Companies in the news ... and how they were assessed
Bt/openreach: together forever?
BT shares jumped last week on news that the company had struck a groundbreaking deal to retain ownership of its broadband arm, Openreach, after two years of tense negotiations with the telecoms regulator Ofcom. Call it a case of “conscious uncoupling”, said Lex in the FT. Under the deal hammered out with Ofcom’s Sharon White, BT gets to hang on to Openreach – its “biggest earner”, which owns most of the UK’S broadband infrastructure – but it will be split off into a separate legal entity, with its own board. So “BT and Openreach will not divorce, but will spend more time apart”. The governance changes are “cosmetic”. Openreach’s new chief executive will answer only to the spinoff’s chairman, but “BT’S chief has a veto on who is appointed”. Even so, rivals such as Sky, Vodafone and Talktalk, which have previously slammed BT’S “monopoly” over broadband access, welcomed the separation. The deal should ginger up the industry, said Alex Brummer in the Daily Mail. In the past, BT’S competitors have tended to blame BT for providing cheaper cabling. Now that they can strike co-investment deals with Openreach, they will be under pressure to provide their own faster fibre optics. If service is unreliable, “the refrain ‘it ain’t our responsibility, guv’, will no longer be acceptable”.
Sports Direct: worker on board!
Sports Direct boss Mike Ashley isn’t renowned for his progressive workplace policies, said Oliver Gill in City AM: a 2015 investigation revealed “draconian conditions” at the retailer’s mammoth Shirebrook site. But the company appears to be turning over a new leaf: it has kicked off the process of electing “the UK’S first board worker representative”. According to the rules, all “directly engaged workers” can put their names in the hat for the “high-profile role”; Sports Direct will then conduct an extensive “assessment” process, before putting a selection of candidates from Sports Direct’s 23,000 staff forward for a vote. Ashley says that he looks forward, “with immense pride”, to sitting alongside the chosen rep, but unions have slammed the move as a “PR exercise”, said The Guardian. The Institute of Directors was also less than effusive, claiming “it will do little if anything to resolve the corporate governance problems” at Sports Direct. As if to ram home the point, Amazon this week severed ties with Transline – one of the employment agencies “at the centre of the Sports Direct scandal” (while declining to reveal its reasons). The agency is still supplying warehouse staff to Ashley and co.
Ivanka Trump Fine Jewelry: heading downmarket
Since her father’s election, Ivanka Trump’s clothing, shoes and handbag lines have “cycled through highs and lows”, said Vanity Fair. Now comes the first big rejig. The company is poised to ditch its fine jewellery line to focus instead on “more affordable fashion jewellery”. Research has found that “the true Ivanka customer” is 25-40 years old, and makes between $60,000 and $100,000 annually – not a demographic likely to shell out $10,000 for a gold necklace with rainbow moonstones and diamonds. Trump’s products have become “targets for both supporters and detractors of her father” this year, with retailers including Nordstrom and Marshalls pulling back from promoting her brand, said The New York Times. Even so, overall sales jumped 21% last year, and the company claims that February saw some of the “best performing weeks” in its history.