Kurt Geiger To Try On Another New Owner

By Mark Kleinman, City Editor

The upmarket shoe retailer Kurt Geiger is preparing to try on another new owner less than a year after its last buyout.

Sky News understands that the company's management and their backers at Sycamore Partners, an American private equity firm, have hired bankers at Goldman Sachs to explore a sale of part or all of the business.

An outright sale would be the latest in a string of deals involving Kurt Geiger, which prides itself on its celebrity customer base and which operates footwear concessions in department stores including Harrods and Selfridges.

Jon Hamm, the Mad Men actor, and ‎the model Rosie Huntington-Whiteley are among prominent fans of the brand.

The price tag attached to the fashion label, which is moving into the children's footwear market, is unclear‎ although analysts said it could be in the region of £300m, roughly equivalent to last year's estimated sales figure.

The brand was bought by Jones Group, a US fashion company, in 2011 in a deal worth £215m.

Jones' subsequent troubles led it in April last year into the arms of Sycamore, which days later sold a stake to Kurt Geiger chief executive Neil Clifford and other senior managers.

At the time, Mr Clifford said:

"We believe our company has tremendous potential for growth in the UK and internationally, and we will continue to invest in new opportunities alongside our department store and brand partners."

In a recent interview with The Times‎, Mr Clifford raised the prospect that Kurt Geiger could abandon its US operations, citing the need for substantial infrastructure investment to make a success of the move.

Preparations for another sale could take several months, with Kurt Geiger expected to appeal to private equity firms for investing in the luxury goods and retail industries, as well as international fashion houses.

A stock market listing is another possible alternative.

In addition to its hundreds of concession operations, Kurt Geiger sells its own brands‎ such as Carvela in more than 70 stores around the world.

Kurt Geiger's first shop opened on London's Bond Street in 1963, but it took until 2007 before its first significant overseas expansion into Europe and the Middle East.

Four years after that, the business was sold to Jones Group by Graphite Capital, a private equity firm which had bought it from Barclays' buyout arm in 2008.

Prior to Barclays, Kurt Geiger had been owned by Mohamedd Fayed, the then owner of Harrods.

Sycamore Partners and Goldman Sachs both declined to comment.

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'Google Tax' In Force To Tackle Avoidance

Multinational companies that shift their profits offshore to avoid tax now face being slapped with a levy.

The diverted profits tax (DPT), which has now come into force, aims to crack down on the controversial practice which has sparked criticism of companies like Google, Starbucks, Amazon and Apple.

Only last month, a financial watchdog highlighted its continuing concerns that multinational companies trading in the UK were not paying the right amount of tax.

Members of the Commons Public Accounts Committee said evidence given by Google, Starbucks, Amazon and large accountancy firms showed the use of tax avoidance measures was "widespread".

In 2013, Facebook paid just £3,169 in tax, while Amazon paid £10m, Apple £11m and Google £11.6m.

Video: 18 March: Multinationals Targeted

At the same time, the total revenues of the four companies in the UK was more than £17bn.

Meanwhile, it was revealed Starbucks paid no corporation tax between 2009 and 2012.

Despite sales of £400m in 2011, the coffee giant claimed it had made a loss in those years and so paid no tax.

There has been mounting pressure to tackle tax avoidance in the face of the austerity-driven spending squeeze.

The so-called "Google Tax" will see firms charged 25% on profits artificially siphoned offshore.

It is expected to make £25m for the Treasury this financial year, rising to £360m by 2020.

Other changes being introduced from April 1 include reducing the rate of Corporation Tax paid by companies from 21% to 20%.

These were highlighted by Chancellor George Osborne as 100 leading business figures gave their backing to the Conservatives and said Labour would damage Britain's economic recovery.

He said: "Their message is positive: under David Cameron's leadership, we have an economic plan that is working and creating jobs.

"Today that plan sees corporation tax cut again to 20%, and a new diverted profits tax so those low taxes are paid."

Labour's shadow business secretary Chuka Umunna has hit back at the open letter, saying: "No one will be surprised that some business people are calling for low taxes for big businesses."

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Tories Woo New Backers As Boots Boss Says No

By Mark Kleinman, City Editor

The Conservatives have embarked on a fresh attempt to court backing from the business community hours after the publication of a letter warning against "a change in (economic) course" pursued by a Labour administration.

