Uber, Holland & Barrett, Harry’s: Everything that matters this morning

Good morning and welcome to Marketing Week’s round-up of the news that matters in the marketing world today.

Harry’s razor business bought for $1.4bn

Subscription-based razor brand Harry’s has been bought for $1.4bn by Edgewell Personal Care, which owns shaving giant Wilkinson Sword.

Harry’s founders Andy Katz-Mayfield and Jeff Raide will join Edgewell Personal Care as co-presidents.

Harry’s launched only six years ago but has shaken up the stale razor sector with its innovative approach and direct-to-consumer subscription-based model, where customers pay for a certain number of blades each month. The company also sells face washes, lotions and women’s products under its Flamingo line.

Consumer goods giant Unilever made a similar move in 2016 when it purchased Harry’s rival, Dollar Shave Club, for $1bn.

Harry’s founders formed the New York-based business because they believed existing razors were too expensive and over-designed.

The global men’s grooming industry is expected to reach $78.6bn by 2023, up from $57.7bn in 2017, according to research from ResearchAndMarkets.com.

Uber valued at $82bn, below predictions

Uber is asking for a valuation of $82bn in its Wall Street debut.

While the figure is below the $100bn the company was initially hoping for, it still makes the move one of the biggest stock market flotations of the year.

It also marks the highest profile flotation since Facebook, according to analysts.

The ride-sharing app has priced its shares at $45, which is at the lower end of the predicted $44-50 per share.

It had hoped for a higher valuation but eagerness has likely been subdued as a result of a lack-lustre performance of shares in rival Lyft, which floated in March and has since lost 27% of its IPO strike price, the Guardian reports.

Lyft’s flotation was initially listed at $72 per share.

Uber hopes to sell 180 million shares when trading starts on Friday and is keen to avoid a similar fate to Lyft. However, it has failed to make a profit so far and has warned it may never do so.

Hamleys sold to Indian partner in £70m deal

Renowned British toymaker Hamleys has been snapped up by India’s richest man, Mukesh Ambani, in a deal said to be worth almost £70m.

Citing a report in Forbes, the BBC says 62-year-old Mr Ambani, who owns Reliance Brands Limited, is worth $50.7bn.

Hamleys was founded in 1760 and is the world’s oldest toy shop. It has 167 stores across 18 countries and is famous for its seven-story store on London’s Regent Street.

Reliance Industries already operates 88 Hamleys stores across 29 Indian cities.

Previously, Chinese footwear group C.banner International bought Hamleys from France’s Ludendo Groupe for £100m in 2015. Before that it was owned by Icelandic investment group Baugur, which bought it off the stock exchange in 2003.

“The worldwide acquisition of the iconic Hamleys brand is a long-cherished dream come true,” Darshan Mehat, CEO of Reliance Brands Limited, says in a statement.

Last year Hamleys reported a £9.2m loss.

Creditors support Debenhams’ turnaround plans

Debenhams creditors have supported a restructuring plan that includes the closure of 50 of its 166 stores across the UK as well as rent reductions at others.

The struggling retailer says more than 75% had voted in favour of its Company Voluntary Arrangement (CVA) plan, which involves the rent cuts as well as closures.

Debenhams has already listed the 22 stores set to close next year and is predicted to see almost a third of its locations shut down.

“I am grateful to our suppliers, our pension stakeholders and our landlords who have overwhelmingly backed our store restructuring plans. “We will continue to work to preserve as many stores and jobs as possible through this process,” says Debenhams’ executive chairman, Terry Duddy.

The announcement came hours after administrators rejected all takeover bids for the struggling firm.

Celine – a group consisting of Debenhams’ lenders which took over last month – said the bids were “not at the level required to be taken forward”.

However, Celine’s chief revenue office, Stefaan Vansteenkiste, said the investor consortium is a “committed long-term owner”.

It has since injected £200m to fund Debenhams’ “financial restructuring process” and “operating turnaround”.

