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Fraud clean-up hits Steinhoff earnings

Scandal-plagued South African retailer Steinhoff has reported a US$4 billion ($5.72 billion) operating loss in the 2017 fiscal year, in a much-delayed earnings report revealing the impact of a US$7.4 billion ($10.6 billion) accounting fraud.

The company blamed writedowns for the loss as it cleans up its balance sheet. Total writedowns have already topped €13 billion ($20.9 billion) since revealing the fraud that left it on the brink of collapse and wiped out more than 200 billion rand ($19.95 billion) of shareholder equity. Steinhoff is also listed in Frankfurt.

An investigation by auditor PwC released in March found that eight people, including former Steinhoff executives, were involved in a complex scheme where potential intercompany transactions worth €6.5 billion ($10.44 billion) were fraudulently recorded as external income to prop up profits and hide costs in money-losing subsidiaries.

The 2018 results are now due on June 18.

Amazon faces strike in Poland

Following strikes for better pay and conditions in Germany and Spain last year, Amazon’s workers in Poland are now demanding that their salaries be roughly doubled.

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“We earn three times less than workers in Germany and we work longer hours,” said Maria Malinowska from the Workers Initiative union. “Amazon can’t prey on the fact that it is in Poland, where wages in some regions are lower.”

The Polish workers want an hourly net salary of at least 25 zlotys ($9.34) as well as a slower work rate, changes to the way workers are assessed and the withdrawal of temporary contracts, Reuters reports.

The unions said that if their demands were not met within seven days, they would take the first step in a process which could ultimately result in a strike.

Debenhams creditors approve closures

The creditors of struggling British department store group Debenhams have backed a restructuring plan that will see 22 of the company’s 166 stores closed next year, putting 1200 jobs at risk.

The lenders took control last month in a rescue deal that wiped out the company’s shareholders, including Sports Direct boss Mike Ashley, who had tried to buy the whole group.

Once the UK’s biggest department store chain, Debenhams was hit by a sharp slowdown in sales, high rents and ballooning debt. Administrators, appointed after Ashley’s last-ditch bid to rescue the company failed, sold the group to its creditors including British banks and US hedge funds.

Walmart to stop tobacco sales to minors

Walmart has joined a growing list of US retailers tightening the rules around tobacco sales to young people. Starting in July, those under the age of 21 will no longer be able to buy tobacco products from US Walmart or Sam’s Club stores.

Walmart’s move comes after a letter from the Food and Drug Administration last month that requested it to submit a plan to end illegal tobacco sales to minors.

Walmart will also no longer sell “fruit- and dessert-flavoured electronic nicotine delivery systems” or other devices for vaping, according to the company’s announcement.

Walgreens will stop selling them to customers under 21 in September, while Rite Aid announced in April it would remove e-cigarettes from its stores over the next 90 days. CVS stopped selling tobacco products in 2014.

Uber faces day of rage

A day of strikes by Uber drivers in cities around the world has attempted to draw attention to widespread, longstanding grievances against the ride-hailing giant’s employment and pay practices.

There were strikes and protests across the globe last Wednesday. In the UK, for example, thousands protested against what one trade union labelled “poverty pay”.

In Melbourne, about 30 protesters gathered near an Uber facility, holding signs that said, “On-demand workers demand a living wage,” and chanting: “Uber, Uber, you must listen. We will break your algorithm!” (The workers say that the company’s algorithm makes it hard to figure out how much wages are due.)

The organisers had hoped to disrupt Uber’s initial public offering on May 10. The company was expected to be valued at more than US$80 billion ($114 billion) in its IPO, and its early investors – including founder Travis Kalanick and Amazon boss Jeff Bezos – to reap billions of dollars.

This did not happen, however, as the IPO closed at US$41.57, on its first day of trade down 7.6 per cent from its offer price.

Metro to sell off Real chain

German retailer Metro is in exclusive talks to sell its Real hypermarkets to a consortium led by real estate investor Redos, Reuters reports.

Metro said it was taking a €385 million ($618 million) impairment charge on the loss-making chain.

Once a sprawling retail conglomerate, Metro has been restructuring in recent years to focus on its core cash-and-carry business.

It has long sought to shed the Real hypermarkets chain, which has annual sales of more than €7 billion ($11.2 billion) but has struggled for years in a fiercely competitive German market, dominated by discounters Aldi and Lidl.


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