Sky News can reveal that Lord Feldman, who chairs the party's board and was responsible for organising a pro-Tory letter in Wednesday's Daily Telegraph, has urged other business leaders to add their support for a Conservative government.

"I hope you have seen the Daily Telegraph today that has published a letter with over 100 business leaders supporting the Conservative's policy to lower corporation tax to 20% effective today," Lord Feldman wrote in an email to company executives obtained by Sky News.

"I am writing to ask if you would consider adding your name as a signatory to this letter.

"It is clearly important to send a signal that the business community is behind the Conservatives' long-term economic plan, and does not want to see a change of course."

Sky News also understands that the boss of Boots, the high street health and beauty retailer, was asked to sign the original letter but declined, just weeks after being attacked by Ed Miliband for predicting that a Labour election victory could be "disastrous" for the UK economy.

Stefano Pessina, who runs the US-headquartered Walgreens Boots Alliance, opted not to put his name to the letter because as a Monaco resident he is not entitled to vote in UK elections.

In a statement, a spokeswoman for the company, which employs tens of thousands of people in the UK, said: "As Stefano Pessina is not a UK citizen and does not vote in the UK, he would not sign any letter to support a political party in the UK General Election.

"Furthermore, he has not previously signed any letters to back political parties on such occasions.

"As a businessman, international entrepreneur and investor, Stefano naturally takes a keen interest in the overall business environment in the countries in which he leads businesses.

"With this in mind, he has previously expressed views regarding certain business policies and recommendations, especially regarding the UK economy to which he has been very committed and highly supportive for 20 years."

Mr Pessina was stung by the Labour leader's accusation in February that he was "avoiding his taxes", an allegation he strongly denied.

Although Mr Pessina and others approached about the letter declined to sign it, its publication will reinforce the widely held perception that the Conservatives enjoy far stronger support from the business community than Labour.

Under the Tory-led coalition, corporation tax has been reduced to 20% following a string of annual cuts which Labour has pledged to reverse in order to favour tax cuts for smaller companies.

It is unclear whether the Conservatives plan to publish an updated version of the letter once new signatories are added.

George Osborne, the Chancellor, said the letter represented an "unprecedented intervention" in a General Election campaign.

"A hundred business people, employing over half a million people and leading some of Britain's best-known companies, from Primark to the Prudential and from BP to Britvic and Mothercare have spoken out," he told Sky News.

Some observers suggested, however, that after weeks of corralling support, the Tories would have been disappointed to enlist support from the chief executives of only three FTSE-100 companies: Associated British Foods, BP and Prudential.

The festering row about business support for the main parties further deepened on Wednesday when Chuka Umunna, the Shadow Business Secretary, said that Paul Walsh should not become the next president of the CBI after opting to show support for the Conservatives.

Sky News revealed in February that Mr Walsh, the former chief executive of Diageo, was being lined up to succeed Sir Mike Rake, and his appointment is expected to be confirmed later this month.

A CBI spokesman said: "The CBI is a politically neutral organisation and its senior post holders will always act impartially.

"The CBI has made no announcement about its next president."

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Miliband: Epidemic Of Zero-Hours Contracts

By Jason Farrell, Senior Political Correspondent

Workers on zero-hours contracts will be able to demand a regular contract after 12 weeks under proposals announced by Ed Miliband.

The Labour leader promised to outlaw the "exploitative" contracts in a commitment to be included in Labour's election manifesto saying: "We have got to end the epidemic of zero-hours contracts.

Speaking at an event in Huddersfield, Mr Miliband said: "You shouldn't be left at the beck and call of an employer who can ask the world of you but give you no security in return. It's not fair, it's not good for businesses and we will put a stop to it."

The proposal strengthens Labour's previous policy on the contracts, which sought to give workers the right to a regular contract after 12 months.

:: For full coverage of General Election 2015 click here

Video: Zero-Hours Contracts

The announcement comes after Prime Minister David Cameron admitted that he could not live on a zero-hours contract during questioning from Jeremy Paxman on Sky News' Battle For Number 10 programme.

Mr Miliband said zero-hours contracts have become a symbol of a low-wage, low-skill economy.

In reference to Mr Paxman's interview with the Prime Minister, the Labour leader said: "If Cameron can't live on it, nor should you - Labour will give workers a legal right to a regular contract, not a zero-hours contract.

