Business Information Service: Last Week

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The Independent Online
THE narrow French 'yes' to the Maastricht treaty was not enough to convince currency traders, who put the franc under pressure for most of the week.

The belief that the UK Government would stay outside the ERM raised hopes on Monday that interest rates would be cut, while sterling continued to fall against the dollar and the major European currencies.

Sears, the retail group, was reported to have sold its loss-making menswear chain to a management buyout team backed by Hambro European Ventures for a nominal price of pounds 1. Sears believed it was easier and cheaper to sell the chain, which includes Fosters, in that way than to close the business down. The chain made a pounds 5.3m loss in the three months to May.

Reports that TVS Entertainment was to be bought out by a US TV company headed by the evangelist, the Rev Robert Paterson, were confirmed over the weekend. The deal is expected to be worth almost pounds 40m to TVS.

On Tuesday, the Treasury announced a one-point cut in base rates to 9 per cent to try to stimulate the economy, amid warnings that the reduction could put the Government's low-inflation policy at risk.

The Leeds Permanent and Northern Rock building societies responded immediately with cuts of 0.75 per cent and 0.76 per cent in their mortgage rates. Other building societies including the country's largest lender, the Halifax, meanwhile adopted the wait-and-see stance.

The effect of sterling's fall in the currency markets was expected to widen the UK trade deficit, the imbalance between exports and imports, over the next few months. Official figures for August showed a 1 per cent rise in the deficit to pounds 10bn.

The fashion retailer, Next, which almost became a 'bust' victim at the end of the 1980s boom through over-expansion, came back strongly with a surprise boost in pre-tax profits from pounds 200,000 to pounds 8.3m.

Laura Ashley, which made losses for three years running, was the other high street retailer to report a turnaround. On Wednesday, it reported a sharp rise in its pre-tax profits from pounds 500,000 to pounds 1.7m for the six months to July.

Alan Sugar, the founder and head of Amstrad, the consumer electronics group, was said to be planning to withdraw from trading on the Stock Exchange as a public company. He was reported to have offered to buy back shares in order to return the company to the private sector.

British Aerospace announced 3,000 redundancies to try to restrain losses from its regional aircraft division. The cuts came after the company revealed taxable losses of pounds 129m for the first six months of the year, against an pounds 86m profit last time.

More job losses were were announced on Thursday by Ford and Rolls-Royce. Ford is to lose 1,500 and Rolls-Royce 950. They blamed the losses on the depressed car sales.

George Walker, the former boxer and chairman of Brent Walker, escaped bankruptcy after creditors owed pounds 180m voted to accept a voluntary arrangement he had offered.

Meanwhile, the former Blue Arrow chairman and chief executive, Tony Berry, faced a 15-year ban from the boardroom after the DTI decided to apply for a court order to disqualify him as a director.

Friday brought news that Sir Terence Conran, the clothes designer, was to take a 25 per cent stake in Fitch, the design company, to prevent it from going into receivership.

HTV Group, the independent television broadcaster, was forced to take drastic cost-cutting measures after revealing a pounds 5m loss for the half year to June. It hopes to reduce overheads by pounds 10m over the next year.