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Retales™ : New Challenges for Retailers - hot issues to watch

20/01/2011

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United Kingdom

New Challenges for Retailers - hot issues to watch

After ushering in the New Year and, for some, starting to say goodbye to the last of the sale season it’s time to consider and be ready to act on the challenges 2011 will bring on the regulatory front. Quite apart from the economic environment, from the Royal Wedding to the new Bribery Act, plans to end the default retirement age, and yet more issues emerging on the on-line and e- and m-commerce front, 2011 promises to be a challenging year that retailers cannot afford to be caught off guard by.


End of the default retirement age - are you ready?

The Government's controversial decision to scrap the default retirement age from 6 April 2011 presents a number of challenges for all retailers. It will have far-reaching implications, impacting on resourcing, policy decisions, workplace discussions about retirement, operating costs and may also lead to an increase in litigation. This issue, along with others, will be covered at our forthcoming Annual HR Planner on Wednesday 26 January 2011. 
 
Contact: Nicholas Thorpe, Partner, Litigation, Employment and Pensions practice

Link to: Seminar

Bribery Act comes into force in April 2011

The Bribery Act creates the most onerous anti-corruption regime in the world and introduces a new corporate criminal offence of failing to prevent bribery. A company conducting business in the UK could be successfully prosecuted for bribes paid by employees, agents or business partners overseas even if the company knew nothing about the bribes. The Act applies to all bribes connected with business whether the improper payment is made to a public official or a private business person. The offence, for which the sanction may be an unlimited fine, and up to 10 years in prison for individuals, is one of strict liability but there is a statutory defence if the company can demonstrate that it had in place adequate procedures to prevent bribery. The government is expected to publish guidance before the end of January 2011 on what constitute adequate procedures.

Contact: Tony Lewis, Partner, Anti-corruption practice

Link to: Seminar

Overseas Expansion - how profitable can it be?

Many retailers are experiencing rapidly growing overseas profits as they expand into the many potentially lucrative international markets. But the returns are only as good as the product range and brand can generate and the chosen the business model can deliver. Our 2011 survey of fee structures successful retailers are using in their international models will enable you to benchmark whether your international returns are as good as they could be.

Contact Chris Wormald, Partner, Head of Retail; Co-Head of Franchising & Licensing practice

Link to: Survey | Workshop | Seminar

A Royal Wedding in 2011 - Don't sail too close to the mark! 

In the year that will (no pun intended) see the royal wedding of the future King and his Queen, retailers must exercise caution not to use on their products or in their advertising any reference, insignia or device referring to the royal arms or attempt to register as a trade mark any reference to the royal crown, royal flags, or any member of the royal family, without the appropriate permission, to avoid breaching UK law.

How to apply for the appropriate permissions from The Lord Chamberlain's Office will be covered at our next "IP Workshop for Retailers", where in “round-the-table” format we cover the management, protection and exploitation of retailers’ intellectual property assets.

Contact: Leighton Cassidy, Partner, IP and Technology practice, Trade Marks

Link to: Workshop

Corporate use of social media - celebrity bloggers and employee-defamers

Retail and Social Media...promotional genius or a path with hidden pitfalls? Celebrity endorsements via twitter and blogs may boost sales but failure to disclose that celebrities have been paid to endorse the products risks breaching UK consumer protection law and attracting regulatory censure. Another ticking time-bomb to defuse is the negative employee blog/tweet or an ill-conceived viral social media strategy which develops an unwanted life of its own! To avoid reading internal employment issues or finding negative external publicity produced by employees online, and to deftly manage your way through the social media minefield, appropriate guidelines and control strategies are crucial. 

Contact: David Naylor, Partner, Technology and Outsourcing practice

Link to: Seminar

Online advertisers beware - the ASA is watching....

The conventional terrain of retailers’ unregulated company websites is no more: the Advertising Standards Agency’s remit now extends to regulating  marketing communications on a company’s own website and other non-paid-for online space under their control. This will come into effect on 1 March 2011. The main goal is to protect consumers targeted in the UK by the advertisements; but are retailers aware of the do’s and don’ts? Only time will tell how aggressively the ASA will police online marketing communications but it is likely to be rigorous in the initial months. 

