams outside the US.
Meanwhile, eBay also posted its results, which saw profits drop 94% in the three months to June as the ecommerce site focuses on shedding its auction site identity. The company said its US online ticket exchange business, StubHub, suffered without events such as Broadway play Hamilton and the Copa America football tournament to drive buyers.
Ebay’s quarterly revenue did, however, rise 4% year on year to $2.3bn, as two million new buyers started using its platforms.
Quiz sells £92m stake in a bid to take on Boohoo
Glaswegian fast fashion brand Quiz has sold a £92m stake in its business ahead of an estimated £200m flotation on Aim, the junior London stock market, later in July.
Hoping to take on the likes of Boohoo and Missguided, Quiz has already seen sales jump nearly 30% to £89.8m in the year to 31 March, with operating profit up 44% to £10.3m.
Current trading puts sales up 37% in April and May compared with the same period in 2016. Online sales have increased 118%, while its 73 UK stores and 165 department store concessions delivered like-for-like sales growth of 16%.
Quiz operates in 19 countries through deals with franchise and online partners.
Vimto maker to avoid sugar tax on all own brand products
Vimto manufacturer Nichols says all its own brand products will avoid the sugar tax after ramping up its focus on sugar free and zero ranges.
The recipe reformulation project focused on the company’s healthier ranges, meaning no Nichols products will trigger the sugar levy when in comes into force in April 2018. This has been boosted by the acquisition of iced drinks brand Noisy Drinks and fruit water Feel Good Drinks Company, which produce drinks below the levy.
Over 70% of Nichols’ UK growth came from no added sugar and zero variants in 2016.
Nichols recorded a 12% rise in sales to £63.5m in the six months to June 30, helped partly by its overseas businesses. The bulk of turnover is generated by UK sales, which rose 6.7% to £47.5m.
TSB to roll out iris recognition
TSB customers will soon be able to access their mobile banking app via iris recognition, as the bank becomes the first in Europe to introduce biometric technology.
Customers will be able to access their accounts by scanning their eye with a smartphone camera, without the need to enter an ID or password. Iris recognition is widely considered the most secure form of identification currently available as the human eye is more unique than a fingerprint.
The new feature will initially only be available to customers with a Samsung Galaxy S8 or S8+, which are enabled with the biometric technology.
Air France introduces budget airline
Air France-KLM Group plans to start flights under new budget airline brand Joon this autumn as it looks to target millennial travellers.
Previously codenamed Boost, Joon will initially offer medium-haul services from Paris Charles de Gaulle airport, beginning long-haul routes in mid 2018.
Air France says the brand is “entirely designed” to win over 18- to 35-year-old millennials, hence the name Joon echoes “jeune”, the French word for young.
The launch of Joon comes a month after BA owner IAG unveiled new trans-Atlantic budget airline Level.
Thursday 20 July
New Waitrose campaign aims to help shoppers waste less food
Waitrose’s new campaign aims to tackle the quarter of people that throw away food every day.
The supermarket highlights that 10% of all groceries are binned in the home while 89% of people say they are wasting food, with 18-25 year olds the most likely to waste food every day.
The findings mark the start of the newspaper’s Live Wise campaign, which aims to help customers make the most of the food they buy.
“The desire to reduce waste is clearly there, we just need to start making a few fundamental changes to the way we buy, store and cook food,” says Waitrose Food Editor, Silvana Franco.
Audi advert criticised for being sexist
Audi is facing a backlash on social media over an advert aired in China that is being accused of objectifying women.
The ad compares finding a car to finding the perfect wife. It shows a couple at the altar about to tie the knot, before the woman’s concerned future mother-in-law interrupts the wedding to inspect the bride’s body. The woman is shown pinching the younger woman’s nose and ears and scrutinising her teeth while the groom and priest look on.
She then takes a last look at the bride’s chest before a caption appears saying: “An important decision must be made carefully”.
A statement from parent company Audi AG expressed regret, saying the advert “does not correspond to the values of our company in any way”. The ad has now been withdrawn.
