Headlines

British fashion retailer Quiz said on Wednesday it would place its stores unit into administration and then buy the business back so it can try to renegotiate better rental terms, Reuters reported. Bricks and mortar retail in the United Kingdom was facing a major structural challenge prior to the outbreak of the coronavirus pandemic with the economics of operating stores on traditional leases proving increasingly difficult.

Deutsche Bank has warned its provisions for bad loans will surge to the highest level in more than a decade this quarter as the coronavirus crisis leaves the global economy mired in recession, the Financial Times reported. Germany’s biggest lender had earmarked a provision of just €506m for bad loans in the first three months of the year, but cautioned on Wednesday that the figure would increase this quarter.

Casual dining company The Restaurant Group is to shut 125 of its underperforming restaurants in a significant cut to the size of its estate, the Financial Times reported. The closure will largely impact its Frankie & Benny’s chain, and comes as the coronavirus pandemic and lockdowns in the UK have deepened the crisis in the mid-market restaurant sector, forcing companies to reduce their cost base and downsize operations.

U.K. Chancellor of the Exchequer Rishi Sunak is being asked by members of the ruling Conservative Party to take his time to pay off the record debt the country is racking up as it tries to weather the coronavirus pandemic, Bloomberg News reported. By that, they mean decades. With the economy on course for its deepest recession for at least a century, the government is now paying the wages of more than 10 million workers to stave off mass unemployment.

Across the continent, governments have spent at least $77 billion annually since 2013, erecting everything from critical infrastructure such as bridges and hospitals to sumptuous presidential villas and soaring monuments celebrating national heroes. The building binge has been fueled by at least $600 billion in loans, leaving African governments struggling with record debt, Bloomberg Businessweek reported. The obligations were manageable—barely—when countries in the region were expanding by as much as 10% annually.

A second wave of Covid-19 would deepen this year’s recession in Latin America’s three largest economies by more than 1 percentage point, according to the Organisation for Economic Co-operation and Development, Bloomberg News reported. Argentina and Brazil would suffer the biggest hits, shrinking by 10% and 9.1%, respectively, while Mexico would contract by 8.6%, Paris-based OECD said in a report published on Wednesday. A possible second wave of the virus could come between October and November following the easing of containment measures currently in place, the organization said.

British fashion retailers Monsoon and Accessorize will close 35 stores, make 545 staff redundant and seek rent cuts for remaining shops as part of a restructuring led by its founder to survive the COVID-19 crisis, Reuters reported. Administrators from business advisory firm FRP were appointed late on Tuesday and immediately sold the companies’ business and assets to Adena Brands, a company ultimately controlled by Peter Simon, who owned and founded Monsoon in 1973. The coronavirus pandemic and the subsequent national lockdown had made the business unviable.

Brussels will need to tackle Europe’s fragmented insolvency laws and create more uniform shareholder rights if it wants to build deeper capital markets and speed up its economic recovery, an official expert group has warned, the Financial Times reported. The group, led by former eurogroup chief official Thomas Wieser, said on Wednesday that previous EU attempts to build a unified capital market through legislation had fallen short, while Brexit and the Covid-19 pandemic had made the project more urgent.

Finland’s rapid recovery from the economic crisis caused by the coronavirus looks unlikely, but the worst-case scenarios have so far been avoided, Bank of Finland governor Olli Rehn said on Tuesday, Reuters reported. The bank believes Finland’s gross domestic product will contract around 7% this year and grow around 3% in 2021 and 2022, but said GDP contraction could be as little as 5% or as much as 11% in 2020 in alternative scenarios. “Finland has not experienced a sizeable wave of bankruptcies.

British businesses have borrowed nearly 35 billion pounds under three emergency credit programmes for companies hit by the coronavirus crisis with demand strongest for a 100% state-backed scheme for the smallest firms, Reuters reported. After a recent warning by lenders that some of the borrowing might prove unsustainable for companies hit by the COVID lockdown, the Treasury said total lending under the Bounce Back Loan Scheme (BBLS) rose to 23.8 billion pounds by June 7 from 21.3 billion pounds by May 31. That represented a slightly smaller increase than in the previous week.