Contact: David Bond, Partner, Head of Advertising & Marketing practice

Link to: Workshop

Data Protection - more sanctions for getting it wrong

‘Accountability' looks set to become 2011's data protection buzz-word.  The need for appropriate policies, procedures and training demonstrating accountability will become increasingly important in guarding against data protection breaches and warding off regulatory action as the Information Commissioner’s Office is expected increasingly to flex its muscles in 2011, having issued its first fines in November last year: one for £60k after the loss of an unencrypted laptop and one for £100k for misdirected communications. The ICO can now fine up to £500k for serious data protection breaches.

New requirements for online retailers to obtain visitors' 'consent' to cookie use will come into effect. These will have a particular impact on website advertising platforms that use cookies - retailers whose websites serve targeted adverts must be aware of their responsibilities.

Contact: Stewart Room and Eduardo Ustaran, Partners, Privacy and Information law practice

Link to: Seminar

Cloud computing: releasing the potential while managing the risks

Broadly, the cloud promises much better IT management and future proofing and radical cost reduction. It should benefit retailers’ head office systems and on-line channels. However, some suppliers have yet to develop robust enough solutions when it comes to private customer details and financial transactions. It is important to identify the problems prior to commencing a procurement. This is the latest twist in the ongoing challenge of managing the cost and performance of third party logistics providers who often have the upper hand. How can retailers build effective third party contacting strategies?

Contact: Simon Briskman, Partner, Technology and Outsourcing practice

Link to: Seminar

Should you and your staff share the Government's enthusiasm for employee ownership?

The Government is clearly enthusiastic about what the John Lewis business model can do to revitalise public services: are other retailers missing this way to improve corporate performance? Should you be reviewing your employee ownership arrangements and incentive plans? We have been acknowledged as offering ‘exceptional expertise in the employee ownership field’ and partner Graeme Nuttall as ‘the UK’s leading authority on the implementation and management of employee ownership’.

Contact: Graeme Nuttall, Partner, Head of Equity Incentives, Tax and Charities practices

Too good to be true?

You are being offered a consignment of goods at a great price or some goods which you cannot usually source yourself; it's very tempting! Unless you are buying from the manufacturer or its authorised distributor, you need to take care before you bite off your supplier's hand to make sure that you are buying genuine goods that have been put on sale in the European Union by the trade mark owner or with its consent. Otherwise you risk being sued by the manufacturer which could result in having to withdraw the goods from sale and pay substantial damages. We have advised a number of major retailers on how to manage their risk when buying goods other than from the manufacturer or its authorised distributor.

Contact: Lewis Cohen, Partner, Commercial Intellectual Property practice

Could your leases be anti-competitive?

Land may defy many of the ordinary legal rules of commerce, but from 6 April this year it will be brought sharply back into line with everyone else in one respect at least... and that's competition. Restrictive covenants in leases will need to be scrutinised carefully for competition law compliance. This means that covenants that are found to be anti-competitive will be void and unenforceable, with serious commercial consequences, and could expose the parties to fines. This is somewhat at odds with OFT guidance which suggests that in practice the impact will be small. Use restrictions in retail estate developments will need expert legal assessment to avoid these problems.

Contact: Nick Pimlott, Partner, Competition and EU Regulatory practice
Lesley Webber, Partner, Real Estate and Real Estate Litigation practice

Link to: Briefing paper

Love thy neighbour?

The Localism Bill published in December 2010 sees a radical shift of power from the centralised state to local communities, with a new legal duty that will require retailers (among others) to consult widely with the community before they submit planning applications. Look out for more of our planning communications seminars which show how to effectively involve the community in your proposals and secure a substantial competitive advantage over those who try to steamroller schemes over nimbys or just head straight for appeal. 

Contact: Lesley Webber, Partner, Real Estate and Real Estate Litigation practice

Link to: Seminar | Briefing paper

And finally...Maybe it's because I'm a Londoner...or maybe not!  The global destination for high end retail

It would be difficult to believe, whilst negotiating a perilous path through heavily laden shoppers on some of the better known shopping pavements in London, that there had ever been a credit crunch. Evidence from rent reviews of some of the best retail spaces in town with which we've been involved, confirms that the London West End retail market has been largely insulated from economic downturn and that a presence in one of the prestigious London retail frontages such as Bond Street makes a major global statement for luxury brands. Property experts say that London is now the top city destination for global shopping over competitors New York and Tokyo.

Contact: Lesley Webber, Partner, Real Estate and Real Estate Litigation practice

Link to: Workshop

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