"Today I can announce that in our first year of government after the election, Labour will legislate for a new principle: If you are working regularly, you have a legal right to a regular contract."

Mr Miliband first set out the 12-week proposal in 2013 at the Trades Union Congress (TUC) conference, but later backtracked.

Video: Zero Hours 'Gone Too Far'

A spokesman for the party leader said the change back to 12 weeks would incorporate 92% of people on the controversial employment terms.

The proposal is expected to include exemptions for employees such as so-called bank nurses, who request a zero-hours contract so they can work at another hospital as well as their usual job.

Mr Miliband was asked by a worker at the Huddersfield factory what was to stop employers only providing work for 11 weeks to dodge the provision. He replied a "legal mechanism" would be put in place to prevent it.

The Coalition Government sought to prohibit exclusivity clauses in zero-hours contracts, but the Labour Party argues this does not go far enough.

A Conservative spokesperson accused Labour of "presiding over zero-hours contracts" for 13 years.

Video: Osborne Under Fire Over Zero Hours

"Zero-hours contracts account for just one in 50 jobs in our economy," the spokesperson said.

"This Government has already banned the abusive ones - and all the while Labour presided over zero-hours contracts with no safeguards for three terms and 13 years while they were in power."

Speaking on the campaign trail Boris Johnson, who is running for MP in Uxbridge, said he would rather people were in work than left feeling "ill-used by society, left out, unable to express themselves with their self-esteem sinking and sinking."

:: Watch the seven-way leaders' debate live and in full from 8pm on Thursday on Sky News, on Sky channel 501, Virgin Media channel 602, Freeview channel 132, Freesat channel 202, and on the Sky News website.

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Insurer Hastings Motors Towards £1bn Listing

By Mark Kleinman, City Editor

The owners of Hastings, one of the UK's fastest-growing insurers, have appointed investment bankers to steer the company towards a £1bn post-lection flotation.

Sky News understands that Hastings has appointed Goldman Sachs and Credit Suisse to oversee a review of the company's options to take place during the coming months.

Although any deal is unlikely to take place until later this year at the earliest, it will still mark a rapid exit for Goldman's merchant banking arm, which acquired just under 50% of Hastings in October 2013.

The appointment of Goldman bankers to work on a prospective flotation means that the Wall Street firm will earn money from its advisory work as well as the return on its investment in Hastings.

Insiders said that the insurer, which was valued at approximately £700m by its most recent deal, is expected to seek a valuation "significantly closer" to £1bn in a future transaction.

Just under half of Hastings is owned by the company's founders, with the balance held by management, including Gary Hoffman, the chief executive, and employees.

Under Mr Hoffman's leadership, Hastings has demonstrated rapid growth, reporting that customer numbers had reached 1.65m by the end of September last year, up from 1.35m 12 months earlier.

The company, which is due to announce another round of financial results next week, also reported significant increases in net revenue and market share, with adjusted pre-tax profit in the year to date up by 18%.

A stock market listing is expected to be the default choice for Hastings' management and shareholders, although recent takeover activity in other areas of the insurance sector will mean that they also remain open to an outright sale.

During the last deal, Goldman invested £150m in return for just under 50% of Hastings' equity, with Neil Utley, its chairman, crystallising a fortune worth tens of millions of pounds from the sale of part of his stake.

Hastings also raised approximately £420m from a bond sale at the same time.

Based in Bexhill, East Sussex, Hastings employs more than 1500 people, over 80% of whom are understood to be shareholders in the company.

Mr Hoffman led the turnaround of Northern Rock during its period in Government ownership following the run on the mortgage lender in the autumn of 2007, which heralded Britain's banking crisis.

He then spent two years as chief executive of NBNK Investments, a vehicle set up to acquire retail banking assets, but which was rebuffed in favour of the Co-operative Group in the contest to buy 632 branches from Lloyds Banking Group.

That deal collapsed amid a financial crisis at the Co-operative Bank, leading to the branches being rebranded as TSB and listed on the stock market.

A Hastings spokesman declined to comment on Wednesday.

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M&S Reveals Like-For-Like Sales Up 0.7%

Marks & Spencer has revealed like-for-like sales of food and clothing are up 0.7%, the first rise in sales for 14 quarters.

The retailer issued a trading statement for the 13 weeks to 28 March, which also revealed that total like-for-like UK were up 0.7%, group sales were up 1.9% and international sales were down 3.8%.

