UK pop-up space marketplace attracts more customers

Pop-up retail businesses are now worth GBP2.3bn to Britain’s economy, according to a new report commissioned by digital communications company EE and carried out by the Centre for Economics and Business Research (Cebr), which showed that the sector achieved 12.3% more revenue this year compared to 8.4% in 2014.

This is the second annual report into the pop-up sector from independent consultancy Cebr, which conducted a business survey of 342 middle managers and above in retail/ restaurants services and hotel/ lodging industry in all business sizes, along with a consumer survey of 2010 British adults. The online survey was undertaken between 17 and 20 July 2015.

The annual Britain’s Pop-Up Retail Economy report indicates that this sector is growing much faster than predicted, with the number of customers increasing and spending more.  The survey found that 44% of respondents visited a pop-up in the past year and spend an average of GBP8 more per month. Pop-ups are now said to account for 0.76% of total UK retail turnover, up from 0.6% the year before. This represents an increase of more than GBP200m in sales.

There are now an estimated 10,000 pop-up retail businesses in the UK and the sector employs over 26,000 people. Traditional retailers are using pop-ups to test and expand into new locations and product lines. The report found that 8% opened a pop-up at some point in the past year, while 10% plan to open one in the next five years.

However, the report also showed that the pop-up sector is being held back by technology because internet connection remains one of the biggest challenges and is crucial for point-of-sale (POS) devices and stock management tools. More than 40% of small retailers are still unable to take card payments and 25% say sales have been lost as a result of insufficient stock management systems.  

EE is addressing this problem with the launch of new Connected Retail bundles, which includes 4G tablets, the Shopwave point of sale (POS) app, contactless iZettle payment devices. All the bundles are on flexible contracts that reportedly cost much less compared to traditional POS solutions. 

Winners of a competition called Space for Ideas, held by retail space marketplace Appear Here, will be the first UK businesses to use EE Connected Retail. Appear Here’s Space for Ideas launch two week residencies in shops across London this week. The winners of the competition include Porterlight, a bespoke cargo bike builder; WonderLuk, a 3D printed jewellery brand; Run&Fell , an ethical clothing brand; and The Mini Edit, a children’s online clothing brand. Each business will be given prime retail space in London for two weeks, along with Connected Retail from EE, advertising from the London Evening Standard and funds and design agency support to build their shops.

Managing economist for Cebr, Rob Harbron, commented: “Pop-up retail is continuing to become an increasingly viable platform for both people with new business ideas and for established businesses looking to engage with customers in new and innovative ways. Successful retailers increasingly need to offer customers the ability to shop when and where they want. As such, the flexibility of pop-up stores makes the format increasingly attractive. However, without appropriate investment in technology, efficiently co-ordinating a range of platforms is becoming increasingly challenging for businesses.”

Founder and CEO of Appear Here, Ross Bailey, added: “This report highlights how important the pop-up sector is becoming to the UK economy. With so many traditional retailers using pop-up shops and so many pop-up retailers moving onto long-term rents, we should no longer be looking to draw a line between traditional retail and pop-up retail – it is all just retail. We’re seeing brands and retailers from all backgrounds incorporate pop-up retail into their retail strategy. Since launching in 2013, Appear Here has grown by 500% year on year and currently generates GBP14m in request value per month, a number which is increasing month on month. This is a testament to the growth of the industry.”

Honda Aircraft gets orders for HondaJet

The HondaJet has made its first public appearance in South America as part of LABACE 2015, Latin America´s largest business aviation show in Sao Paulo.

“We are extremely pleased with the early response to the HondaJet by customers in South America,” said Honda Aircraft company President and CEO Michimasa Fujino. “In addition to receiving multiple orders, many more individuals at LABACE have expressed interest in the HondaJet, saying they are impressed with its class-leading performance, comfort, fuel efficiency and overall fit and finish.”

Honda Aircraft company recently expanded sales of the world´s most advanced light jet to South America and appointed Líder Aviação as the exclusive dealer to provide sales, service and support for the HondaJet in Brazil. Based in Belo Horizonte, Líder operates more than 23 fixed base operations (FBOs) throughout Brazil.

The HondaJet is the world´s most advanced light jet, with best-in-class advantages in performance, comfort, quality and efficiency. The HondaJet is the fastest, highest-flying, quietest, and most fuel-efficient jet in its class.

Honda Aircraft is a wholly owned subsidiary of American Honda Motor Co., Inc. Founded in 2006, Honda Aircraft has its heritage in more than 20 years of groundbreaking aeronautical research and development.

Lockheed Martin to upgrade Apache helicopter targeting, pilotage system

Lockheed Martin (NYSE: LMT) said it has been awarded a US Army USD21.7 million Lot 4 follow-on contract to continue production of the Modernized Day Sensor Assembly (M-DSA) for the AH-64E Apache attack helicopter.

