Breakfast briefing: Retail news on the Co-op, John Lewis and Ocado

Banks ready £300m syndicated loans to back Co-op pharmacy unit sell-off

Banks are readying around £300m syndicated loans to support a possible sale of UK’s Co-operative Group’s pharmacy business, Reuters reported citing banking sources. Rothschild has been appointed to advise on the pharmacy business sell-off, which is at an early stage and is part of a broader restructuring of the member-owned group, the banking sources said. Bankers are preparing around £270m-£300m of debt funding to back the pharmacy unit sale or around 4.5-5 times the unit’s approximate £60m earnings before interest, taxes, depreciation and amortisation (EBITDA).

Meanwhile, private equity firms, including Corsair Capital, were approached to participate in a £400m rescue fundraising for the struggling Co-op Bank, according to Sky News and a source familiar with the matter. However, the source said no serious discussions have taken place between Co-op Bank and Corsair about the private equity firm acquiring a stake in it. Sky News also said that Apollo Global Management had expressed an interest in Co-op Bank.

John Lewis enters high-end Smart TV market with LG partnership

UK’s largest department store chain John Lewis has teamed up with LG Electronics to launch its first range of own-brand smart TVs, Marketing Magazine reported. The retailer is looking to capitalise on the reputation it holds when it comes to consumer electronics by entering the high-end Smart TV market for the first time. The John Lewis Smart TVs will start at £1,399 and will range up to £2,199 depending on the screen size.

Ocado feels investors’ ire over levels of pay and bonuses

Online grocery business Ocado has suffered shareholders’ revolt, with one in five investors going against its remuneration report and almost one in eight voting against the remuneration policy, The Telegraph reported. Ocado shareholders appear to have been concerned by the FTSE 250 group’s five-year ‘growth incentive plan’ (GIP), which could deliver shares currently worth £18m to chief executive Tim Steiner if the company meets targets. Ocado stressed that to hit the targets to deliver such bonuses, the company would have to outperform the FTSE 100 index by 20% a year.

An Ocado spokesman said: “We have made changes to Ocado’s remuneration policies this year in order to retain and incentivise the senior team through what will be a crucial period in the group’s future. There is huge growth potential in online grocery and Ocado is uniquely placed to benefit from this.”

Bank’s commercial director Carl Brewins departs

Carl Brewins, commercial director at young fashion retailer Bank, has left after joining the company in November 2013, Drapers reported. Brewins intends to consider opportunities outside of the fashion industry. It is unknown if Bank will replace him.