The lift in sales, the first rise in more than three years of trading, has been attributed to a customer response to changes in "product quality and styling" and an increase in the sale of more full-price items.

Food sales were also helped by record Valentine's Day trading.

The group said its spring and summer collections have been well received, including its much talked about suede skirt.

M&S is pleased with the response to its 70s-style suede skirt

M&S shares opened up 4% after the fourth quarter sales figures beat City expectations. Analysts had expected a 1.2% drop in like-for-like sales.

The company said that online sales returned to growth of 13.8%, with traffic numbers and customer satisfaction ratings continuing to improve since distribution problems hit Christmas trading.

Marc Bolland, chief executive, has faced increasing pressure to turn around the clothing business.

He said: "We have made strong progress over the quarter. In food we delivered another excellent performance, with sales growth ahead of the market.

"We continued to deliver on general merchandise gross margin, and are pleased that we have achieved this whilst also improving general merchandise sales."

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Energy Firm Pays Heavy Price For Overcharging

Energy firm E.ON is to hand £7.75m to Citizens Advice for customers who were overcharged after price rises.

The sum is on top of the £400,000 E.ON has already paid back money to others who may have been affected.

Regulator Ofgem said the penalty reflected the company's "repeated failing" on billing rules.

It wrongly imposed exit fees and overcharged customers following price rises in January 2013 and January 2014

Under Ofgem rules firms are not supposed to apply exit fees if a customer signals their intention to move supplier within the standard 30-day notice period of a price increase.

Video: Energy Firms Fail On Cuts Promises

This is the case even if the switch occurs after the rise.

Sarah Harrison, Ofgem's senior partner in charge of enforcement, said: "(Our) rules give customers a chance to avoid exit fees and higher costs when suppliers put up prices.

"These are important customer protections and it is vital that suppliers play by the rules so customers are encouraged to engage in the market."

Video: Consumers 'Duped' Over Energy Deals

In November 2012, E.ON, one of the UK's six biggest energy suppliers, was required to pay £1.7m for similar failings.

Ms Harrison commented: "It's absolutely unacceptable that E.ON failed to provide these vital customer protections yet again and this persistent failure is the reason for the high penalty."

The errors in respect of price rises in January 2013 and 2014 affected direct debit and standard credit customers. The average amount paid back was around £8 and £12 respectively.

Video: Your Energy Cost Explained

The mistakes also resulted in around 11,500 prepayment customers - traditionally the poorest - missing out on an average refund of £3.42.

E.ON is aiming to reimburse them by the end of April.

Last May E.ON was ordered to pay back a record £12m for mis-selling.

Video: Energy Bills: What We're Paying

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Temasek Snaps Up Stake In UK's Funding Circle

By Mark Kleinman, City Editor

A fast-growing peer-to-peer lending platform is to sell a stake in itself to Temasek, the Singaporean sovereign wealth fund, as part of a fundraising that will catapult it into the ranks of Britain's most valuable technology start-ups.

Sky News can exclusively reveal that Funding Circle is in advanced talks with Temasek Holdings about plans to raise well over £50m in new capital to accelerate its expansion.

Temasek, which has invested in some of the world's most valuable technology companies, including China's Alibaba, plans to invest roughly £30m as part of the deal, sources said on Thursday.

An arm of Blackrock, the world's biggest money manager, and Baillie Gifford, the Edinburgh-based asset management group, are also expected to participate in the deal, which will value Funding Circle at in excess of $1bn (£675m).

The funding round, which is likely to close within weeks, will cement Funding Circle's status as one of the UK financial technology, or fintech, sector's most exciting prospects.

Funding Circle's existing investors include funds such as Index Ventures, Accel, Union Square Ventures and Ribbit Capital.

They each stand to make substantial gains on the value of their holdings in the company, which was founded less than five years ago.

Funding Circle, which is also backed by the Carphone Warehouse co-founder Sir Charles Dunstone, describes its mission as being to "revolutionize the outdated banking system and secure a better deal for everyone".

Since opening for business, it has lent close to £600m and counts more than 30,000 individuals, the UK Government and local councils among those providing capital through the platform.

Pressure from the Government on banks to refer borrowers to peer-to-peer lenders when their loan applications are rejected by high street stalwarts is fuelling a rapidf growth in demand in the sector.

"Too much business lending is concentrated in the big banks," Vince Cable, the Business Secretary, said last year.