This first phase of upgrades to modernize the Apache´s Day Sensor Assembly includes producing Modernized Laser Rangefinder Designator (M-LRFD) kits. M-LRFD is the principal targeting aid for the Apache, enabling pilots to designate targets and establish target range for accurate weapon engagement. M-DSA is an upgrade to the Apache´s targeting and pilotage system, or Modernized Target Acquisition Designation Sight/Pilot Night Vision Sensor (M-TADS/PNVS).

A total of USD21.7 million was obligated to Lockheed Martin through this Lot 4 contract award; the total value is not-to-exceed USD50.9 million. Lockheed Martin is on contract to produce and deliver 786 M-LRFD kits for the US Army and international customers. More than 200 kits have been delivered to the US Army to date.

Headquartered in Bethesda, Maryland, Lockheed Martin is a global security and aerospace company that employs approximately 112,000 people worldwide and is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. The corporation´s net sales for 2014 were USD45.6 billion.

Remortgaging activity jumps 22% in June

Mortgage lending in the UK was 22% higher in June, with remortgage activity rising by over a third month-on-month and year-on-year, the Council of Mortgage Lenders (CML) revealed on Tuesday.

The rise in remortgage activity among home-owners is said to reflect the possibility that rates will increase, so borrowers are looking for competitively-priced mortgage deals ahead of higher mortgage rates.

There was also a significant month-on-month increase in first-time buyer activity compared to May this year, however this activity saw little change when compared to June 2014.

Lending to home movers also substantially increased in June, with CML’s figures showing monthly increases and slight yearly increases in volume and value. Home-owner remortgage activity rose by over a third month-on-month and year-on-year.

Buy-to-let activity also continues to grow year-on-year and month-on-month, mainly as a result of by buy-to-let remortgage activity.

During the second quarter 2015, home-owner remortgage activity was higher in volume and value compared to the first quarter of the year and the second quarter of 2014. First-time buyers also increased in number and amount, advancing by over 20%, but lending declined year-on-year compared to the same quarter in 2014, while home mover lending figures showed a quarter-on-quarter increase but year-on-year decline. 

Director general of the CML, Paul Smee, said: “Notable this month is the uptick in remortgage activity among home-owners, perhaps reflecting an increased desire to lock into competitively-priced mortgage deals in advance of any rise in rates. It is likely that people are now beginning to feel a rate rise is a realistic prospect, and not just a distant theoretical possibility.

“After a slower than expected start to the year, lending now appears to be picking up as we expected, and in line with our recently revised forecasts.”

CML is the main trade body representing UK mortgage lenders. Data for its latest Mortgage Survey was sourced from CML’s membership, which includes banks, building societies and other lenders who together undertake around 95% of all residential mortgage lending in the UK.

According to CML, there are 11.1 million mortgages in the UK, with loans worth over £1.3trn.

UK’s trade deficit widens in June

Britain’s deficit on trade in goods and services increased to £1.6bn during June 2015, up from £900m in May 2015, according to the UK’s Office for National statistics (ONS) latest statistical bulletin: UK Trade, June 2015 released on Friday.

The ONS UK Trade bulletin is designed to illustrate the extent of import and export activity and is a key contributor to the overall economic growth of the UK.

According to ONS, the trade position reflects the difference between exports and imports. UK exports declined by £200m to £43.2bn between May 2015 and June this year, while imports increased by £500m to £44.8bn.

Trade in goods deficit was recorded as £9.2bn in June 2015, an increase of £800m from the previous month. Exports fell by £300m between May 2015 and June 2015, but over the same period imports rose by £500m.

Exports of goods from the UK fell by £300m to £24.9bn in June 2015. This decline was said to mainly reflect a £500m drop in exports of unspecified goods following a high export value in the previous month. There was also a decrease in fuel exports during June 2015, a fall of £400m from the month before. ONS said £300m of this decrease was due to oil. However, a £500m rise in chemicals, specifically organic chemicals, partially offset the overall decrease in exports of goods.

Imports of goods to the UK increased by £500m to £34.1bn in June 2015, with £200m of this increase were attributed to fuels (specifically oil). There was also a cumulative rise in imports of most other commodities.

During June, imports from the EU rose by £600m. This rise was primarily reflected further imports of material manufactures, machinery and transport equipment, as well as food and live animals. The increase in imports from the EU has resulted in a record trade deficit with the EU of £7.6bn for June 2015.

In the quarter from 2 April to June 2015, the UK’s total trade deficit was the smallest since quarter 2 April to June 2011, contracting by £2.7bn to GBP4.8bn. Quarterly figures for exports were recorded as increasing £2.9bn, while imports rose by £200m.