Sir Philip Green looks to Burberry for new Topshop boss
Sir Philip Green has turned to Burberry to fill the position of chief executive of Arcadia brand Topshop.
Paul Price, Burberry’s merchandising director, will start his role in one of the most high profile retail jobs on 4 September.
Price takes over from Mary Homer, who revealed she would be leaving in March to become chief executive of homewares business The White Company.
Google to add ‘news feed’ to website and app
Google is adding a personalised Facebook-style news feed to its homepage to show users content they may be interested in before they search.
The new function will display news stories, features, videos and music chosen on the basis of the user’s previous searches.
Users will also be able to click a ‘follow’ button on search results to add topics of interest to their feed.
Analysts believe it is a way of allowing Google to compete with rivals.
“Facebook’s news feed is one of its main rivals. It is competing with other ways of accessing content,” says Mattia Littunen, a senior research analyst at Enders Analysis.
British Airways turns to British celebrities for new safety video
BA has chosen the likes of Thandie Newton and celebrity chef Gordon Ramsay for its new safety video in conjunction with charity Comic Relief.
The theme follows airlines gimmicky approaches through animations or Virgin America’s musical theme.
“It’s extremely important to us that customers engage with our safety video, and involving some of the nation’s most well-known personalities has given us the chance to create something fun that we hope people will watch from start to finish – and remember,” says British Airways chairman and CEO Alex Cruz.
Wednesday 19 July
Reckitt Benkiser sells food unit to McCormick
US food group McCormick & Company will buy the foods business of UK consumer goods company Reckitt Benckiser for more than $4bn. RB put the unit up for sale earlier this year as it looks to focus on its core health business, as well as its newly acquired infant nutrition unit. It means iconic brancds including French’s mustard and Frank’s RedHot sauce will now be opened by McCormick.
“The acquisition of RB Foods strengthens McCormick’s flavour leadership with the addition of the iconic French’s and Frank’s RedHot brands to our portfolio, which will become our number two and number three brands, respectively,” says Lawrence Kurzius, chairman and chief executive officer of McCormick.
Ad tech consolidation looms as Sizmek buys Rocket Fuel
Sizmek has acquired ad tech company Rocket Fuel, the latest in a number of deals that commentators are suggesting points to an ad tech consolidation. Rocket Fuel, which generated $450m in revenue last year, sold for just $125.5m, well below the $2bn valuation it received in 2013 just after its IPO. The two companies hope that by joining forces they can offer an alternative to Google and Facebook, which currently account for the majority of digital ad dollars.
The deal comes in the same week that Rubicon Project bought nToggle and amid takeovers of ad tech companies by those in the cloud computing, media and telecomms industries. Other notable deals include Verizon buying Yahoo and AOL, as well as Adobe’s acquisition of TubeMogul.
Amazon launches shoppable product feed
Amazon has unveiled a new feature, Amazon Spark, that aims to improve product discovery. Users of the service post images and updates on products they like, which other users can respond to with comments or likes (known as ‘smiles’). They can also create their own customised feed, featuring products from areas of interest.
Amazon hopes that the move will help it compete against Instagram and Pinterest, both popular for providing inspiration. The key difference for brands will be that consumers will be able to purchase those products directly from Amazon at just the click of a button.
Google Glass is back, with a focus on business
Google is bringing back its smart glasses, switching strategy to focus on selling to business rather than consumers. The company says the ‘enterprise edition’ of Google Glass has better battery life and a more comfortable fit, although the design remains relatively similar with a built-in camera and see-through display.
“Workers in many fields, like manufacturing, logistics, field services, and healthcare find it useful to consult a wearable device for information and other resources while their hands are busy,” says project lead Jay Kothari in a post on blog site Medium.
“That’s why we’ve spent the last two years working closely with a network of more than 30 expert partners to build customised software and business solutions for Glass for people in these fields.”
Tthe original Google Glasses were not as popular as the company hoped, and were cancelled around two years ago. However, Snap’s Spectacles have proved there could be a market for augmented reality glasses. Snap’s glasses have just gone on sale on Amazon.