Holland & Barrett to stop selling wet wipes in sustainability push

Holland & Barrett will become the first UK high street retailer to stop selling wet wipes in a bid to limit the damage they have on water ways.

As part of the initiative, the health food chain will remove all 34 products from its wet wipe range across its 800 stores in the UK and Ireland from the end of September.

The company plans to replace the wet wipes with sustainable, waste-free or reusable alternatives. These include double-sided washable clothes, cotton pads and exfoliating mitts.

According to the EarthWatch Institute, 9.3m wipes a day are flushed down UK toilets.

While some wet wipes are labelled as “flushable”, many contain plastic or wood, meaning they take years to break down when disposed of. Wet wipes are often to blame for blockages in sewer systems and wreaking havoc on the environment.

The Guardian reports that during a beach clean last year, the Marine Conservation Society found an average of 12 wet wipes per 100 metres of beach cleaned, up more than 300% compared to 10 years prior.

Thursday, 9 May

Facebook relaxes rules on crypto-ads as anticipation builds about ‘FaceCoin’

Facebook has lifted some of its restrictions on cryptocurrency adverts as anticipation hots up that the social media giant is poised to release its own crypto coin.

As of yesterday, Facebook no longer requires pre-approval for ads connected to blockchain tech, news, education and events linked to cryptocurrency. However, clearance will need to be given for ads promoting specific cryptocurrencies. A ban still remains on adverts promoting initial coin offerings (ICOs), which is when a new cryptocurrency goes public.

The Facebook ban on advertising for Bitcoin, cryptocurrencies and ICOs was put in place 16 months ago after a series of scams during the height of the cryptocurrency boom.

The changes to the crypto ad rules come as news emerged last week in the Wall Street Journal that Facebook is looking for $1bn in investments to back the launch of its own crypto coin, dubbed FaceCoin. It was reported that Facebook wants to launch a full payments network that accepts its cryptocurrency, which WhatsApp users would be able to use to send each other money.

Sources have also suggested that Facebook could reward users with fractions of the FaceCoin currency in exchange for looking at ads.

Wholesale boosts ‘robust’ performance at Morrisons

Morrisons is reporting “good progress” across its wholesale business, which contributed 2.1% to an overall group like-for-like sales increase of 2.3% (excluding fuel) during the first quarter of 2019.

The supermarket reports that the rebrand of McColl’s stores to Morrisons Daily, and the conversion of MPK fuel forecourt stores to both Morrisons Daily and Safeway Daily, has started well with “strong sales increases”.

Morrisons credited the “robust” performance of its retail division, which contributed 0.2% of total like-for-like sales, despite the “political and economic uncertainty continuing to impact consumer confidence”. Over the Easter period like-for-like sales rose by 1.7% and were up 3.4% compared to two years ago.

“We are improving the shopping trip and becoming more competitive for customers, and are pleased with another quarter of positive like-for-like sales,” says chief executive, David Potts.

Going forward Morrisons expects the market to remain “competitive and challenging”, taking into account the “favourable” summer weather and the World Cup boost the business experienced during the second quarter of 2018. The supermarket says it remains confident of many “sales and profit growth opportunities ahead”.

L’Oréal launches personalised direct-to-consumer hair colour brand

L’Oréal has launched Color&Co, a direct-to-consumer hair colour brand offering personalised dye kits.

The consumer messages the Color&Co team, explaining their “hair colour goals”, after which they are matched with an independent, licensed colourist who specialises in your specific look. After a video chat with the colourist, who evaluates your hair and prescribes a specific formula, the consumer receives a personalised kit a few days later including a custom hair dye and personalised instructions.

The kits are being sold as one-off sets or on a subscription, which starts on a trial for $9.90.

Guive Balooch, vice president of L’Oréal’s Technology Incubator, describes Color&Co as an opportunity to cater to consumer demand for “increasingly personalised experiences” in hair colour, which is a “cornerstone” of the business.

