Monthly Archives: July 2016

Sexual slavery on top of migrant taskforce hit list

Domestic slavery, sex slaves and scandal-ridden convenience store chain 7-Eleven are top of the agenda for a new powerful government-run migrant taskforce headed by Professor Allan Fels.

Professor Fels will write to 7-Eleven this week seeking details on its compensation scheme and workplace compliance to ensure it is addressing systemic wage fraud across its franchise network.

Nervous shareholders sold down on Coles boss John Durkan’s claims of weaker grocery market sales, slicing almost 6 per cent from the share price to $41.45.

Broker JPMorgan said Coles’ sales performance was disappointing and significantly below its forecast  first-quarter growth rate of 3.3 per cent.

Fels sacked

The scheme was initially headed by Professor Fels before the company sacked him in May after refusing to agree to new conditions the company wanted to introduce that he believed would make the wage panel “bogus”.

Professor Fels told Fairfax Media the letter to 7-Eleven would request the methods it was using to assess compensation claims to thousands of workers who were underpaid over decades. Some were paid as little as $5 an hour.

cutting prices fend off

Wesfarmers boss Richard Goyder has promised to keep cutting prices at Coles to guard against resurgent rival Woolworths.

Mr Goyder said Coles had built a price gap, which it planned to safeguard through being “fleet footed” and “as aggressive as ever” but he said the supermarket business remained committed to its long-term every-day-low-prices strategy

Wesfarmers did not provide any insight on the supermarket’s sales performance in the first few weeks of the second quarter but retail insiders suggest it’s on a similar track to the first quarter and determined not to follow competitors into irrational promotions.

If comparable sales growth slips back in this period, it will make four quarters of weakening sales growth at the supermarket chain and suggest the Woolworths turnaround is accelerating at the expense of its biggest rival.

“What we’re not going to do is deal with short-term market concerns by compromising on what we want to do long term,” Mr Goyder said.

“We want positive comps [comparable store growth] and positive sales momentum … it’s pretty hard to stay at those highs of 3 or 4 per cent … I think investors absolutely understand that.”

Pumpkin Patch appoints administrators

Children’s clothing retailer Pumpkin Patch has been tipped into receivership by its lenders and has appointed voluntary administrators after failing to reinvent itself in the face of shrinking sales and too much debt.

Auckland-based Pumpkin Patch’s board appointed McGrathNicol’s Andrew Grenfell and Conor McElhinney as administrators and said it understood KordaMentha’s Neale Jackson and Brendon Gibson had been named receivers.

Last week the retailer said there was virtually no value left in its equity after talks with its lender ANZ Bank New Zealand fell through.

“Despite considerable efforts by the board and its management team, it has become evident that no solution is available to the company, at this time, to address the current over-leveraged and significantly capital constrained position,” chairman Peter Schuyt and managing director Luke Bunt said in a statement.

“With no likely solution available, the board believes that the constraints currently experienced by the business are too great and the only appropriate action to best protect the interests of stakeholders is to appoint administrators.”

In its full-year results published last month, Pumpkin Patch told investors its directors had given an undertaking to the bank that it would put forward proposals by October 20, which was later pushed out to October 31. The capital constraints were highlighted in the accounts as a “material risk” to the ongoing viability of the business.