M&S makes good on its brand promise to cut waste
Marks & Spencer is cutting the amount of packaging it users in popular snacks such as crisps and popcorn as part of its brand promise to cut waste. ‘Project Thin Air’ has seen the retailer redesign more than 140 of its best-selling products so they come in small, less bulky packaging but contain the same amount of food as before.
For example, the pack size on its popcorn range has been reduced by 37%, according to the Guardian, while its hand-cooked crisp range uses 20% less plastic after switching to a thinner but strong type.
M&S estimates the changes will save it 75 tonnes of packaging each year and says it is “the start” of a much bigger piece of work as it looks to cut waste in other areas of the business as part of its Plan A sustainability programme.
Tuesday, 18 July
Netflix global subscribers hits 104 million
Entertainment streaming company Netflix saw its shares surge yesterday after revealed it has reached 104 million global subscribers.
The company says the main reason behind the revenue boost was its “great content”, pointing to its political drama House of Cards and 13 Reasons Why, which is about teen suicide.
Netflix shares rose more than 10% in after-hours trading following the announcement of its second-quarter earnings.
Netflix said it added about 5.2 million members during the quarter, mostly from overseas. International members now account for about half of Netflix subscribers.
The growth helped produce $2.8bn (£2.14bn) in quarterly revenue, up by almost a third (32%) from the same period in 2016.
British economy predicted to face slowest growth since 2012
Inflation is expected to have a major impact on consumer spending this year as the UK economy slows, according to forecasts by PwC. Annual GDP growth will slow to 1.5% this year and 1.4% in 2018 as demand stutters.
The rising cost of everyday items led to a slowdown at the start of the year after resilient spending led the economy to end 2016 in far better shape than many prominent economists had predicted in the aftermath of the Brexit vote.
However, the sharp decline in the value of sterling after the EU referendum has led to a steep rise in inflation, from only 0.5% annually in June 2016 to 2.9% in May. PwC predicts it will remain at an average of 2.9% in 2018.
Disney signs three-year partnership with FA
Disney has teamed up with the Football Association in a bid to encourage more young girls to exercise and play the sport, as well as challenge negative perceptions of women’s football.
Earlier this year, The FA revealed its new strategy for women and girls’ football, Gameplan for Growth. It wants to double participation and the number of fans by 2020, and achieve success on the world stage by 2023. Disney believes this fits in with its aim to get parents and their children more active in the UK.
The first campaign of the partnership sees Disney team up with the England women’s football team to challenge clichés of what it means to be a “modern princess” in an effort to promote and inspire girls to fulfill their potential.
Anna Hill, chief marketing officer of Disney UK and Ireland, says: “At Disney we always want our characters and storytelling to be really relevant, inspire and empower children to be confident and believe in themselves, so we’re excited to be teaming up with The FA and kicking off our partnership with such an exciting campaign with the Lionesses.
“Disney has a longstanding commitment to healthy living so by encouraging girls to get out and play football, this partnership will help both organisations achieve their goals.”
Tesla adds James Murdoch to its board following pressure from investors
James Murdoch, the chief executive of 21st Century Fox and son of media mogul Rupert Murdoch, has joined the board of Tesla after months of pressure from investors about the lack of independent directors on the electric car company’s board.
Murdoch is joining the board as a director together with Linda Johnson Rice, the chairman of Johnson Publishing.
Earlier this year, five investment groups representing a number of investors sent a letter to Tesla calling for a shake-up of the board amid criticism chief executive Elon Musk had ties to too many of the directors.
In response, Musk said on Twitter that Tesla would “soon” be announcing two new independent board members, but said the group’s letter “had nothing to do with it”.
On announcing the appointments, Tesla cited Rice’s “extensive corporate board experience” and said Murdoch was a “key driver of 21st Century Fox’s domestic and international expansion”.
Hacked dating site Ashley Madison to pay out $11m
The parent company of hacked extramarital dating site Ashley Madison has agreed to pay an $11.2m (£8.57m) settlement to US-based users of the site, ending a two-year court battle.