"If we're to have a properly functioning business lending market, they need to be challenged by new banks, peer-to-peer lenders and other alternative providers."

Last year, Funding Circle announced an agreement with Santander UK to refer small business borrowers to the tech company.

Samir Desai, the peer-to-peer lender's chief executive, said:

"This partnership recognises our role as the only marketplace that caters for, and is dedicated to, small businesses. In Santander we have found a fellow challenger brand that shares our commitment to putting small business customers' needs first. They have created a blueprint for other banks to follow."

Since then, other banks have struck similar deals with Funding Circle and its competitors, which offer higher interest rates than high street banks because of their lower fixed-cost bases.

Investors' enthusiasm for the peer-to-peer lending industry has also been fired by the successful initial public offering of Lending Club, the world's biggest peer-to-peer platform.

Funding Circle and Temasek declined to comment on Thursday.

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Pru Boss 'Irritated' By Labour Letter Row

By Mark Kleinman, City Editor

A row over company bosses' political affiliations ahead of the General Election deepened on Thursday amid allegations that Labour was trying to undermine the leaders of some of the UK's biggest businesses.

Friends of the Prudential chief executive, Tidjane Thiam, told Sky News that he was "irritated" at suggestions from Labour sources that he was reconsidering his backing for a pro-Conservative letter which appeared in The Daily Telegraph this week.

The letter, which was originally signed by 103 business leaders, expressed support for Tory economic policies and warned that a "change of course" could jeopardise Britain's economic recovery.

Despite indicating that Labour was unconcerned by bosses' backing for the Tories, one Labour aide suggested on Thursday that Mr Thiam had "regretted" his decision to sign the Telegraph letter.

That provoked a robust response from people close to the Prudential chief, who is leaving his role this year to head the Zurich-based banking group Credit Suisse.

Video: Labour 'Wants Business To Succeed'

"He made his views clear and they speak for themselves, so he is unlikely to be happy at anyone else trying to misrepresent his position," a friend of Mr Thiam said.

Labour had earlier seized on a decision by Pascal Soriot, chief executive of the drug-maker AstraZeneca, to withdraw his association with the pro-Tory letter.

Mr Soriot did not say why he had signed the letter, but issued a statement saying: "Neither I nor AstraZeneca endorse any political party and while I support such policies my name should not be used in the context of the letter."

Labour aides also tried to claim that the chief executive of Ladbrokes had also changed his mind about being a signatory but omitted to mention that Richard Glynn, whose name appeared on the list of supporters, stepped down this week.

Video: Business Leaders Back Tories

His successor, Jim Mullen, said he would not sign any similar letters during an election campaign.

A Conservative Party source said that Labour was trying to "intimidate or undermine" business leaders from speaking out on the economy.

Sky News revealed earlier this week that Stefano Pessina, the boss of Walgreens Boots Alliance, had been approached but declined to sign the letter just weeks after being attacked by Ed Miliband for saying that a Labour government could be "disastrous".

In Thursday's seven-way party leaders' debate, David Cameron referred to the support from business leaders as evidence for the need to keep the Tories in government.

Video: David Gauke Discusses Open Letter

The festering row about business support for the main parties was also reignited this week when Chuka Umunna, the Shadow Business Secretary, said that Paul Walsh should not become the next president of the CBI after opting to show support for the Conservatives.

Sky News revealed in February that Mr Walsh, the former chief executive of Diageo, was being lined up to succeed Sir Mike Rake, and his appointment is expected to be confirmed later this month.

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Sluggish US Economy Adds Only 126,000 Jobs

By Sky News US Team

A slow US economy added a lower-than-expected 126,000 jobs in March, though the unemployment rate held steady, as predicted, at 5.5%.

Friday's jobs reports broke a run of 12 consecutive months in which the economy added more than 200,000 jobs.

It was the smallest jobs gain since December 2013, said the Labor Department.

Job gains in February and January this year were also revised down by 69,000.

US manufacturing and construction activity is anaemic, while hiring at restaurants is down as the country emerges from a harsh winter.

Average hourly wages rose a modest 7 cents to $24.86 (£16.68) an hour.

The disappointing report could hold back the Federal Reserve from raising interest rates in the middle of this year.

Cheaper oil has hurt manufacturers as energy firms rein in orders for equipment, and has yet to show an impact on consumer spending. 

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