Alsion Platt CEO of Country Wide PLC [CW] has announced she is to join the British multinational grocery and general merchandise retailer Tesco board ,as a non executive director , coined by many as a part timer ,no zero contract hours ?
CW ended thurdays trading 8.3% down at 363.4. This was the equivalent of a 2.23 per cent drop on the day.
Anyway last year saw turmoil and upheaval at CW ,with senior management departures and even the chair man who broke UK corporate governance code, go walk about.
Alsion Platt , after leaving school worked for BA in the 80's ,by the nineties ,worked her way up to management .
This was at a time when the most bitter and protracted libel actions in aviation history was going on , with a resulting and humiliating climb-down by BA.Virgin Atlantic disruptive, lower fare ,airline carrier boss Richard Branson had survived an incredible dirty tricks campaign by British Airways higher fare traditional airline carrier.
[Not insinuating Mrs Platt was involved at all in the above wording].
Today ,there is twice as much flying going on as there was 20 years ago within Europe and all of that growth is accounted for by the low-cost airlines," says Simon Calder, travel editor of the Independent newspaper.
"Wherever you are, your life has probably been improved by a low-cost airline."easy jet another company who followed in Bransons footsteps ,recently launching online sales and lettings estate agency easyproperty.com.
Though it brings me full circle, to what Richard Branson one of the most respected global business entrepreneurs, recently said about emerging innovative technology taking over outdated high street retail ,estate agency, business models parse. [outdated ]With the CW business model and with February trading results looming,is this just another PR stunt to fend of the wrath of investors and stake holders and ultimately dismissal of a under performing CEO, who has been at the helm for almost a year and a half ?
OK back to the story , so what may this suggest my point being, that Tesco and Countrywide may be looking at a joint venture , OK sounds new not really well lets go back to the start ...
Tesco launched a home selling service in July 2007 called Tesco Property Market, which allowed sellers to 'by-pass' estate agents. SOUNDS FAMILIAR ?
"embryonic online business" Tesco Property Market 9 years ago. in 2007 ,3 main portals existed findaproperty.com propertyfinder.com [ both acquired by zoopla ] and rightmove which had just had its IPO.
Property sellers using the service could sell their homes for £199. The website was launched with over 300,000 properties for sale, thanks to its partnership with online property portals.
Sellers signing up to use the Tesco Property Market service were provided with a ‘for sale’ board, however they did have to provide their own room measurements, write their sales particulars and conduct viewings.
Shortly after launching, Tesco Property Market was closed. It was deemed that Tesco were acting as an estate agent and therefore needed to comply with the Property Misdescriptions Act (1991) and would need to join the Ombudsman for Estate Agents scheme, which resulted in Tesco closing the venture.
Spicer Haart high street estate agent purchased the business from Tesco, subsequently revising the business model and re-launching it as iSold in March 2010.
The Properties were then marketed for £999 under the control of the high street agent now costing £800 more or almost 3 x more than when previously sold with supermarket change Tesco.
Unlike the original Tesco Property Market, iSold does advertise their homes for sale on Rightmove and most other major property portals;reminds me of the irony of one portal rule by obscure property website.
2012 Tesco was embroiled in a bitter court battle with the high street estate agents SpicerHaart in which the two companies were trading accusations over their thwarted ambitions to create an online home-selling portal to rival Rightmove using Tesco's marketing muscle.
Spicerhaart acquired an "embryonic online business" Tesco Property Market (TPM) after the supermarket group's ambitions to break into home-selling were blown off course by a ruling from the Office of Fair Trading (OFT) in 2008.
Commenting at the time about isold startup ,high street estate agent Spicer Haart owner Paul Smith.
"Every so often something new happens in the world of estate agency that sets the jungle drums beating. In our case, it is the launch of iSold.com, our new estate agency, in association with Tesco.
The consumer media have rightly understood that there needs to be far greater choice for sellers in how their property is marketed in this internet-savvy age, a point underpinned by the recent OFT report into estate agency."
Research, conducted by movewithus in 2010, questioned over 200 leading estate agents across the UK and revealed the following results:
What impact will Tesco’s iSold have if rolled out nationally?
21 per cent thought it would reduce number of agent by up to 25 per cent, (one per cent said over 25 per cent), 45 per cent said it would reduce fees, 33 per cent believed there would be no impact.
