Brexit, Wimbledon, ASOS, Arcadia Group, EasyJet, Airbnb: your commercial news round-up

Following Prime Minister Boris Johnson’s admittance into hospital, in a government briefing earlier this week Foreign Secretary Dominic Raab claimed it is too early to consider how the UK will exit the current coronavirus lockdown. As the UK heads into the Easter bank holiday weekend and nears the end of its third week in lockdown, here are the top news stories from the business and legal world.

• With the recent outbreak disrupting almost everything, including talks between the UK and EU, the UK government has confirmed that is “absolutely committed” to Brexit negotiations and the December 2020 transition date. If a free-trade agreement deal is not reached by the end of this year, Britain will be subject to World Trade Organisation terms.

• In a bid to support struggling charities through the pandemic Chancellor Rishi Sunak has announced a £750 million package. Oxfam and Age UK are among the struggling charities and have furloughed two-thirds of staff, with others facing difficulties due to enforced shop closures. The measures announced by Sunak include cash grants direct to charities that are providing key services throughout the crisis.

• In a controversial move last seen during the 2008 financial crisis, the government is to borrow billions of pounds from the Bank of England’s ‘ways and means’ fund to deal with the coronavirus pandemic. The Treasury and Bank said any use of the facility would be "temporary and short-term".

• Following the recent cancellation of Wimbledon this year – the first time since the second world war – it has been revealed that the All England Club will receive around £114 million from its insurers. After the SARS outbreak in 2002, the club updated its insurance policy to include the infectious disease clause. The outgoing chief executive of Wimbledon Robert Lewis said: “We’re fortunate to have the insurance and it helps”. He added: “The insurers, the brokers and everybody involved have been excellent to work with so far, but there’s still a lot of work to do.”

In other insurance news, Aviva, RSA, Direct Line and Hiscox have delayed dividend payments to shareholders during the pandemic – a “prudent decision” which has been welcomed by the Prudential Regulation Authority (PRA). The PRA said: "Insurers should pay close attention to the need to protect policyholders and maintain safety and soundness.

"Decisions regarding capital or significant risk management issues need to be informed by a range of scenarios, including very severe ones." The insurers implementing this decision have said that they remain in a strong capital position. "The Board has taken this decision in the wake of the unprecedented challenges COVID-19 presents for businesses, households and customers, and the adverse and highly uncertain impact on the global economy", said Aviva.

• Shares in both ASOS and Cineworld have soared in recent days. The online fashion retailer’s shares rose by a third on Tuesday 7 April after it announced a large share sale in an attempt to protect its finances amid the coronavirus crisis. Following a fall in profit last year, ASOS also faced a 25% drop in sales in the last three weeks of trading due to a downturn in demand but has confirmed that it is implementing measures to reduce capital expenditure and discretionary spending, as well as making use of government support.

Cineworld experienced a 40% increase in shares at the beginning of the week, after it revealed its plans to get through the outbreak. The cinema chain’s 787 cinemas across 10 countries have all closed due to coronavirus. AJ Bell investment director Russ Mould said: “Cineworld’s battle for survival involves bosses forgoing pay, capital expenditure being frozen and urgent discussions with lenders, landlords, film studios and suppliers. Coming out the other side will not be easy.”

• Following the enforced closure of non-food shops it has been revealed that family-owned footwear retailer Clarks is planning to permanently close “a small number” of its 347 UK stores. There are reports that Clarks has appointed investment bank Rothschild to help explore its financial options going forward. In other high street news, Arcadia Group – the owner of high street clothing retailers, including Dorothy Perkins and Topshop – has reached out to banks and hedge funds about borrowing £50 million against its distribution centre in Daventry, Northamptonshire. With 550 of its shops shut, Arcadia would use the funding to support its shops through the crisis.

• According to the Guardian, as well as EasyJet securing a £600 million loan from the Treasury and Bank of England’s coronavirus fund, the airline has also said it would borrow an additional £407 million from commercial creditors to ensure its liquidity. The Treasury has been unwilling to support the aviation sector and its call for special government measures to keep it afloat during the crisis until wealthy shareholders contribute.

• The government has also received a request for financial support from the trade association representing ferry companies transporting goods in and out of the UK. The UK Chamber of Shipping released a warning that supplies of food, medical equipment and other imported goods could be at risk if businesses severely cut back services. A number of ferry companies, including Brittany Ferries, have reduced their services. After the government intervened to support other aspects of the transport industry, including buses and trains, the ferry industry argued that it also requires financial support: "What we're asking for is not a wholesale bailout, it's for the government to share and underwrite some of the risk and the costs to allow the ferry companies to continue providing that vital, lifeline service to the country" said UK Chamber of Shipping Chief Executive Bob Sanguinetti.

• Knight Frank’s recent reassessment of the property market has found that house sales in the UK will collapse this year; however, despite the property market’s deep freeze, the major forecaster said house prices will fall by only 3% and are set to rebound in 2021. The reassessment also forecasts that UK house sales will plunge from 1,175,000 (2019) to just 734,000 in 2020.

• On Monday Airbnb revealed its plans to provide a $250 million payout to hosts who lost money as a result of guests cancelling trips due to coronavirus. The payments will cover 25% of what the hosts would normally receive via its cancellation policy and applies only to cancellations with a check-in date between March 14 and May 31.

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