Celebrity Influence

Mind The Gap! What Retailers Need To Know About Gender Pay Gap Reporting Obligations 

Big Brand Move In Italy Against Unauthorized Retailers

What to Look for When Buying Cyber Insurance.

Connect with your Millennial consumers in their territory: the Snapchat sphere.

Hotel Chocolat shows that re-registration from a private to a public company may be sweet for business

Celebrity Influence - The potential UK retail decline following Brexit

Author: Sarah Atkinson and Dan Larkin

The recent announcement of Robert De Niro’s planned luxury boutique hotel in Covent Garden has turned fresh attention to the continuing trend of high end boutique hotels opening in leading international cities under the sponsorship, not of established luxury hotel brands, but of movie celebrities, leading designers, luxury goods brands and other new entrants to this lodging niche (e.g. Bulgari, Armani, Palazzo Versace).

Operating luxury hotels, with their demanding clientele, has traditionally been the preserve of well-established luxury lodging groups, that developed their brands over generations. How is it possible for such new entrants to successfully compete? Time will tell, but a multiplicity of societal and industry changes underlie this development.

Firstly, in places like London, Paris, Hong Kong, San Francisco and New York, with their vibrant city centres full of world class dining, entertainment, retail and cultural offerings, visitors see their hotel, no matter how special, as only one of the focal points of their visit. Savvy individual travellers, once outside their hotel room, are more likely to head elsewhere for meals, shopping, general relaxation and nightlife. A boutique operator does not need to offer full service meeting, dining/banqueting and other services, which dramatically limits their need for building size and staff, allowing them plenty of financial headroom to compete with established larger properties so long as they provide deluxe rooms and service with selective dining and lounge facilities.

And the high end designers and suppliers to the trade are no longer the captive of the major lodging brands, meaning their services, outfitting, and consumables can be sourced effectively by knowledgeable independents. Large cities are well populated with experienced hoteliers, always eager to sign on with an interesting new hotel. As has been true in the United States for many years, Europe is now host to a healthy number of unbranded operating groups, who will white label their operational capabilities at all levels.

Combine this with the growing purchasing power of millennials, with their passion and thirst for cutting edge goods and experiences, a savvy boutique hotel owner/operator, together with a branding affiliation to a known connoisseur of luxury lifestyle such as a Hollywood movie star, has the opportunity to compete head on with established hotel brands.  

The other historical advantage of the lodging majors, marketing and distribution, has been undercut by the rise of online travel service intermediaries such as Expedia and Travelocity, to the point where groups like Hilton and Marriott now offer affinity brands for independents who want to run their own hotels but take advantage of the reservation platforms of larger groups (e.g. Curio by Hilton and Autograph by Marriott). And individual hotels can now easily offer ready access to their own website.

The commercial agreements underlying boutique luxury properties have accordingly required significant adaptation. In addition to the usual management, joint venture and loan agreements, there are a variety of other special contracts involved with third party operators, online/specialist travel agents, celebrity licensors, restaurant and retail groups, name designers, et al. Additionally, every country and city will have its own complex set of rules and regulations impacting hotel development and operations. Operating licences, building approvals, employment laws, proposals and tourist taxes, entity registrations…the list is long and the rules are ever changing.

No discussion of this kind would be complete without touching on the overwhelming influence of social media platforms in recent years, which has resulted in a modern cult of “celebrity” as never before. The ensuing marketing benefits to be reaped via endorsements from movie celebrities using such media for promotional purposes have been nothing short of astounding (and would of itself warrant another discussion entirely). This clearly has been a very useful element facilitating the synergy between the modern domination of celebrity culture and astute marketing goals, which of course has been exploited to great effect in cases such as celebrity hotel ventures.

As with any consumer brand, building recognition starts with an individual hotel property. Each component such as the location, physical product, service and ambiance of the hotel is fundamental. In today’s world, the right boutique product in the right market, is ever more able to capture and sustain a loyal base. 

This article was originally published on 1st November 2016 in Retail Leisure International.

Mind The Gap! What Retailers Need To Know About Gender Pay Gap Reporting Obligations

Author: Helen Webb

Mandatory gender pay gap reporting obligations are expected to become law in April 2017. We are still waiting for the final version of the relevant regulations, but it is anticipated these will be put before Parliament this autumn with a commencement date of April 2017.  

Gender pay gap reporting sounds a frightening prospect and a number of questions spring to mind. Who has to make a report? What information has to be reported? Where and when must the information be reported? What happens if I don’t report? What can I do to get ready? Bryan Cave can help you “mind the gap”!

Who has to report gender pay gap information?

