Comment: Antony Jenkins has a tough gig even for an insider
BARCLAYS appears to have taken the easy option by appointing one of its own to succeed Bob Diamond as chief executive. But the list of challenges facing Antony Jenkins means that he faces a difficult few months.
Apart from the financial and reputational damage of the Libor scandal, the bank is under investigation from the regulators for mis-selling interest rate products and, as of yesterday, from the Serious Fraud Office over the funds it received from Qatar at the height of the banking crisis.
It is arguable that being an insider makes him incapable of bringing an independent eye to what needs to be done in order to change things round at Barclays, a task that includes a complete overhaul of the culture.
An equal case can be made for hiring from within the senior ranks as he will have first-hand knowledge of the bank’s inner workings. He should know what needs rooting out and what is worth salvaging. Expect his first action to be a “review” of operations.
But, firstly, critics will want assurances that the man who was in charge of global retail operations can provide answers over the mis-selling of payment protection insurance and those interest rate guarantees to small firms.
He also has to satisfy those who feel his appointment will raise questions over Barclays’ commitment to investment banking, given that he has no such experience. Already there is speculation that his elevation will hasten a split in the bank’s operations, leaving the investment banking business mainly to its US division while he oversees the bank’s retreat into more comforting high street banking so beloved of revenge-seeking politicians who have demonised so-called casino banking.
JJB never really had a sporting chance
IT LOOKS likely that the sports retail market will be left to a duopoly, now that JJB has thrown in the towel. The chain has been struggling to stay in the fight for some time and although it is now up for sale the immediate outcome is likely to be administration with its rivals, JD Sports and Sports Direct, cherry-picking the best sites and carving up the market between them.
It also marks a long demise of a business which at its height paid £290 million to acquire Sir Tom Hunter’s Sports Division. It was said at the time of the deal in 1998 that had Hunter dithered he may not have got such a good price as the market was already showing signs of peaking. JJB is now worth just £2m. JJB has been unable to trade its way out of trouble or to find the additional finance to support its plans. Shareholders are likely to be left with nothing.
It is another notch on a worrying list of fallen high street stars, but in each sector there are good performers. For every failed Clinton Cards there is Card Factory. While JJB is struggling its main competitors have continued to trade well.
Its demise is partly a rationalisation of the good from the bad, but it has been a painful process.
New job provides Fox with welcome challenge
SIMON Fox is clearly a man who loves a challenge. Fresh from trying to keep HMV alive, he’s taken on the top job at Trinity Mirror, the media group best known in Scotland as owner of the Daily Record and Sunday Mail.
His new employer believes that although HMV was a tough gig, he will have learned about the habits and preferences of younger consumers who choose to access media in different formats to earlier generations.
He shifted the focus of struggling HMV from selling CDs into the worlds of gaming and music downloads and it is expected to make a profit of £10m this year.
But the transformation is still work in progress and some media observers wonder why he didn’t accept the relatively easier challenge of a job at ITV.
However, Trinity has been able to raise its own profits target after a year which also saw the departures of some of its leading editors.
The Trinity board wants Fox to apply his knowledge of the internet to help it cope with the challenges of a changing media world. But he won’t have much more room for cost-cutting and the huge pensions deficit and launch of the Sun on Sunday present their own problems.