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