Hello and welcome to the Journal Business team's morning live blog for Tuesday, September 27.

I'm Coreena Ford and I'm running the live blog this week to bring you regular updates on all the breaking business news from across the North East and beyond.

The business breakfast live blog covers the latest big stories from the region's business community, as well as national news, FTSE updates and stock exchange announcements from the Journal region's listed companies and national firms - anything and everything from the world of business basically.

This morning we've got all the details on how your company could get into the coveted North East Top 200, which we launch today. Plus there is news from Thomas Cook, which admits it is still under pressure as the travel market continues to be affected by recent terror attacks.

If you'd like to contribute tweet at @jnlbusiness to share your opinions, drop me a line at coreena.ford@ncjmedia.co.uk or tweet me at @Scoopford

Have a great day

That’s the end of today’s blog - I’ll be back again tomorrow morning...!

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Challenging times in the UK. . .but House of Fraser is launching in China

House of Fraser, which was bought by Chinese conglomerate Sanpower Group for £480 million in 2014, also said it was launching six concessions of toy chain Hamleys - owned by another Chinese group, C.banner International.

C.banner International reportedly said in April it was considering buying a stake in House of Fraser.

House of Fraser’s ambitions to launch in China have also been in sharp focus, after a launch in Nanjing is understood to have been delayed.

But the group confirmed its first store will open in Nanjing in late 2016 “as planned”, with a ceremony taking place at the end of the year.

It added: “Inspired by our iconic Frasers store in Glasgow, the new store in Nanjing will provide a unique retail experience for the Chinese market, offering a broad range of exciting international and local brands to our customers.”

In the UK, House of Fraser has been overhauling five stores over its half-year, which are due to finish by the end of next month or early November, as part of a wider refurbishment.

This will bring the total of stores refurbished to 12 over two years. House of Fraser is also adding new brands including All Saints, Monsoon and Mulberry to its portfolio.

The group said like-for-like branded and concession sales rose by 2.1% and 1.3% respectively over its first half, excluding Virgin Travel concessions, which it has been scaling back over the past year. Its House brand sales fell by 3.7%.

Online sales rose 17.8% and now account for more than a fifth - 20.7% - of all turnover.

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House of Fraser warns of "very challenging" trading conditions

Department store chain House of Fraser, which has a store at the intu Metrocentre, became the latest retailer to warn over high street conditions as it revealed sales woes amid “very challenging” trading.

The group reported flat sales over the six months to July 30 and said trading had worsened since then amid low consumer confidence and the disruption of a store revamp plan. It posted a 2% drop in sales over the eight weeks to September 24.

Nigel Oddy, chief executive of House of Fraser, said:

We have, like many of our peers, experienced an extremely volatile trading environment since the final quarter of fiscal year 2016, and we expect this uncertain economic situation to remain for some time.

But the group said it was “cautiously optimistic” of a bounce-back over the all-important festive quarter, when it makes around 85% of its entire year’s profits.

House of Fraser adds to a mounting list of retailers alerting over difficult high street trading, with John Lewis and Next also recently cautioning over a shift in consumer spending.

Frank Slevin, executive chairman of House of Fraser, said:

The UK retail sector is facing significant change in structural dynamics as consumers shopping habits and delivery expectations continue to evolve.

House of Fraser reported interim sales of £573.5 million, in line with a year earlier, while underlying like-for-like sales edged 0.9% higher, stripping out Virgin Travel concessions.

Underlying earnings dropped sharply to £1.1 million from £9.2 million a year ago, but it said this was largely down to a fall in financial services income. Gross profits nudged up by £2.5 million to £207.2 million.

The House of Fraser store on Oxford Street in London
The House of Fraser store on Oxford Street in London
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Profits rise at Northumbrian Water

Northumbrian Water is gearing up for changes in the UK water market on the back of healthy turnover and profit, accounts show.

The company - which supplies water to 2.7m people in the North East and around 1.8m in Essex and East Anglia, along with contracts in Scotland, Ireland and Gibraltar - reported revenue in the 12 months to March 31 of £831.8m with a profit before tax of £131m.

A change in reporting dates meant this year’s figures were judged against a 15-month period but profit grew despite the shorter timescale.

The year saw Northumbrian Water make £223.2m of capital investment, most of it into the maintenance of its water and sewer networks and into schemes to reduce the risk of flooding.

The water market is set to see its biggest changes since privatisation next year when business customers are given the choice of who supplies their water.

Regulator Ofwat has also proposed opening the household market to new companies from next year, saying that increased competition could result in smaller bills.