Mike Ashley plans to create luxury mini-chain out of seven House of Fraser stores

House of Fraser’s owner Mike Ashley is developing plans to turn seven of the retailer’s stores into a new luxury mini-chain called Frasers, it has been reported.

Ashley has told suppliers he wants to split the business into two separate divisions, according to The Guardian. Under the plans, Frasers will sell designer labels and House of Fraser will cater to the mass market.

The move is part of a wider turnaround strategy for House of Fraser after Ashley’s Sports Direct bought the retailer out of administration for £90m in August last year. Ashley said at the time he wanted to turn the 59-store chain into the “Harrods of the High Street”.

It is understood work on the new luxury mini-chain will begin at the department store group’s Glasgow store, which already trades under the Frasers name. House of Fraser’s Belfast store is another expected to be rebranded and included in the plan.

However doubts remain about how many House of Fraser stores Ashley will be able to keep open. Last month the landlord of a store in Altrincham served Sports Direct notice to leave the premises and said others could follow suit.

Diageo gets green light for ‘world class’ whisky tourist experience

Diageo has been given the green light to transform the former House of Fraser department store on Edinburgh’s Princes Street into a “world class” whisky tourist destination.

The latest phase of Diageo’s £150m investment in its Johnnie Walker brand, the whisky destination is described as a “multi-sensory immersive visitor experience” spanning three floors of the vacant building. The experience will guide visitors through the 200-year history of the brand, teaching them about the “art and science of whisky-making”.

The plans suggest there will be an events space for staging music, art, theatre and community events. While there will be a roof-top bar offering views of Edinburgh Castle, at street level plans include a “significant retail space” in the style of the Johnnie Walker retail flagship store in Madrid, opened in November.

Further inside, the bar academy area will act as a base for Diageo’s Learning for Life programme, which creates training and employment opportunities in the hospitality industry for unemployed people.

The drinks giant predicts that, when fully operational, the tourist experience will create 160 to 180 full-time equivalent jobs and generate £135m in tourism spend.

Wednesday, 8 May

https://www.youtube.com/watch?v=EQL4tl0U_5o

Paddy Power’s Giggs ad banned for glamorising gambling

An ad for Paddy Power featuring Ryan Giggs’ brother Rhodri driving a sports car and drinking champagne has been banned by the ad watchdog for “glamorising gambling”.

The ad, which is for the bookmaker’s loyalty scheme Paddy Power Rewards Club, shows how the footballer has led a “normal but loyal life”, by always drinking in the same pub, going to the same gym, etc.

While in the pub a woman behind the bar asks, “Bitter?” to which he replies, “Not anymore, Pam. Champagne please”, hinting at the alleged affair his brother had with his wife. He then adds, “Problem is, loyalty gets you nowhere. Live for rewards instead. That’s why I’m Paddy’s Rewards Club Ambassador,” before he’s seen driving off in a sports car.

The Advertising Standards Authority (ASA) received five complaints that challenged whether the ad was irresponsible by glamorising gambling and suggesting it was a way of achieving a good standard of living.

The ASA ruled that consumers would understand the life Rhodri was shown to be enjoying was not the result of gambling and instead a tongue-in-cheek nod to the fact he is loyal while his brother is deemed disloyal by comparison.

But the ad has been deemed irresponsible because Rhodri is heard enquiring about his bank balance and then ordering champagne rather than his usual drink, as well as driving a sports car that he’s received as a result of his association with Paddy Power, which is accompanied by the line “loyalty gets you nowhere, live for rewards instead”.

It says in its ruling: “We considered that created the impression that Rhodri was no longer defined by the alleged affair and that he had moved past his “loyalty” and was now reaping the rewards, both financially and in terms of his own self-image. The ad implied viewers should follow his example, and that their route to doing so was joining Paddy Power’s Rewards Club. For that reason, we considered the ad implied gambling was a way to achieve financial security and improved self-image, and we concluded the ad was irresponsible.”