First you need to clarify whether you will fall under the mandatory gender pay gap reporting obligations. You only have to make a gender pay gap report if you are an employer with 250 or more employees in Great Britain on the date a snapshot of pay data for the preceding pay period is taken. The first anticipated “snapshot” date is 30 April 2017.

Are casual workers i.e. workers under zero hours contracts or umbrella contracts to be counted? We are still waiting for clarification of the exact definition of “employee” within the final version of the regulations but it is believed these types of employee will fall within scope.    

What information has to be reported?

If you are required to make a gender pay gap report, the information you will be required to publish is:

  • Overall gender pay gap percentages using both the mean and median average gross hourly pay.
  • The numbers of men and women in each of four quartile pay bands, based on the employer’s pay range.
  • The proportion of male and female employees who received bonus pay within the preceding 12 months.
  • The gender pay gap percentage showing the difference between male and female bonus pay during the preceding 12 months.

The percentage pay difference between male and female employees is calculated as follows where A = average pay of all male employees and B= average pay of all female employees.

(A-B)/A x 100 = gender pay gap percentage

Pay is defined non-exhaustively in the draft regulations as basic pay, paid leave, maternity pay, sick pay, area allowances, shift premium pay, bonus pay and other pay (including car allowances paid through the payroll, on call and standby allowances, clothing, first aider or fire warden allowances.) It does not include pay from a different pay period, overtime pay, redundancy pay, benefits in kind, expenses, value of salary sacrifice schemes, arrears of pay and tax credits.

If you wish, you will also be able to publish a narrative to accompany the gender pay gap figures so that you may explain any pay gaps and set out the action which you intend to take to remedy them.

Any gender pay gap report must also be accompanied by a written statement of accuracy which is signed by a senior individual i.e. a company director, a partner, a designated member.

When must the information be reported and where?

A snapshot of pay data will be taken annually at a specific date. You will then have up to a year from that date in which to prepare and publish your gender pay gap information.    It is anticipated the first “snapshot” date will be April 2017, meaning the first gender pay gap reports will be required by April 2018.  

Employers must publish their gender pay gap report on their own website and keep the information online and available for three years. The report also has to be uploaded to a government website.

What happens if you do not report your gender pay gap?

There is no enforcement mechanism contained in the draft regulations. There are also no civil or criminal sanctions for a failure to publish gender pay information or for publishing misleading or inaccurate data.

However, consider the potential adverse publicity and reputational harm. The government has indicated that it will monitor non-compliance and may name and shame non-compliant employers.

What should you be doing to get ready?

  • Identify whether you are likely to fall under the gender pay gap reporting obligations, which will involve considering whether you will have 250 or more relevant employees when the snapshot of pay data is taken.
  • Appoint a director, partner or relevant senior employee to oversee and co-ordinate the collection of data and preparation of the report. They have to be prepared to sign off the report.
  • Consider whether you have a system in place which means you can easily gather and analyse pay data. If not, start preparing a system now.
  • Consider how you will address any gender pay concerns both internally and externally after the publication of your gender pay gap report? How can senior management and human resources reassure employees? You might also want to consider the appointment of public relations officers and marketing to handle external communications / website publications.

Big Brand Move In Italy Against Unauthorized Retailers

Authors: Luigi Zumbo and Arturo Battista

A significant judicial victory was scored in Italy this summer by Bryan Cave’s affiliated office (“SILS”) on behalf of big-name client Montblanc, of the international luxury group Richemont.

In a clear-cut decision issued by the Civil Court of Venice, where Montblanc Italy had summoned its former local retailer Office Store G., the principle was affirmed that unauthorized resellers are not entitled to affix their stamp onto the branded products’ “International Guarantee Certificates,” thereby officially validating them for the customers on behalf of the manufacturer.

Such behavior by generic retailers was found by the Venice Court – in the context of a properly-organized national “selective distribution system”, according to the applicable E.U. rules (as in Montblanc’s case) – to be unlawful, with respect to both trademark infringement and unfair competition restrictive regulations.

Worth of note is that, in the Italian judges’ view, even a few episodes of such unlawful behavior (only three “unauthorized stampings” had been actually proven in the instant case) deserve sanctioning, as they create confusion in the general public, misleading customers into assuming that the unauthorized retailer actually belong to the national distributor’s official resale network.

The precedent now set by the Court of Venice constitutes a serious blow to a rather com-mon practice among generic retailers, hitherto de facto tolerated by manufacturers and judges alike, and a powerful legal tool for luxury firms acting to defend their market position and brand reputation.