One of Northumbrian Water's treatment works
One of Northumbrian Water's treatment works (Image: Northumbrian Water)
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Eighty jobs created at gaming giant tombola

Gaming giant tombola is creating 80 new jobs as part of plans to extend its software development workforce.

The Sunderland-based business, which already employs around 310 people in the city, has announced the recruitment drive as part of an ambitious growth strategy to double in size by 2021.

Most of the newcomers will be based in the new £5m, 25,000sqft office next to its current HQ, which has been designed by Newcastle-based Ryder Architecture.

“The expansion is in line with our 20:20 strategy to double our turnover and our workforce over five years,” said chief executive Phil Cronin.

“About 75 % of these new roles will be in software development. Other roles will include animators, graphic designers and in product management.

“Most of these roles will be based in our new building, and some in our Rose Line Building. What we want to do with our new office is create the best working environment for our team – modern, welcoming, a place where people enjoy coming to work.

“We’re a tech company, and with the addition of these new positions, we’ll be one of the biggest employers of software developers in the region – with about 120 positions.”

How Tombola's new HQ, designed by Ryder Architecture, will look
How Tombola's new HQ, designed by Ryder Architecture, will look
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Consett Popcorn Company quadruples turnover

A gourmet popcorn maker in County Durham has conquered a niche sector of the health food market following a £150,000 investment boost.

Consett Popcorn Company Limited has quadrupled its turnover and created four new jobs following the investment from the North East Angel Fund, managed by Rivers Capital Partners.

The firm was the UK’s very first gourmet savoury and sweet popcorn manufacturer when it was founded in 2009 by husband-and-wife team Richard and Catherine Furze, who had a vision to make and brand clean label popcorn to suit all tastes.

In the three years since the company’s incorporation, the couple invested £25,000 of their own personal savings into the business.

Now Soil Association Accredited following the investment from Rivers Capital in December 2014, the firm is operating from a manufacturing facility in Consett where it has scaled up processes and purchased larger, more dynamic equipment to distribute their produce UK-wide as well as exporting to Holland.

Read the full story here.

Simon Johnson, Rivers Capital Partners and Catherine Furze, Consett Popcorn
Simon Johnson, Rivers Capital Partners and Catherine Furze, Consett Popcorn
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FTSE and pound latest . . .

The FTSE-100 index at 8:45am was up 12.42 at 6830.46.

The pound at 9am was 1.2972 dollars compared to 1.2976 dollars at the previous close. The euro at 9am was 0.8677 pounds compared to 0.8682 pounds at the previous close.

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Popular share prices - latest

Admiral Grp £20} XD - 1/8

Aviva 438} + 5/8

BAE Systems 518} - }

BP 432

BT Grp 389 1/8 - 5/8

Centrica 226 5/8 + 1\

GlaxoSmithKline 1645\ XD + 11}

HSBC HLDGS 577{ XD + 8 3/8

Intl Cons Airl 390 7/8 - 3 5/8

M & S 313 - 5/8

National Grid 1082} + 3}

Pennon Grp 890\ + 4\

Sainsbury 249 7/8 + 1\

Severn £24 7/8 + \

SSE 1534{ XD + 6{

Tate Lyle 728{ - {

Tesco 176 3/8

United Utils 994} + 8}

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No tears for Boohoo.com after 129% profits rise

Online retailer Boohoo.com has reported a surge in profits for the first half of the year after strong demand for its plus-size and petite clothing helped sales soar.

The fast-fashion firm said pre-tax profits rocketed 129% to £14.3 million in the six months to August 31, while sales rose 40% to £127.3 million.

Boohoo said its performance was driven by its core womenswear ranges, plus-size and petite clothing and a standalone menswear website, where sales have doubled.

Boohoo saw growth in every geography, with revenue rising 38% in the UK, 41% in Europe and 93% in the US.

The company said the collapse of sterling against the US dollar has “not significantly” affected its results because it has hedged against currency fluctuations. However, it added that a weaker pound “does provide the opportunity to use promotional activity to generate incremental international sales”, adding: “It remains to be seen what the longer term effect of continued sterling weakness might be in the supply chain.”

The firm’s joint chief executives, Mahmud Kamani and Carol Kane, said that, as a result of the strong results, they now expect revenue growth for the full year of between 30% and 35%.

They added: “Through our constant focus on what matters to our customers, together with our investment in technology and operational improvements, we will continue to deliver profitable growth.”

(They also sell pet clothes as you can see. . .).

Not so random photo of a dog in a Christmas jumper currently sold on Boohoo.com
Not so random photo of a dog in a Christmas jumper currently sold on Boohoo.com
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800 jobs to go as Plumb Center plans store closures

Plumb Center owner Wolseley is set to axe up to 800 jobs - 13% of its entire UK workforce - as part of a restructuring that will see it shut 80 branches and a distribution centre.

