Mulberry's Profit To Get A Handbagging

Luxury fashion brand Mulberry has warned its full-year profit will be below expectations.

The company said pre-tax profit for the year ended March 31 is expected to be around £14m.

The Somerset-based firm, famous for its high-end handbags, said new, lower-priced items would effect the results.

The company said: "Since the appointment three weeks ago of Godfrey Davis as interim executive chairman, a review of operations and strategy has been undertaken with the management team.

"The primary objective is to reinvigorate sales by the introduction of more affordable new product."

Although the company still plans to expand internationally, the pace of new openings has been slowed by nearly 40%.

It said for the 2014-15 fiscal year only five own store openings would occur, down from eight in the previous year.

The company said it would reduce the openings to control costs while allowing existing stores to "achieve greater traction".

Mulberry also confirmed its new UK factory is fully operational, having taken on 300 additional staff.

In January, around £400m was wiped from the company's share value after it reported a drop in its crucial Christmas period sales.

Last year, the company lost its top creative star, Emma Hill, and the group is still looking for a new chief executive after the departure in March of Bruno Guillon.

It also appears that an ongoing appetite for high-priced items is diminishing, even for its regular shoppers.

Releasing the trading update, Mr Godfrey said: "Following the recent change in management, we are focusing on achieving sales growth through the reinforcement of product offering at more affordable prices to meet the expectations of our loyal customers.

"This will have short-term financial consequences but is necessary to ensure the future strength of the Mulberry brand."

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Barclays Chief Hints At Huge New Job Losses

By Mark Kleinman, City Editor

The chief executive of Barclays effectively ruled out a full-scale retreat from investment banking on Thursday but warned that a shake-up of the group potentially costing thousands more jobs at the division would be unveiled within weeks.

In a memo to staff obtained by Sky News, Mr Jenkins said a review to be announced on May 8 would answer questions about the future of Barclays, including how best to simplify the bank's sprawling operations and which of its businesses it "should focus on and invest in".

In the note, Mr Jenkins said he wanted to set out a clear path "to build a better Barclays which can deliver sustainable returns and growth over the cycle" amid increasing shareholder concerns about the bank's financial performance.

The bank's chief executive said that the May review, which will come just 16 months after he unveiled 'Transform', his programme to make Barclays more efficient, had been necessitated by ongoing industry and economic changes.

"Regulatory developments and the macro-economic environment are having a significant effect on some parts of our business which we need to address proactively and decisively," he said.

He moved, however, to end speculation that he might decide to break the group up altogether, saying: "The future for Barclays will be as a strong, focused, international bank. And the investment bank will continue to be a part of that mix."

Shareholders have complained about the pace of Mr Jenkins' cost-cutting measures as well as a 10% rise in variable pay in 2013 to £2.4bn despite a slump in profits.

City investors have set the scene for a showdown with Barclays at next week's annual general meeting over pay and bonuses, prompting it to recruit a new board member responsible for navigating remuneration issues, revealed by Sky News earlier this week.

Last year, Barclays raised nearly £6bn by selling new shares to investors at the behest of UK regulators.

A separate stock exchange statement announcing the timing of next month's review was also issued on Thursday.

Mr Jenkins' staff note is likely to mean that thousands of additional jobs will be axed at Barclays' investment bank, analysts said.

At its full-year results in February, he had signalled that roughly 12,000 roles would disappear across the group this year, with this number now likely to be revised up as part of Project Electra, the internal codename for the investment bank review.

A further announcement about a reorganisation of the markets business within Barclays' investment bank, which will involve appointing new management beneath Tom King and Eric Bommensath, the co-chief executives, will be made later on Thursday, a source said.

The reshaping of Barclays' investment bank, which employs about 25,000 people, has been taking place for several months.

It comes amid a broader slowdown affecting global investment banks' fixed-income businesses.

Barclays declined to expand on the remarks in Mr Jenkins' memo.

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Sainsbury's Sultana Recall On Salmonella Fear

Sainsbury's is recalling 500g packs of its SO Organic Sultanas as a precuation after salmonella bacteria was detected in routine testing.

The announcement was made by the Food Standards Agency (FSA), which advised shoppers who had purchased the packs not to eat the contents but return them to Sainsbury's for a full refund.

All date codes of 500g SO Organic Sultanas were affected by the recall, the FSA said, while it also confirmed that no other Sainsbury's products were known to be involved and no-one has been reported to have been taken ill.

The packets have been taken off shelves

The supermarket chain said: "We are recalling Sainsbury's So Organic Sultanas (500g packs) because low levels of salmonella were found during routine testing.

