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Still Rolling for EMI - but all in the past

29 Jul 2008


Crumbs of comfort for EMI, owned by private-equity firm Terra Firma.

Boss Guy Hands suffered another psychological blow last week when the Rolling Stones quit the label after 31 years. Worse, the Stones didn't go to one of the hip-and-happening new concert promotion firms such as Live Nation. Instead Sir Mick Jagger & Co have joined EMI's arch-rival, Universal.

The good news is that Hands' team can celebrate a number one album this week. And what is the hit disc? Now That's What I Call Music, volume 70. This truly uninspiring series, a compilation of recent charts hits, has been running for 25 years and - against the odds - remains a pretty decent seller.

But is it exactly the sort of recording that is going to help EMI's reputation in the music industry after a string of major defections? City Spy fears not.

*Is the tide turning against Sir Fred Goodwin at Royal Bank of Scotland?

The reason City Spy asks is that an insider is on the blower from up there in "Fredinburgh", saying that the RBS chief has taken to wearing dark glasses in the street so he's not recognised (surely not? Presumably it was just a sunny day).

Part of the reason is said to be that there's growing disquiet about the bank's devotion to Formula 1, a passion of Goodwin, and in particular its sponsorship of the somewhat off-the-pace Williams racing team.

Till house prices do us part


An unforeseen consequence of the slump in the housing market could be fewer divorces. That's what upmarket estate agency Savills reckons, arguing that couples will have less equity in their home to split on separation.

Research man Lucian Cook says: "As house prices rise, homeowners undoubtedly feel wealthier, and our supposition is that they also feel able to afford to get divorced. We forecast that the current falls in property prices, unwelcome and uncomfortable for the majority, will result in fewer divorces."

Don't find this convincing? Well, Savills points to official figures showing a "remarkably strong correlation" between house prices and the divorce rate. Over the past 10 years, a peak in house prices has been followed by a rise in the number of divorces.

As house price growth has slowed, so too has the divorce rate...

*So "a couple of insiders" told The Observer's Will Hutton that the Government wants "a substantial correction" in house prices before it will intervene, US-style, "to stabilise the market". Hutton, who reveals that he sold the family home in a single week earlier this month, says we're already half to two-thirds the way towards the "necessary" adjustment from last year's peak. If they're already down 10%, does this mean ministers won't step in until sellers start knocking off 15% or 20%? Hutton seems to believe peak UK prices were 50% too high. Would it be rude for City Spy to ask how much he dropped his own asking price?

Nipped and tucked - the price of an interview suit in Mayfair


The economic slowdown is hitting the world of gentlemen's tailoring.

Apsley Tailors in Pall Mall is offering corporate customers a cut-price deal of £650 on new suits "to beat the credit crunch" - not that much more expensive than some off-the-peg retailers. The Mayfair store's offer includes a second pair of trousers, with a shirt and a tie thrown in as well.

Staff from Shell, HSBC, IBM and Deutsche Bank are among the past customers. Dapper Times columnist William Rees-Mogg and cricketer Sunil Gavaskar are also said to have been to visit.

Apsley claims it takes just four weeks to run up one of its suits, and that it's better value for money than a traditional Savile Row tailor, which would charge closer to £2500 and take as much as 14 weeks.

Some will say you get what you pay for, of course. But given the way jobs are being axed across the City, 14 weeks is a long time to wait when people need a new "interview suit"...

California dreamin', Arun?


A strange, prickly interview with Arun Sarin in the Financial Times. The overall sense the reader is left with is of someone who has little time for this country and its foibles, and can't wait to get back to California.

He's especially critical of the British system of having split the jobs of chairman and chief executive - yet it's a moot point whether if Vodafone had combined the roles, with Sarin succeeding Sir Christopher Gent as chief exec and chairman, say, he would have survived as long as he has.

It was Sir John Bond, the new chairman, who weathered the storms that erupted around Sarin early in his reign and soothed a nervous City. For Sarin to now say duality feels "a bit over the top" is frankly, a bit over the top.

*SARIN complains of having racked up tens of thousands of miles in air travel in the Vodafone job and of "wear and tear". The FT interview carries on: "That is why his first trip after retiring at Vodafone will be to go trekking with his wife in Nepal." Eh? Nepal is hardly just up the road and trekking there is rather more arduous than lying on a sun-lounger...

*ON activist shareholders and the way in the US, they tend to speak for large blocks of shares and here, they're tolerated even though they own next to nothing of a business, Sarin's comments are more spot-on.

"The noise-to-investment ratio is much higher" in the UK than the US, he says. Perhaps Sarin will take up the cudgels now he's leaving. He could call for a lessening of the attention paid to those with tiny stakes and loud voices. But he could also demand that institutional shareholders do more and that instead of just sitting there, they take more interest in the companies in which they have holdings.

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