Europe Up On Cadbury

LONDON -- European equities traded higher on Labor Day as U.S. food giant Kraft revealed details of a $16.7 billion bid for Cadbury, which the British chocolate maker firmly rejected.The maker of the iconic Cadbury chocolate and Trident chewing gum said the offer undervalues its business. Cadbury ( CBY - news - people ) shares soared above Kraft ( KFT - news - people )'s offer price as the market is expecting either a raised bid or a counter offer from Nestle or other rivals. (See "Kraft Courts Cadbury.") The potential acquisition gave a boost to European leading shares. Europe's 50 leading shares, as measured by the Dow Jones Eurostoxx index, were up by 1.2% in afternoon trading on Monday, with London's FTSE up 1.8%, France's Cac-40 1.7% higher and Germany's Dax up 1.6%. In the U.S. markets are closed for Labor Day. Shares of Associated British Foods ( ...
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Primark Goes Continental

LONDON -- Have a look inside. Cheap-and-chic Primark is coming to new European cities with the next store opening in Belgium as it looks to cash in on shoppers trading down during the economic slump.On Thursday Primark, owned by Associated British Foods, posted a 21% increase in third-quarter sales, following an 18% rise in first-half sales, putting the increase at 20% for the 40 weeks to June 20.With 190 stores in Britain, Ireland, Spain, Portugal, Germany and the Netherlands, Primark has an ambitious plan to gain even more market share. "We are looking at other countries," said AB Foods finance director John Bason. Though Bason wouldn't detail which new countries the business was looking towards, he did say Primark was carrying tests in markets like Germany, where the discount sector is well developed, to assess its success and then roll out the stores "very quickly".On Spain, Bason said: "I wouldn't be surprised if we have 20 stores there by this time next year." Guy Young, Primark's director of international trading, quit after less than a year as AB Foods is looking to expand in Europe. Bason said his resignation will not impact the company's plans. "It would be inappropriate for me to talk about his personal circumstances for leaving. But we will be announcing a new person very soon. His departure does not indicate any change in our strategic intent."Bason said the recession has had a positive impact on Primark sales but the business is also benefiting from long-term shifts in consumer trends. "The momentum of the business is clear. Primark has accelerated during the recession but the growth we are experiencing today is not dependent of the consumer downturn but of consumers changing their habits over the long-term."Allegations that Primark's suppliers "exploit" workers in countries like Bangladesh have undermined the retailer's reputation. But Bason said the company ...
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Another Man Disembarks From Easyjet

Is the long-running boardroom dispute between Easyjet's founder, Stelios Haji-Ioannou, and the airline's management, under chief executive Andy Harrison, crushing morale at the top? On Friday, a month after Easyjet chairman Colin Chandler stepped down, the airline announced its finance director had jumped ship as well.It was not clear whether there was a connection between the two exits, as Chandler had been due to retire anyway, but the departure of finance director Jeff Carr seemed to come out of the blue for some industry watchers. Easyjet said it would "immediately" start looking for someone to replace Carr, who was poached by transport operator FirstGroup ( FGP - news - people ).Carr had enjoyed a good four-year run with Easyjet ( EJETF - news - people ), and has worked at both Associated British Foods ( ASBFY - news - ...
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Primark Under Pressure

Investors usually snub news about companies exploiting workers as they focus on profit. But allegations that cheap-and-chic British retailer Primark's supplier employs illegal immigrants in the U.K. could potentially bang into the share price. Reports published in the Observer and News of the World claimed TNS Knitwear, a Manchester-based supplier of the budget clothing retailer, has been breaching U.K. employment, tax and immigration laws.The Ethical Trade Initiative, the trade body that monitors British retailers, said it was launching an investigation to look into claims that TNS hired immigrants of Pakistani, Indian and Afghan origin and pays them 3.00 pounds ($4.45), as oppose to the minimum legal requirement of 5.73 pounds ($8.50) per hour. Primark said it was launching its own investigation. "Once that investigation is complete it will decide how to proceed," the company said. Although the news didn't have an immediate effect on the stock price, analysts believe reports of unethical allegations into companies could have a secondary effect in the stock valuation. "There are some funds or investors that won't invest in unethical companies," said Stephen Taylor, an analyst with Dolmen Securities in Ireland. "If allegations are true, those funds could sell their positions in those companies.""Consumers could also switch to a different brand. But at the moment there are bigger concerns of the general economy rather than anything else," said Taylor. Shoppers at Manchester's flagship Primark store expressed their concerns of potentially unethical practices. "Things like this are disgusting. How are these people allowed to get away with it?," Margaret Smith, 44, told the Manchester Evening News. But there were not immediate signs of customers switching to another retailer over the allegations. "Consumers don’t care about it as long as they pay cheap price on their clothes and this has no impact on the trading of t...
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British Retailers Under Fire

Its custumers might go crazy as they try to scoop the best bargains, but cheap-and-chic British retailer Primark, along with two rivals, came under fire Friday after it was revealed the company is forcing workers in Bangladesh to work for as little as 7 pence (10 cents) an hour, up to 80 hours a week.Based on interviews with 115 workers, the charity War on Want claimed Primark "is ignoring rising basic living costs as employees making garments in the Bangladeshi capital Dhaka are now worse off than two years ago, when the charity first exposed their hardship.""Primark, Asda and Tesco promise a living wage for their garment makers," said Ruth Tanner, campaigns and policy director at War on Want. "But workers are actually worse off than when we exposed their exploitation two years ago. The U.K. government must bring in effective regulation to stop British companies profiting from abuse." War on Want also claimed workers need 44.82 pounds ($65.27) a month to give their family food, water, shelter, clothes, education, health care and transport. But their average pay was 19.16 pounds ($27.90) a month.An unnamed employee said: “My pay is so meager that I cannot afford to keep my child with me. I have sent my five-month old baby to the village to be cared for by my mother.”The publicity was awful, but the effects on the retailers' bottom lines is less clear. "On the margin it has some secondary effects that could affect investment in the companies," a trader said on condition of anonymity. "Investors' economic perspective is not that of ethical responsibility of corporations when it comes to sourcing, but similar allegations may affect the valuation of a company in the long term."Similarly: "I don’t think investors' sentiment will be affected only because a company treats people badly in Bangladesh," said Nicolas Ceron, an analyst with Numis Securities in London. Primark said it was commited to ethical sourcing of its clothes and...
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