"Food safety is our top priority so we immediately took this product off display and, as a precautionary measure, we are asking customers who have bought these sultanas to return them to their nearest Sainsbury's store where they will receive a full refund.

"We apologise to customers for any concern and inconvenience this causes."

The company added that the affected packs were removed from shelves yesterday and while the product was popular at Christmas time, sales are significantly lower at this time of year.

The Public Health England website gives this advice on Salmonella: "Anyone can get salmonella, but young children, the elderly and people whose immune systems are not working properly have a greater risk of becoming severely ill.

"Symptoms include watery diarrhoea, stomach cramps and sometimes vomiting and fever.

"These symptoms usually last for four to seven days and clear up without treatment, but if you become seriously ill you may need to be treated for dehydration (fluid loss) caused by the illness.

"Transmission occurs by eating contaminated food, mainly of animal origin, or by faecal contamination from an infected person or animal."

The last major outbreak reported in Britain occurred last year when bacteria, linked to Butchers' ham, left more than 50 people sick.

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RBS 'Cleared' Of Ill-Treating Small Firms

A review ordered by the Royal Bank of Scotland has cleared the lender of fraud against small and medium-sized business customers.

The bank commissioned an independent review by law firm Clifford Chance over claims RBS systematically set out to defraud its business customers.

It was launched following an allegation made by Lawrence Tomlinson in his report that the bank's global restructuring group (GRG) targeted small companies that were in financial difficulties.

Clifford Chance concluded there was no evidence to support the claim, which the bank described as a "damaging and serious allegation".

In compiling its report, Clifford Chance interviewed 138 small business customers in the recovery unit, 45 employees and reviewed 130 files.

This involved examining 400,000 pages and 1,200 documents.

RBS CEO Ross McEwan said: "The trust that a bank has with its customers is fundamental. That trust was put at risk at RBS by the allegation of systematic abuse made in the Tomlinson report.

"I welcome the Clifford Chance findings which show no evidence of the serious and damaging allegation that we had set out to deliberately defraud our business customers."

RBS said it would now ensure it can further enhance support for small and medium-sized enterprises (SMEs) when they get into financial trouble.

It also set out further steps to rebuild trust with its customers, building on changes made in response to the findings from the separate Sir Andrew Large review.

The City regulator is still conducting its own inquiry into actions of the bank's GRG division.

RBS also said it will not charge default interest for the first 90 days when an SME customer defaults, effective until May 31, 2015.

It has also stopped what it describes as "other smaller fee practices", as it seeks to improve the "the experience for customers" when they first go into financial distress.

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PayPal Warns Users Over Sharing Computers

Online payment firm PayPal has announced plans to prevent users from sharing their computers, smartphones and tablets with anyone else, even family members.

On Tuesday, the company started sending registered users email alerts of upcoming amendments to terms and conditions.

The "Notice of changes to our Legal Agreements" showed policy changes effective June 17, in an email that ran to more than 8,000 words.

A number of the amendments covered improved buyer and seller protection for users, as the company is owned by auction site eBay.

However, the firm also warns against sharing devices under a heading of "Keeping your Payment Instrument Safe", in which changes to security procedures required by users are explained.

PayPal is tightening usage terms as more people use it for transactions

Two new sub-sections have been added amid a rise in PayPal usage by people using smartphones, tablets and other portable devices, heightening the risk of misuse by people other than the rightful owner.

The first clause relates to keeping personal account details up to date and the second to pin and password security.

The second clause adds that users must agree to "Take all reasonable steps to protect the security of the personal electronic device through which you access the Services (including, without limitation, using pin and/or password protected personally configured device functionality to access the Services and not sharing your device with other people)."

No exceptions are listed and owners are in breach of their user agreement if they do not adhere to the clause.

The notification advised: "You do not need to do anything to accept the changes as they will automatically come into effect on the above date.

"Should you decide you do not wish to accept them you can notify us before the above date to close your account immediately without incurring any additional charges."

A number of the new legal clauses relate to PayPal's interaction with eBay

A PayPal statement issued to Sky News said: "We are not banning people from sharing devices.

"The new wording in our User Agreement says that users should take reasonable care when sharing devices so their PayPal account is not compromised. For example, users are advised not to log in to PayPal and then leave their computer unattended.

"This new wording is in line with many other financial services providers and similar agreements."

The existing PayPal user agreement, which runs to more than 20,000 words, was last updated in November 2013.

