PRESS DIGEST - British business - Jan 9

The Times

VIRGIN ISSUES CHALLENGE TO BA BY CUTTING BUSINESS FARES

Virgin Atlantic [VA.UL] is to announce that it is cutting Upper Class air fares in an attempt to secure bookings as the economic downturn deepens. A return trip to New York will fall by 40 percent to 1,099 pounds and a return to Boston by 38 percent to 1,199 pounds. British Airways (BAY.L), Virgin's rival, is expected to respond to the move with its own price cuts, despite insisting in the past that it was against reduced-price business fares.

SAINSBURY'S VALUE LINE JUMPS BY 40 PERCENT

J Sainsbury (SBRY.L), Britain's third-biggest supermarket, has reported a 40 percent increase in sales of its low-cost Basics range of products. Like-for-like sales in the 13 weeks to December 27 were up by 4.5 percent, though sales of its premium Taste the Difference range had fallen slightly. Sainsbury's has revealed plans to extend its Switch and Save campaign to its Basics range to highlight its value credentials to consumers during the economic downturn.

Daily Telegraph

MAJESTIC HANGOVER AS BUBBLY LOSES FIZZ

Retailer Majestic Wine (MJW.L) reported a 2.9 percent fall in like-for-like sales in the 10 weeks ending on January 5. Falling sales of champagne proved to be a factor as customers switched to wine and other sparkling drinks over the Christmas period. Chief executive Steve Lewis reported a "modest growth" in sales to Majestic's private customers and said he expected the retail environment to remain challenging throughout 2009.

TED BAKER HIT BY FIERCE PROMOTIONS

Fashion group Ted Baker (TBK.L) has lowered its profits guidance and warned that 2009 would be "a challenging year". Difficult trading conditions have led to expectations of full-year profits to come in at the lower end of 19 million to 23 million pounds. The clothing group reported a 7.2 percent increase in sales from November 1 to December 24, though gross margins were down by 2.5 percent as a result of "necessary" discounting. Founder and chief executive, Ray Kelvin, described the results as "a credible performance".

PERSIMMON'S HOUSE SALES FALL 36 PERCENT IN "CHALLENGING" MARKET

Housebuilder Persimmon (PSN.L) has revealed a 36 percent fall in the number of new houses sold as the property market continues to suffer from the financial crisis. The company legally completed the sale of 10,202 units in 2008, compared with 15,905 in 2007. Revenues of around 1.76 billion pounds are expected, which would be 42 percent less than 2007's 3.01 billion pounds. However, its average selling price of a home fell by just over nine percent, which was ahead of the 15.9 percent annual decline shown by data from mortgage lender Nationwide.

The Independent

WATERFORD WEDGWOOD IN BUYOUT TALKS WITH US FIRM

Hopes for the future of Waterford Wedgwood (WTF_u.I) have been boosted by news that U.S. private-equity firm KPS is determined to secure a deal to buy many of the company's assets. Administrators Deloitte revealed that the little-known New York-based company had signed a letter of intent, a move that could potentially save 2,700 jobs in the UK and Ireland. The two sides have been in talks since before the pottery firm went into administration, and are believed to be working to finalise a deal by the end of January.

DOZENS OF LAWYERS TO GO AT CLIFFORD CHANCE

Law firm Clifford Chance has said 70 to 80 of its City lawyers will be made redundant. The firm, which employs 1,000 staff in Canary Wharf and 3,800 worldwide, is also reviewing its business services division, which could also lead to further job cuts. Jeremy Sandelson, Clifford Chance's London regional managing partner, said the company was responding to "prevailing market conditions" as client needs changed due to the credit crunch. A spokeswoman for the firm said the redundancies would not include trainees.

TULLOW BOOSTED BY GHANA OIL DISCOVERY

UK-listed exploration group Tullow Oil (TLW.L) and its U.S. production partner, Anadarko Petroleum (APC.N), has struck oil in the Jubilee Field off the coast of Ghana. Tullow's Mahogany-3 appraisal well in the West Cape Three Points licence has established that the field extends further to the southeast than previously thought. Aidan Heavey, Tullow chief executive, described the find as "another excellent result" for the company. Tullow's share price rose by five percent to close at 747.5 pence following the announcement.

The Guardian

BRITAIN BEARS BRUNT OF RECRUITMENT DOWNTURN

Hays (HAYS.L) and Michael Page (MPI.L), two of Britain's largest recruitment firms, have warned that new hirings in the UK have fallen in the last three months, with firms cutting back more sharply than those overseas. Specialist recruitment group Hays said its net fees had fallen by six percent in the last three months of 2008, with profits in the UK and Ireland down by more than 20 percent. UK profits for Michael Page fell by almost a fifth in the same period, while group profits were down by 7.3 percent.

PEACOCKS PROUD AFTER LEAP IN CHRISTMAS SALES

Budget clothing retailer Peacocks has reported a 22 percent rise in like-for-like sales in the two weeks to January 2. The firm also described gross margins as "strongly positive" and revealed plans to create up to 750 new jobs. Peacocks has 526 stores and aims to open 50 new outlets over the next couple of years. Meanwhile, retail group House of Fraser has reported a 1.5 percent fall in like-for-like sales in the five weeks to January 3, though total sales were up by 4.5 percent.

Prepared for Reuters by Durrants