Coronavirus vaccine, oil, Netflix, high street, insurance, Metro Bank, Monzo, Nou Camp: your commercial news round-up

Last week saw Prime Minister Boris Johnson extend the UK’s lockdown by three weeks. This week’s commercial news round-up summarises several important developments in the business and legal worlds that we think you should know about.

• Following £20 million in government funding, the first trials of a potential coronavirus vaccine – in development at Oxford University – will take place on Thursday 23 April. Health secretary Matt Hancock revealed that £22.5 million in funding has also been given to Imperial College to develop a vaccine. Dependent on the success of both trials, Hancock added: “We’ll invest in manufacturing capacity, so that if either of these vaccines safely work, we can make it available for the British people as soon as humanly possible.” According to City AM, the government’s new funding has brought the vaccine trials forward by five full months.  

• The recent plummet in the price of crude oil, which fell below zero for the first time in history on Monday, highlights how significantly the coronavirus crisis has destroyed demand. US storage tanks have run out of space and oil companies are now paying traders to take the oil.

• UK airlines and holiday companies are breaking the law as they refuse to offer timely refunds to customers whose travel plans have been cancelled due to the coronavirus crisis, it has been revealed. By withholding refunds that should be paid within 14 days, 20 of the UK’s largest operators are breaking the law, Which? has found.

• Apple is launching its music service, Apple Music, in a further 52 countries and Netflix has welcomed nearly 16 million new subscribers globally as the coronavirus pandemic continues. The streaming company has recently become more valuable than Exxo Mobil – the US oil company, whose share price recently fell 3% – and Disney as there is a rise in demand for home entertainment. Shares in Netflix increased by 5% last week.

• It has been predicted that almost half of 2020’s sporting events will not take place this calendar year, according to Two Circles, a sports marketing and technology agency. Two Circles estimates that the global sport industry will generate $73.7 billion in revenue in 2020, based on 47% of sporting events now unlikely to take place, a significant drop from the $135.5 billion that was predicted before the pandemic hit.

• On the high street, Cath Kidston announced that it will permanently close all 60 if its UK stores. Part of the business was transferred to CK Acquisitions, a company owned by Baring Private Equity Asia (BPEA) – Cath Kidston’s Hong-Kong-based owner. The fashion label can continue to trade online, as under the terms of the transaction BPEA retained the e-commerce platform and franchise and wholesale businesses, according to City AM.

Primark has experienced a significant downfall in sales as the pandemic has forced store closures across Europe and the US. George Weston, chief executive of Associated British Foods (Primark’s owner) said: "From making sales of £650 million each month, since the last of our stores closed on 22 March, we have sold nothing".

In a bid to “mitigate” redundancies, earlier this week Halfords announced plans to transfer ownership of 11 of its 22 Cycle Republic stores to Pure Electric – a move which will save 85 jobs. Graham Stapleton said: “We will continue to do everything that we can to redeploy other colleagues who are impacted by our proposal elsewhere within our business.”

• Fast-food chain Burger King has not made its April rent payments and is among several other high street restaurant chains to request a nine-month rent holiday from the government during the coronavirus outbreak. A letter to the chancellor requesting that leases be extended by nine months has been signed by several restaurant bosses, including Burger King, Dishoom, Nando’s, Leon and Wahaca.

• Admiral is refunding £25 to its customers, putting other insurers under pressure to do the same as the UK lockdown continues. Chief executive of UK Insurance at Admiral Cristina Nestares acknowledged the “unprecedented time” and said: "We want to give the money we would have used to pay these claims back to our loyal customers in this difficult time."

• As the UK enters another three weeks of lockdown, insurer Hiscox expects to pay out around £142 million in coronavirus insurance claims if lockdown measures are extended. The company revealed that it believes “its business interruption exposure to covid-19 is limited in Hiscox Europe and it has negligible exposure in Hiscox US”.

• Metro Bank will refund £11.4 million to its customers after failing to warn nearly 130,000 of them about unarranged overdraft charges via text. Although texts were sent, they did not warn customers about upcoming charges or were not sent on time, as Part 6 of the Competition and Markets Authority Retail Banking Market Investigation Order 2017 requires.

As part of online bank Monzo’s stateside expansion, it has applied for a US banking licence which will allow it to offer a complete package of services in the world’s biggest financial market, according to City AM. Having operated as a fully licensed bank, with four million customers in the UK for three years, Monzo recently set its sights on a US expansion, which – given the population and wealth of the US – could lead to huge rewards.

• In a bid to support and fund coronavirus-related research projects, La Liga champions Barcelona will give 2020-21 sponsor naming rights to the Nou Camp, which has been the club’s stadium name since it opened in 1957. The club gave the title rights to its charitable foundation, Barca Foundation, which will manage the process to find a sponsor for 2020-21. The revenue generated from this will be donated to fighting coronavirus.

Be sure to check the News every Thursday for this weekly commercial news round-up. Follow @LawCareersNetUK on Twitter and like us on Facebook for instant business news updates.