What to Look for When Buying Cyber Insurance

Authors: David Zetoony

Most retailers know they need insurance to cover risks to their property such as fire or theft, or their risk of liability if someone is injured in the workplace. As numerous high-profile breaches demonstrate, retailers also need to carry coverage for data breaches. While many insurance companies offer cyber insurance, not all policies are created equal.

Why is buying cyber insurance difficult?

  1. There is little standardization among competing policies; as a result, it is hard to comparison shop.
  2. Policies’ exclusions often swallow coverage; as a result, assessing the value of a policy is difficult unless you have extensive experience with the types of liabilities that arise following data breaches.
  3. Policies often cover security but not privacy risks.

Items to review when shopping for cyber insurance:

  1. Do the sub-limits on coverage match the corresponding risks?
  2. Does the policy include sub-retentions (sub-deductibles) that are unlikely to be reached?
  3. Does exclusion prevent payment for the largest risks, e.g.,charges that arise following a credit card breach, common theories alleged in class actions, etc.?
  4. Is voluntary notification of affected consumers covered?
  5. Will credit monitoring for affected consumers be covered?
  6. Who does the insurer have on panel for legal representation, forensic investigations and/or crisis management?

Connect with your Millennial consumers in their territory: the Snapchat sphere

Authors: Paula Levitan and Nicola Conway

Millennial brands should be alive to the merits of reaching out to customers through their favoured social media spheres, but must do so in the cautionary knowledge that their audience is oftentimes turned off by being "advertised to".

This is where Snapchat has the edge. The app allows retailers to publish "stories" of photographs and videos which remain live for only 24-hours, after which they are deleted. The lack of permanence of the material, and its fleeting availability, both relieves sales pitch and purchasing pressure and draws viewers into the sentiment that they are gaining an exclusive insight into the brand.

Another attraction to Snapchat is its impressive global reach; enticing over 100 million users (including 41% of all 18 to 34 year olds in the United States) who watch over 10 billion videos, every single day[1]. This publicity vehicle is already being utilized by major retailers to generate traffic towards their brands, including Gatorade, Calvin Klein, Nars, and Valentino. Some have enhanced their following further by teaming up with celebrity Snapchatters, for example Tommy Hilfiger who frequently collaborates with the ever more popular Gigi Hadid. These brands have taken the initiative to follow consumers onto their playground, rather than expecting to be sought out on their own platforms.

Whilst there is little hard and fast evidence to show that Snapchat stories directly contribute to sales, their potential to increase brand exposure on an international scale is encouraging.

Before using Snapchat, or any app, the implications of any provisions under applicable Terms of Use (including those dealing with intellectual property, privacy, data, and other rights) should be carefully considered. If you would like further information on any such implications, please contact a member of the Bryan Cave Retail Team.

Hotel Chocolat shows that re-registration from a private to a public company may be sweet for business

Authors: Paula Levitan and Nicola Conway

On 19 October 2016, Hotel Chocolat Group plc, a British chocolatier and cocoa grower, announced a year of significant progress in its preliminary results for the period ended 26 June 2016, with revenue up by 12% and profit before tax increased by 91%.                          

Some of this success may be attributed to its decision to admit its ordinary shares to trading on the Alternative Investment Market (AIM) of the London Stock Exchange back in May.

Oftentimes, companies are dissuaded from 'going public' by the associated regulatory, procedural and administrative burdens. Of note, a public company must:

  • have a minimum allotted share capital of £50,000 (or euro equivalent), with a quarter (plus any premium) being paid up;
  • comply with legal restrictions and limitations in relation to the types of shares that can be allotted, how they can be allotted, how they should be paid for, etc.;
  • hold an annual general meeting;
  • appoint auditors annually;
  • lay accounts before the general meeting;
  • appoint at least two directors and one suitably qualified company secretary;
  • fulfil onerous filing requirements;
  • comply with the provisions of the Takeover Code, etc.

However, the opportunity to raise equity capital by offering shares to the public on a recognised stock exchange has, in this case, seemingly outweighed the disadvantages. The price of shares in the company on the London Stock Exchange reached £2.75 on 20 October, having risen from £1.90 on 10 May.[2]

Going public not only facilitates an influx of outside investment and provides existing shareholders with the freedom to trade their shares more freely and easily, but also has the potential to increase brand exposure and awareness.

If you would like any further information on the legal challenges faced by companies converting from private to public, or from public to private, please get in touch with a member of the Bryan Cave Retail Team.

1. Statistics provided by Snapchat (https://www.snapchat.com/ads)

2. http://www.londonstockexchange.com/exchange/prices-and-markets/stocks/summary/company-summary/GB00BYZC3B04GBGBXAMSM.html?lang=en

Related Practices