Many of Jaguar’s production processes belong to a different age
Many of Jaguar’s production processes belong to a different age. The car is also put together in an extraordinarily inefficient way. For a marque that sells fewer than 125,000 units a year, it is plainly ludicrous to manufacture out of three separate facilities. They Are expensive, they are notoriously unreliable, the after-sales service is terrible, they are small inside, there’s no diesel version and they are not particularly fast. Yet it would be impossible to imagine the Prime Minister being driven around in anything else, or even the Deputy Prime Minister with less than two of them.
There is something uniquely eloquent and quintessentially British about a Jaguar.
By rights, the company should have been out competed into oblivion by Mercedes, BMW and other luxury car marques years ago, but it is still there, and it still sells in some quantity, regardless of the quality control problems which famously causes some rich American purchasers to buy two – one for the road and one for the garage.Despite owning the brand for more than 15 years now, Ford has never really got to grips with the quality problem. “This approach is preliminary and there pre-conditions, including due diligence, which need to be satisfied before any formal offer can be made,” BFG said.. Other prospective bidders are also likely to be scared away by its £260m debt mountain, its £192m pension deficit and its relative lack of freehold sites, analysts said.Mr Grimsey said the board would be “minded” to recommend a cash offer of 110p, although in its statement BFG said Baugur has reserved the right to make an offer at a lower price after it has trawled through the books. It said like-for-like sales at its core Iceland chain, which it is trying to reposition as a convenience store retailer, had slid 3.8 per cent in the 10 weeks to 10 September – accelerating the 0.5 per cent decline reported in the 13 weeks to 2 July. He denied the update was a profits warning, adding: “We have managed our margins well, largely mitigating the sales impact of the difficult weather through tight cost control.”Analysts cast doubt on the possibility that another bidder could emerge for BFG, pointing to the regulatory restrictions preventing an offer from a rival food retailer.
Meanwhile, underlying sales at its Booker cash and carry chain fell 4.1 per cent, dragging total group like-for-like sales down 3.2 per cent during the period.Mr Grimsey, who is not part of Baugur’s bid attempt, blamed rival supermarket chains for ratcheting up the pricing war during a summer that is generally thought to have been bad for food retailers for Iceland’s woes. It also owns Hamleys, the toy shop group, Goldsmith, the jewellers, and recently bought Karen Millen and Whistles to create a mini high street fashion conglomerate with its Oasis and Coast chains.BFG said Baugur had teamed up with “certain other investment partners”, prompting speculation that one of them was Tom Hunter, the Scottish retailer who is close to Baugur and who also sold a chunky stake in House of Fraser on Monday.BFG seized the opportunity yesterday to warn that sales across the group had deteriorated since its profits warning in July. Shares in Big Food Group soared 11 per cent yesterday after the owner of the Iceland frozen food chain revealed it had received a £379m takeover approach from its biggest shareholder, the Icelandic retailer Baugur.
A bid would end a traumatic stock market existence for the group founded by Malcolm Walker, which has never recovered from a catastrophic profits warning almost four years ago. Mr Walker was later embroiled in an investigation by the Department of Trade and Industry for selling almost £14m of shares in the company only days before the warning.BFG, which was re-christened by its then new chief executive, Bill Grimsey, in 2002, admitted that Baugur had approached it with a 110p a share cash offer. It has agreed to open its books for Baugur, which has been linked with a possible takeover for BFG since it acquired a 15 per cent stake in it two years ago.
BFG’s shares climbed 10.5p to 102.75p.The acquisitive Icelandic group, which is adding to its leading position in Iceland by buying up Britain’s high streets, scooped a £26m profit from cashing in a 10 per cent stake in House of Fraser, the department store group, this week.Baugur, chaired by Jon Asgeir Johannesson has a stake in Somerfield. Plus it had to spend the £75m profit it made from selling its stake in Arcadia to Mr Green on something.Despite his pop star looks, Mr Johannesson was born into a retailing family. He cut his teeth at the family supermarket business and, when he was just 21, helped his father to set up what has since become a sprawling global retail group. The Johannesson family still owns 30 per cent of Baugur, after taking the company public in 1998.Mr Johannesson’s appetite for growth has made him something of a controversial figure in his native Iceland, not least because as well as controlling almost half of the country’s food retailing market, it also owns two of the country’s three daily newspapers, the main commercial television and radio stations, and has significant holdings in the insurance and property sectors to boot.A commission set up by the Icelandic government found Baugur’s dominant position was unmatched in any other democracy, prompting the country’s prime minister, David Oddsson, to shake up the media ownership laws.. But it took the group’s attempt to acquire the Top Shop-to-Dorothy Perkins group a year later for anyone to sit up and take notice.A second attempt to buy Arcadia, this time after teaming up with one Mr Green, went awry after its Reykjavik offices were raided by the police, but by then little could hold back the “Viking raiders”. But given the prolific rate at which the 36-year-old chairman of Baugur is buying up the UK high street it soon could be. After all, the average Joe or Joanna hadn’t heard of Philip Green not so long ago.
Mr Johannesson already runs Iceland’s leading retailer.