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Co-op Admits 'Disastrous Year' Amid £2.5bn Loss

The embattled Co-operative Group has confirmed a loss of £2.5bn for 2013, in what it described as a "disastrous year".

The loss comes on the back of a £529m figure recorded in its 2012 results.

Interim group chief executive Richard Pennycook said: "2013 was a disastrous year for the Co-operative Group, the worst in our 150-year history.

"Today's results demonstrate that but they also highlight fundamental failings in management and governance at the group over many years.

"These results should serve as a wake-up call to anyone who doubts just how serious the challenges we face are."

It said most of the losses were from "discontinued operations" of its banking arm, which totaled £2.1bn.

Group sales were £10.5bn, down from the £11bn recorded in the previous year.

Profit from its food division were down 8% at £247m but it also recorded a goodwill impairment charge of £226m for its purchase of Somerfield stores.

The Co-operative Group consists of a number of divisions

However, it recorded more encouraging figures for some other divisions.

General insurance profit jumped from £13m in 2012 to £33m last year.

The pharmacy chain, which is being offered for sale, saw profit rise by about a fifth to £33m.

And its funeral services business saw sales up 3% to £370m and profit up £2m to £62m.

Co-operative Group chair Ursula Lidbetter said: "During 2013, it became apparent that our governance had fallen far short of the standards to which we aspire as a co-operative society.

"Now is the time to put that right through fundamental reform - we have to act with urgency if we are to lay the foundations for a stronger, healthier co-operative business in the future."

The group's bank division revealed a £1.5bn capital black hole last year and then in March announced a plan to raise another £400m.

Amid risks of the bank's collapse, the group reduced its stake in the institution to 30% as private equity bondholders provided capital - raising concerns of how it would maintain its 'ethical' stance.

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South West Hoping For Easter Tourism Boost

By Frazer Maude, Sky News Reporter

The tourism industry in the South West of England is hoping a successful Easter weekend will prove a much needed boost.

It has been estimated Devon alone has already suffered a £31m loss of trade this year because of the winter storms and floods.

One of the biggest setbacks was the collapse of the main railway line at Dawlish.

The railway line at Dawlish, Devon, was damaged in February

But the line is now open again, and it is hoped that with good weather, the region's economy could make a big dent in its 23% shortfall.

Helen Scott, from Visit South Devon, said: "Bookings were down from the start of the year, but have picked up well in the past couple of weeks.

"The reopening of the railway line has been hugely important, and with the storms behind us we want the public to know we're very much open for business."

A beachfront restaurant at Milton-On-Sea, Hampshire, was wrecked by a wave

At the award winning tourist attraction Pennywell Farm on the edge of Dartmoor, confidence is also high.

Director Angus Murray told Sky News they expect more than 4,000 visitors through the gates over the Easter weekend.

"Internet bookings were down considerably in January and February," he explains.

Huge waves battered the coast of South West England during the winter

"But this week has been really busy so far, and with the good weather that we're having we're expecting a great weekend."

Some tourism experts say the upturn in trade is positive, but would like to see a faster recovery.

All will be hoping good visitor numbers this weekend will quicken the pace.

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House Price Increases Create 'Generation Rent'

By Siobhan Robbins, Sky News Reporter

The booming housing market is causing a generation of young people to become increasingly pessimistic about their chances of getting on the property ladder, according to a new study.

Halifax's 'Generation Rent' report found that despite the launch of schemes like Help to Buy to give a boost to people with small deposits, 36% of 20 to 45-year-olds felt they have no realistic prospect of owning their home in the next five years.

Around half of those polled in England, Scotland and Wales agreed Britain will become a nation of renters in the next generation and 20% of people aged 23 to 27 said they have no desire to own their own home.

A fifth of people surveyed said they had no desire to own their own home

Caroline Hill, 23, told Sky News she would rather rent than buy.

"I can see myself being able to buy in the future but I'm just really not interested in doing so," he said.

"My parents have always been renters and I think that has had a big effect on the way I feel about it."

Danny Palmer, 27, is frustrated the market is running away from him.

"I think it's going to be really difficult for me to get onto the property ladder purely because rent these days is taking up about 40% of my salary, and that's before bills, living costs and anything else," he said.

Estate agents say high prices mean potential buyers are moving into rentals

Halifax mortgages director Craig McKinlay, said: "We may be heading towards the point where the aspiration to own a nice home will be replaced by the aspiration to simply live in one.

"It seems that people are now beginning to accept a lifetime of renting and this would not only change the way the property ladder looks in the future, it could even bring into question whether or not it will exist at all for some people."