Google unveils cheaper smartphone and raft of security updates

Google unveiled a host of new products and updates at its I/O developer conference yesterday (7 May), as Google CEO Sundar Pinchai said the tech giant’s mission is shifting from a company that “helps you find answers” to one that “helps you get things done”.

This includes the launch of its new, lower cost Pixel smartphones, the Pixel 3a and 3a XL, which will sell for roughly half that of the original Pixel 3 launched seven months ago.

It also showed off its latest voice-controlled smart home product, the Nest Hub Max. The device has a larger 10 inch screen compared to the seven inch screen of the previous model, and it now features a camera, which can be used for video chats and home security.

Google also introduced additional security features to help consumers better control their privacy. These include a new incognito mode for Maps and Search that will ensure results aren’t connected to consumers’ Google accounts, the ability to block cross-site tracking, and filters that auto-delete web activity and app data.

Purplebricks founder quits as global expansion deemed ‘too rapid’

Purplebricks’ founder and chief executive Michael Bruce has left the company, causing its shares to drop by more than 5%.

The online estate agent has also said it is pulling out of Australia after two and a half years as prospective returns are “not sufficient to justify continued investment”. It is also putting its US business under review.

Chairman Paul Pindar apologised to shareholders for its recent “disappointing” performance and admitted its rate of global expansion had been “too rapid” with hindsight.

Purplebricks is more optimistic about its UK business, however, despite the challenging market.

The company’s chief operating officer Vic Darvey will succeed Bruce as CEO.

Selfridges removes palm oil from all own-brand products

Selfridges has become the first major UK retailer to remove palm oil from all its own-brand food products.

The department store says 300 products from its Selfridges Selection range have now been replaced with alternatives derived from rapeseed, soybean and sunflowers, with the phase-out being completed nine months ahead of schedule.

Selfridges’ managing director Simon Forster says: “We’re committed to buying better to inspire change, and the removal of palm oil from our Selfridges Selection range is the latest demonstration of this approach.

“We believe that until certified palm oil guarantees zero deforestation, our customers should be given the option to buy palm oil-free products. Our expectation is that all brands we work with are aware of and actively engaging with the issues surrounding palm oil and deforestation.”

Virgin Media urges companies to sign disability employment pledge

Virgin Media has partnered with disability charity Scope to urge more businesses to help tackle the UK’s disability employment crisis.

The #WorkWithMe pledge is an initiative designed to bring together large and small companies to help improve workplace practices and support a million disabled people gain the skills and confidence they need to get and stay in work.

Committing to the pledge is free, and comprises a five-step plan to encourage businesses to take accountability and improve workplace policies, practices and culture for disabled people. They also also get access to a suite of free resources.

As part of the commitment, a senior leader must take accountability for disability inclusion, the company must complete a review of how it supports disabled people, and commit to helping line managers become better equipped to support disabled people.

Businesses must also record their progress on disability inclusion, such as measuring the number of disabled people employed and tracking disabled employees’ views on how well the company is doing at creating inclusive workplaces, and they must share best practice and lessons.

So far, 19 companies, including Philips and JCB, have signed the pledge.

It comes as new research by YouGov reveals businesses are fuelling the crisis as they have outdated attitudes resulting in one million disabled people wanting to work but not being given the opportunity to do so.

More than half (56%) of the HR decision makers surveyed believe the main reason disabled people don’t get jobs is because they lack the right skills or qualifications. A quarter (26%) of businesses questioned claim that they have never had a disabled candidate for a job interview, despite there being 7.6 million disabled people of working age in the UK.

Meanwhile, 11% think disabled people should accept lower paid positions, and 23% think disabled people need to adapt better to a business’ culture.

Jeff Dodds, managing director at Virgin Media, says: “Companies big and small now need to come together to help put an end to this disability employment crisis. I’ve seen first-hand the benefits of working with disabled people and I want other businesses to see them too.”