Under the terms of the sale in 2010, Tesco agreed not to seek repayment of millions of pounds invested in the venture for a period. Spicerhaart claimed, Tesco allegedly promised to continue to offer marketing support for the business, rebranded as iSold.
Tesco insisted that it provided some marketing support, including a link on its homepage and data access on about 16 million users of its Clubcard loyalty scheme.
The supermarket group claimed Spicerhaart – part of Haart, Felicity J Lord and Spicer McColl chains and controlled by Essex-based businessman Paul Smith – failed to keep its promise of a nationwide service, only allegedly offering iSold in six city areas.
2012 accounts for Indigo Ltd – as Spicerhaart renamed the former TPM – referred to a £3.37m loan from Tesco, which fell due earlier, in the same year. "Legal action was taken to challenge this liability, which was also the subject of a guarantee from Spicerhaart Group,"
Tesco in filed a claim with the high court for repayment of this overdue loan.
Spicerhaart lodged a counter claim for a larger sum.
2014 October "a settlement was reached" between the high street agent and supermarket chain though who payed who is up for contention.
“Legal agreements preclude us from making any comment at this stage.”Spicer Haart...
So much for non transparency, unlike online estate agents who to their credit , have transparency and might I add, whose fees are still cheaper than isold 2010 fee structure, under high street agent Spicer Haart.
.In May 2015 Tesco shareholders sought to seek compensation from the supermarket giant claiming it 'committed serious violations' by overstating its profits.
The rise of the discounters which to the disdain of many shoppers who regard the supermarkets on eqaul footing with the big four .Last year saw Aldi and Lidl hold 10% market share as Big Four continued to slip
"If you look back as recently as 2012, Aldi and Lidl only held a 5% share of the market, and it had previously taken them nine years to double their combined share from 2.5%," said Fraser McKevitt, head of retail and consumer insight at Kantar.
"In the last 4 months the two retailers have attracted another additional million shoppers compared with 2014 . The discounters show no sign of stopping and with plans to open hundreds of stores between them, they'll noticeably widen their reach to the British population."
According to Kantar, Aldi and Lidl have both added around one million shoppers to their stores, but spending has also gone up.
It is supermarkets such Morrisons and Asda, on the lower-price end of the grocery market, that are suffering from the influence of their cheaper counterparts. With Morrisons selling its chain of 140 its convenience stores, it is also missing out on a great opportunity in the food market.
However, Morrisons was too late with the small city stores to profit significantly from its Morrisons Locals. Rumours are now going around that Aldi and Lidl, too, are keen on entering the convenience store game, but it remains a question whether their business model would work with high rents and a limited assortment.
Like the discounters it brings me full circle also to the unstoppable rise of the online estate agents. And like Morrison's who missed the boat, has countryside life jacket just deflated yet again...
It's not quite money down the back of the sofa, but the chief executive of Tesco has been hunting for bits of the business he can sell ever since arriving at the beleaguered supermarket last year.
He needed to get rid of assets to fend off speculation that the supermarket's debt - which was standing at more than £20bn - was becoming a problem. The South Korean sale goes some way to alleviating the business's balance-sheet strain.
Speculation was growing that without significant sell-offs, Tesco might need to raise fresh capital from shareholders - never a happy prospect.
And with much of its debt needing to be paid off or refinanced over the next five years, down-payments now were increasingly necessary to spark an improvement in the supermarket's credit rating.
That is important for Tesco's financial health, as a better credit rating means that it can borrow money more cheaply and pay less to insure itself against the possibility of default.
At present, two of the most important credit rating agencies, Standard and Poor's and Moody's, have Tesco at the lowest rating - "junk".
Dave Lewis, Tesco chief executive, argues that the £4bn proceeds of the Homeplus sale will improve the supermarket's debt profile - it is all being used to pay off what the business owes.
And the less money it owes - and the cheaper it can borrow - the more money Tesco can spend improving its UK operation and attracting in new customers.
Homeplus was a healthy business, with annual profits between £300 and £400m.
Another healthy business that Tesco owns is its data division, Dunnhumby, which is also up for sale.
But fears there over falling profits have cut its possible value to below £1bn.
Tesco's debt now stands at £17bn, including pension liabilities. So Mr Lewis still has some way to go.
Of course, selling businesses does not alone solve the problem of how to get more customers through the doors.
Mr Lewis will have to prove to his shareholders that by making Tesco an even more UK-focused business - three-quarters of the supermarket's revenue will now come from Britain - he can still drive significant growth.
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