The report warned that any future collapse in the number of first-time buyers - the "life blood" of the housing market - will have a knock-on impact on people trying to move up the property ladder.

If some existing home owners are unable to trade up because of a lack of potential buyers for their property, the market will be brought to a standstill, the report warns.

Woking estate agent Yassar Latif, said: "People who were thinking of buying, but have been let down by the rise in prices, have moved towards rentals now."

The Government has said that Help to Buy and plans to build more houses should ease the problem. But despite this, only around 30% of the people polled believed Help to Buy was working.

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The Week's Big Business Stories

Sky's Naomi Kerbel offers a round-up of what's been and what's coming up in the week's business news.

: Monday April 21

It is Easter Monday and a bank holiday in the UK. The financial markets are closed.

:: Tuesday April 22

The Chinese e-commerce business, Alibaba is expected to file its prospectus for a US flotation this week. It could be the biggest ever listing by a technology firm, estimated to be worth more than $16bn (£9.5bn).

:: Wednesday April 23

Apple reports second quarter results on Wednesday. It has no new products to boost results so is likely to announce plans to return more cash to shareholders to keep the investors hooked.

Look out for Facebook's first quarter results too. Revenue for the fourth quarter of 2013 was $2.59bn, an increase of 63%, compared with $1.59bn in the fourth quarter of 2012. Monthly mobile users stood at 945 million, up 39%. Daily mobile users grew 49% to 556 million.

:: Thursday April 24

On Thursday, Barclays will welcome shareholders to its AGM at the Royal Festival Hall in London. Focus will be on whether investors vote against the bank's plans to increase salaries and the bonus pool despite a fall in profits.

:: Friday April 25

This is the final day before changes to mortgage lending rules come into force. The aim of the new legislation is to ensure people only get a mortgage they can afford, and to prevent a recurrence of the irresponsible lending practices of the past. Every borrower will have to prove they can afford the repayments both now and in the future. 

:: Missing something? Tweet your business stories to @SkyNKTweets

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British Gas Bonus Claims To Be Investigated

Claims that British Gas workers have been paid large bonuses to inflate customer bills are to be investigated by the energy regulator, Ofgem.

It comes after a former employee claimed the energy company encouraged its sales staff to sign up charities, churches and small businesses to its highest-priced tariffs in order to boost their own earnings.

British Gas has strongly denied the allegations.

The whistleblower, who worked for the company between 2010 and 2013, told the Daily Mail the firm's policies were designed "to rip off" customers.

He claimed sales agent typically earned between £4 and £37 in commission per deal if they persuaded existing customers to renew contracts.

But by moving a customer to a more expensive deal they could earn more than £400 a time, he alleged.

"People were desperate to make the salaries they had been promised, so everyone inflated the prices," he told the paper.

"Scout clubs was a favourite one; churches, charities, small businesses, where people would just go for the maximum 5p notch-up," he added.

Ofgem will investigate whether the sales activities were 'honest and fair'

A British Gas spokeswoman said: "British Gas strongly refutes any suggestion that employees are paid commission on any prices charged to residential customers."

British Gas Business managing director Stephen Beynon said his sales agents are paid commission, but he denied any suggestion that contracts were negotiated inappropriately.

"This is a highly regulated market, and every part of the sales negotiation process is closely monitored," he said.

"Sales agents in British Gas Business do receive commission, but we are reducing its importance.

"We're leading the way in addressing the variability in price that customers face in this market, and we'll continue to do so."

Ofgem said in a statement: "There are strict rules in place which require suppliers to take all reasonable steps to ensure information provided is accurate and not misleading, and that sales activities are conducted in a fair, honest, transparent and professional manner.

"Ofgem is an evidenced-based regulator and we would encourage anyone with information that an energy company is not complying with Ofgem rules to provide us with this."

Energy and Climate Change Secretary Ed Davey said: "This is a very serious and deeply disturbing allegation that comes as we are doing all we can to make the energy markets work better for all consumers - whether domestic or businesses.

"The Government fully supports Ofgem's recommendation for a full market investigation.

"In the meantime, we'll continue to help people pay less for the energy they use, driving the competition that has seen the number of energy suppliers triple since 2010 and people switching supplier in record numbers."

The allegations come days after Ofgem fined British Gas Business for a series of failures including blocking firms from switching to other suppliers.

Ofgem said British Gas Business would pay a total penalty of £5.6m of which £800,000 would be in fines, on top of £1.3m already paid to 1,200 customers who paid higher bills because they were not notified when their contracts were due to expire.

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