For the three months to June 2015, deficit in trade in goods narrowed by £3bn to £27.4bn, which reflects a quarterly rise of £3.1bn in exports and a £100m increase in imports. These higher export figures reflect a £1.3bn increase in exports of chemicals and a £1bn rise in exports of fuels. Machinery and transport equipment exports were less significant compared to chemicals and fuels, at over the quarter and increasing by £600m. Although these sectors accounted for £1.2bn of the overall narrowing of the goods deficit, as respective imports dropped by £600m.

ONS also reported that during the quarter April to June 2015, the surplus in UK trade in services narrowed by £300m to £22.6bn. It recorded a decrease of £100m in exports and a £200m increase in imports over the quarter.

UK businesses face cash flow difficulties because of late payers

Cash flow problems experienced by UK businesses are primarily caused by late payments, Lloyds Bank revealed on Wednesday.

The British retail bank’s twice-yearly Business in Britain report is conducted by Lloyds Bank Commercial Banking, which canvasses the opinions of 1,500 UK companies that are primarily small and medium-sized businesses. The survey is now in its 23rd year.

Lloyds latest Business in Britain report shows that one in five businesses are experiencing cashflow problems and the situation is expected to worsen in the next six months.

Despite overall business confidence remaining strong at 43%, Lloyds found that nearly one in three businesses, or 31%, expect more customers to require deferred payment terms over the next six months, increased from 27% six months ago.

Although many businesses are said to be considering investing in growth, 18% admit to having cash flow problems, with 59% of those businesses citing late payers as being the main reason.

Only 7% respondents to the Lloyds Business in Britain survey are expecting cashflow difficulties to decline during the second half of 2015.

Donald Kerr, managing director at Lloyds Bank Global Transaction Banking, a provider of alternative sources of financing for customers including asset based lending and trade finance, commented: “While the number of businesses suffering cashflow problems has fallen from a peak of 35% in 2013, it remains stubbornly high.

“Cashflow is the lifeblood of any business but for too many businesses, late payments continue to be a significant problem. Where businesses do expect cashflow to be an issue, they need to take action to manage issues like late payment so that it doesn’t hamper their opportunities to grow.

Kerr added that: “Specialist types of lending such as invoice finance can alleviate these pressures by allowing businesses to borrow against the value of their invoices helping them to avoid payment delays and improve cashflow.

“Thorough credit checks on customers and setting out clear payment terms at the outset of any relationship will also help.”

According to Lloyds, cashflow problems are more likely to be experienced by businesses in Gloucestershire and Oxfordshire (23%) while businesses in the South West of England are least likely (8%).

The report also found that 37% of businesses said a fall in demand for products and services also resulted in cashflow difficulties, while 31% said customer default resulted in cashflow problems.

Lloyds added that 1500 firms responded to its latest Business in Britain report in April 2015. The data was collated by research consultancy BDRC Continental, which found 65% of the responses came from businesses with an annual turnover below £10m; 10% of responses were from businesses with an annual turnover between £10m and under £15m; and 25% of the responses came from businesses with an annual turnover of over £15m.

UK Government sells off RBS shares for £2.1 billion

The UK government has commenced the sale of its shares in majority state-owned retail bank, the Royal Bank of Scotland (RBS), which was bailed out by the government during the financial crisis in 2008.

HM Treasury and the Chancellor of the Exchequer George Osborne revealed on Tuesday that 5.4% of the government’s stake in RBS has been sold at £3.30 per share, raising £2.1bn that will be used to pay down the national debt.

RBS shares were purchased by the UK government for £45bn in 2008 and 2009. The bank was also supplied with cheap funds.

UK Financial Investments advised the Chancellor on Monday that it would be appropriate to begin the first sale of the government’s shareholding in RBS. Osborne agreed to the share sale, marking the first step in returning RBS to the private sector.

Osborne said: “This is an important first step in returning the bank to private ownership, which is the right thing to do for the taxpayer and for British businesses: it will promote financial stability, lead to a more competitive banking sector, and support the interests of the wider economy.”

CEO of RBS Ross McEwan also stated: “I’m pleased the government has started to sell down its stake. It’s an important moment and reflects the progress we are making to become a stronger, simpler and fairer bank. There is more work to be done but we’re determined to build a bank the country can be proud of.”

According to RBS, its capital position has improved dramatically since 2008. Its loan:deposit ratio is much more sustainable than it was during the crisis and is now at 92% , compared to 154%. The bank’s share price has also appreciated by 330% since its lowest point in January 2009.

However, the share sale is below the price paid by the government and represents a loss to the UK taxpayer of about £1.07bn.