Yahoo Finance Informa designs fashion revival as retail upheaval hits trade shows
The events and business information giant Informa is to plough extra cost cuts from its £4.3bn takeover of UBM into an attempt to revive its struggling fashion exhibitions unit, as online retailers challenge the traditional trade.
Lord Stephen Carter, Informa’s chief executive, said the £10m attempt to address the “underperformance” of the events would be funded from an increase in savings.
He said: “Fashion and retail are markets experiencing structural changes. That means you have to invest in your product. We are going to invest in price, in marketing and in product development.”
Fashion accounts for about a tenth of the combined businesses of Informa and UBM. Some events have been struggling in line with the upheaval on high streets and in shopping centres around the world as online fashion expands.
Barclays analysts said: “The problem for UBM’s tradeshows is that as the physical retailers send fewer attendees to the shows, the e-commerce players are not balancing this out with an equivalent increase.
“It is entirely plausible that the number of attendees at these shows will continue to fall as e-commerce continues to take its share of the pie.”
The plans for an overhaul were announced alongside a first half report in which margins fell short of City forecasts. Lord Carter said the smaller than expected increase in operating profit excluding UBM of 1.9pc was the resulted of currency movements and the depreciation of earlier investments. Revenues were up 4.3pc to £957.1m.
Informa shares dipped 4pc on the update, although remained up 13pc so far this year.
Lord Carter has been named by sources as a potential candidate for the role of BT chief executive to succeed Gavin Patterson.
He declined to comment on the vacancy and said: “I’m talking about Informa today.”