Tuesday, 7 May

Google ads found to promote businesses charging extra for services

Google has been promoting ads for businesses which charge fees for services that the official companies or bodies providing those services offer at a lower price or free.

The investigation by the BBC found numerous examples of paid ads featuring higher in Google’s search engine, including a firm charging £49 for changing an address on a driving licence, which is something the DVLA does for free.

Meanwhile, a company selling visas for China for tourists with a UK passport came first in the rankings, charging more than double the Chinese Embassy, which is seventh on the search results page.

A Google spokesperson told the BBC: “We have policies that prevent ads for paid products or services that are available from a government or public source for free or at a lower price, unless they offer a clear added value.”

Google says it will investigate the findings.

Boots launches Fenty Beauty concession

Boots UK has launched Fenty Beauty by Rihanna as part of its plans to transform the high street beauty experience.

The global beauty brand will be available in 32 stores across the UK and online, with a wait list available so customers can sign-up to be the first to buy.

“Fenty Beauty by Rihanna could not be more in tune with our shared values of making everyone feel great, all of the time,” says Seb James, senior vice-president and managing director of Boots.

“Launching Fenty Beauty is a pivotal moment in Boots’ beauty reinvention as we reimagine and redefine what to expect from high street beauty.”

To celebrate the launch, five Boots stores will host customer events across London Sedley Place Oxford Street, Westfield White City, Glasgow, Nottingham and Newcastle from Friday 10 to Sunday 12 May.

Boots will also be doing a “full takeover” on its social media channels.

Topshop could go into administration

Topshop is reportedly on the brink of collapse and could face administration.

According to the Guardian, Sir Philip Green’s Arcadia Group, which owns Topshop, is currently looking to secure a rescue restructure that would close around 50 of its 570 British stores.

If a deal cannot be reached before Arcadia’s next rental payment in June, it is likely Topshop will go into administration.

“The brands have been underinvested over many, many years and have lapsed into irrelevancy to their target market,” says Patrick O’Brien, a retail analyst at GlobalData.

“If you look at Miss Selfridge or Dorothy Perkins, these are very outdated brands that really don’t resonate with the sort of shoppers going online to Asos or Boohoo.”

Eurotunnel unveils birthday campaign

Eurotunnel is marking its 25th anniversary with an advertising campaign which focuses on all the customers who’ve travelled via Eurotunnel in the past quarter century.

“When the first cars went through the Eurotunnel in 1994, it was regarded as one of the biggest engineering achievements of the modern age – it gave Britain and France both a huge sense of pride and achievement,” explains Jae Hopkins, Eurotunnel’s director of sales and marketing.

“We wanted to recapture that feeling of adventure, freedom and pride with this work, and to toast all the adventures we’ve helped create, as well as those to come.”

The ad, by creative agency Southpaw, addresses: “Snowboarders, surfboarders, feet up on the dashboarders, boot-fillers, bike rack fillers, wine rack fillers, those on four legs, first legs and away legs, nature lovers, adventure lovers and well – just lovers,” concluding: “it might be our 25th birthday, but we’re wishing you many happy returns.”

It will run across TV, cinema, out-of-home in London and the South East, radio, online display and social media.

Calls for new laws around political advertising

The Electoral Commission is lobbying for a change in law to make political adverts show who paid for them.

Speaking to the BBC, the UK watchdog’s director of regulation, Louise Edwards, says online adverts should be treated the same as printed election material and that digital campaigning needs to be more transparent.

“What we need and what we’re calling for is a very clear change in the law to make parties and campaigners say on the face of their advert, who they are, who’s paid for that advert and who is promoted,” Edwards says. “These are things we think are important and we’d like to see them in place.”

According to the Commission, spend on online campaigning doubled between the 2015 and 2017 General Elections.

Facebook has hit the headlines on numerous occasions following concerns around its role in facilitating foreign intervention in elections and spreading misinformation.