Daily Mail, London, Alex Brummer column
Jan 17, 2013 (Daily Mail - McClatchy-Tribune Information Services via COMTEX) --
Blockbuster was the last video rental chain alive on the high street. In my own corner of south-west London there used to be three such outlets, some of which actually offered films people wanted to watch.
Now all that is left is a dank-smelling Blockbuster, in a location where it is impossible to park, that offers dozens of similar action movies and little else. Yuk.
At least HMV never wholly abandoned its core music values and stocked a wide variety of rock and classical offerings.
Administrator Deloitte, the only true winner from the crisis on the high street, thinks there is something to salvage from Blockbuster. It observes that the core of the business is still profitable.
The focus on keeping the company trading will be on defining that core. But whatever it is the likelihood is that a fair proportion of the 528 outlets across Britain will end up closing.
Even more so than at HMV, technology is destroying the video rental model. The convergence of broadband delivery, satellite and the expansion of the terrestrial television giants such as ITV into the digital space will in all likelihood make video rental obsolete.
The small surpluses in some Blockbuster stores could quickly disappear.
After sport the next race for hegemony among the terrestrial broadcasters, BT, satellite and apps on mobile devices is going to be movies. LoveFilm and its kind provide next day delivery and online services.
It is hard to believe that video rental, particularly since it offers neither better choice nor a pleasant environment, can ever compete with that.
Whatever happens some of the 528 stores will be dumped on a rental market already bulging with the aftermath of Comet, Jessops, HMV and others. As we report today the spare capacity in the rented retail sector is soaring.
Landlords only have themselves to blame. Upward-only rental reviews, a refusal to make less advantageous deals with tenants, depending on their circumstances, and the onerous burden of business rates have all done enormous damage.
Now it is the landlords who should start to hurt.
Retail property values fell 6pc in 2012 and are clearly in for another jolt. They have fallen 30pc from the peak of the credit boom.
Most of the banks have given up on lending to local business wanting to buy their premises for fear that the only direction of property values is south. Rents have started to adjust downwards but not far enough to attract a new generation of shopkeepers.
The big property owners need to get real about rentals and prices on the high street. If they continue to bury heads in the sand, thinking that values are going to recover to 2007 values and beyond, they may be too late.
There will be no renters left apart from charity shops, fast food outlets and a handful of brave independent entrepreneurs.
AMERICA has a totally different attitude towards money than Britain.
Here we are still fighting the battles of 2007-09 against the bankers. All the top executives have been replaced and we have just had a grisly warning from Independent Commission on Banking supremo Sir John Vickers that he would like to see the ringfence between retail banking and investment banking electrified. He obviously wants to bring out more bodies.
On the other side of the Atlantic, JP Morgan chief executive Jamie Dimon has presided over a scandal that has cost his blue-blooded bank a $6bn trading loss. It is still being investigated by a long chain of regulators including the Department of Justice and Securities & Exchange Commission.
And his punishment The board has decided to hold his pay to $11.5m against $23m. That hardly looks like a transfer fee to skid row.
Goldman Sachs barely scraped through the financial crisis and had to be pulled back from the brink by Warren Buffett and government funds.
The very same chair and chief executive who led Goldman to the edge of the cliff, Lloyd Blankfein, still bestrides the firm like a colossus. The pay-and-bonus pool at pounds sterling 8.3bn, or pounds sterling 250,000 per employee, is edging upwards again.
As long as the profits pile up, no one seems to care how they are made or whether the rewards are deserved.
SHARES of First Choice owner TUI Travel were the biggest riser on the FTSE 100 after the revelation that it is in merger talks with its troubled German majority investor TUI AG.
Bringing the two together might yield some big cost savings. But the last thing Britain needs is another foreign takeover especially by a company dominated by two unaccountable tycoons Russian Alexey Mordashov and the Norwegian shipping giant John Fredriksen. That will not help minority investors.
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