The shake-up, which will cost the firm £100 million, comes amid a challenging period in the UK, where it has seen a sharp slowdown in growth.

Wolseley said:

The closure of around 80 branches and one distribution centre is expected to lead to up to 800 job losses, the impact of which we will minimise through redeployment and attrition as far as possible.

The programme is subject to consultation which will commence shortly and is expected to take 90 days.

The group employs 6,000 people in the UK and operates across 750 branches, including 20 branches across Tyneside, Northumberland, County Durham and Wearside.

The firm said that in the UK, which accounts for 8% of its profits, the repair, maintenance and improvement markets had declined and growth was “weak” as it flagged a challenging environment.

Wolseley said the restructuring, the result of a review, is expected to generate £25 million to £30 million of annual cost savings when complete.

The group made the announcement alongside full-year results, which saw overall revenues rise 4.2% at constant exchange rates to £14.4 billion.

Pre-tax profit rose from £508 million to £727 million, driven by the US, where it operates Ferguson and where the bulk of its business lies.

A Wolseley warehouse in Ripon, North Yorkshire
A Wolseley warehouse in Ripon, North Yorkshire
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Brexit vote and sterling slide also knocks tourism industry

The travel industry has been knocked hard by a string of terrorist attacks in Turkey, Belgium, and Paris and Nice in France, while the Brexit vote and plunging pound have also taken a toll.

The owner of UK airline Monarch revealed yesterday that it is in talks over a potential takeover of the carrier and is preparing to throw it a multimillion-pound lifeline.

This comes after Low Cost Holidays collapsed earlier this year, affecting more than 140,000 customers.

In its latest update, Thomas Cook said prices of UK summer bookings were 5% lower over the summer as it sold more “seat-only” flight deals alongside its package holidays.

The group said summer bookings dropped 6% in Germany, although it said it fared better than the wider weak tour operator market.

Holiday bookings over the winter season have followed a similar pattern, with strong demand from the UK being offset by a weaker performance across Europe.

The group said its winter season was 27% sold so far, which is in line with a year earlier, with UK bookings up 8% and ongoing weak demand in Germany and Belgium.

But customers are booking already for next summer to snap up the best deals, with bookings ahead across all its markets and prices also higher, it said.

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Thomas Cook feeling effects of terror attacks

Tour operator Thomas Cook said bookings remained under pressure as the travel market continues to be hit by recent terror attacks.

The holiday giant revealed that while demand from British sunseekers was robust over the summer, with bookings up 1%, sales were hit hard in Germany and across Continental Europe, tumbling by 9%.

It said bookings were also “significantly down” in Belgium after the terrorist attacks at Brussels airport in March.

But stripping out the impact of sharply lower demand for trips to previously popular destination Turkey, it said bookings surged by 13% over the summer in the UK and were 8% higher overall.

Chief executive Peter Fankhauser insisted travellers still wanted to holiday overseas, but have switched to destinations such as the Balearic and Canary Islands and the United States, alongside smaller destinations like Bulgaria and Cuba.

He said: “Customers’ desire to go abroad on holiday has remained strong, with the exception of Turkey where demand continues to be volatile.”

Thomas Cook cut its annual earnings outlook in July as it warned over the impact of the terrorist incidents.

(Image: Owen Humphreys/PA Wire)
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Could your firm make it into the Top 200?

The search is on to find which companies will earn the prestige of a place in the latest annual North East Top 200 – and with it, perhaps, an award.

Our updated business list of distinction – once more organised by The Journal and The Gazette, and run with associate sponsor North East England Chamber of Commerce - will be published exclusively soon.

This will come in a free supplement with The Journal and The Gazette of Wednesday, November 16, and will contain the full table with further facts, figures and background. Surprises in the table are certain.

Besides pinpointing the region’s corporate success stories, the table will give good indications of the region’s current business performance over all, and its various sectors. Expert opinion suggests portents are good.

Companies that think they may merit a place in the table should follow guidelines set out here, where you’ll also find the all-important deadline.

Seldom before, if ever, has the distinction of an appearance in the list promised greater benefit.

With Brexit upon us, the priority in coming months is to find rewarding new markets - particularly abroad, as Trade Secretary Liam Fox has trenchantly reminded business bosses.

Firms that can say they’re in their region’s Top 200 immediately win attention, according to those already thriving on overseas business - and it works well at home too.

The Journal and Gazette Top 200 Breakfast took place at the Stadium of Light, Sunderland, last year and it will host the event again this year
The Journal and Gazette Top 200 Breakfast took place at the Stadium of Light, Sunderland, last year and it will host the event again this year
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