Ruby Life agreed to pay the settlement following a number of class-action lawsuits “alleging inadequate data security practices and misrepresentations regarding Ashley Madison”.
In a statement, Ruby Life says it denies any wrongdoing and reiterates that “merely because a person’s name or other information appears to have been released in the data breach does not mean that person actually was a member of Ashley Madison”.
Monday 17 July
Easyjet boss Carolyn McCall lands top job at ITV
Commercial broadcaster ITV has confirmed the appointment of Carolyn McCall as its first female chief executive.
McCall joins ITV from easyJet, where she has been chief executive for seven years. She will join ITV on 8 January, 2018, replacing Adam Crozier, who left the company at the end of June.
“I’m really pleased to be joining ITV. It is a fantastic company in a dynamic and stimulating sector,” says McCall, who started her career in marketing. “I am looking forward to getting to know all of the people at ITV and helping it make the most of the amazing opportunities that it has in the future.”
Peter Bazalgette, chairman of ITV, adds: “In a very impressive field of high calibre candidates, Carolyn stood out for her track record in media, experience of an international operation, clear strategic acumen and strong record of delivering value to shareholders.”
A recent study by Research Now shows a fifth of FTSE 100 CEOs now have a marketing or sales background.
Unilever wants to buy Reckitt Benckiser’s £2.2bn food division
Unilever is bidding to acquire Reckitt Benckiser’s £2.2bn food division, which includes the French’s mustard brand, according to reports.
However, it’s far from a done deal for Unilever. It has stiff competition from Spam owner Hormel Foods, while bids from other firms, such as spice specialist McCormick & Co and Birds Eye’s Pinnacle Foods, are also expected.
Reckitt’s food arm had sales of £411m last year. The firm is looking to sell it on as it now sees its future in consumer health rather than food.
In February, Reckitt, whose brands include Lysol cleaning products and Durex condoms, agreed to buy US baby food firm Mead Johnson for £13 billion, in a bid to take its business in a new direction and boost work in Asia.
Twitter continues to expand into sport as it bids for PGA rights
Twitter already has sport broadcasting deals in the US with the likes of the NFL and it could be set to broaden its sports coverage even further.
According to the Financial Times, Twitter has emerged as a potential bidder for US PGA rights in the UK after Sky failed to agree an extension to its contract with the prestigious golf event.
The Financial Times reports a series of briefings that named Twitter as a potential bidder for the digital media rights.
Twitter has already carried a number of minor PGA competitions as part of its foray into sports coverage, but the US PGA would be its biggest event to date. Experts warn Twitter’s move would be a huge blow to Sky.
A serious cyber attack could cost the global economy £92bn
Insurance firm Lloyds of London has warned that a serious cyber-attack could cost the global economy more than $120bn (£92bn) – as much as catastrophic natural disasters such as Hurricanes Katrina and Sandy.
In a new report, it says the threat posed by global cyber attacks has spiralled and will pose a huge risk to business and governments over the next decade. And it warns the most likely and most damaging scenario would be a malicious hack that takes down a cloud service provider.
“This report gives a real sense of the scale of damage a cyber-attack could cause the global economy. Just like some of the worst natural catastrophes, cyber events can cause a severe impact on businesses and economies, trigger multiple claims and dramatically increase insurers’ claims costs,” says Inga Beale, chief executive of Lloyd’s.
“Underwriters need to consider cyber cover in this way and ensure that premium calculations keep pace with the cyber-threat reality.”
Almost a third of British businesses have no plans for Brexit
As Theresa May continues to negotiate Britain’s exit from the European Union, a new poll has suggested the majority of brands are woefully underprepared for the outcome.
A survey by the Institute of Chartered Accountants in England and Wales (ICAEW) shows only 29% of UK companies had made concrete Brexit plans. And the poll of 500 business leaders showed less than half had even thought about the financial pportunities or risks presented by the UK’s exit from the UK.
Michael Izza, chief executive of the ICAEW, says the hopes of entrepreneurs seeking new markets would become little more than a “pipe dream” unless policy makers did more to support them. He believes government complacency over issues such as the single market is sending the wrong message to businesses.