Business – Page 80 – Michmutters

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ASX to edge down, Wall St lower broadly

ASX to edge down, Wall St lower broadly

On Wall Street, shares fell, paced by losses on the Dow. Real estate led all 11 of the S&P500 industry sectors down.

Today’s schedule

Local: Second quarter retail sales volumes at 11.30am AEST; NZ second quarter jobs data at 8.45am AEST

Overseas data: July services PMIs for China (Caixin), Japan (Nikkei), Euro zone (Markit) UK (Markit), US (Markit); Euro zone June PPI, June retail sales; US June factory and durable goods orders, July ISM non-manufacturing index

market highlights

ASX futures down 14 points or 0.2 per cent to 6893 near 6.30am AEST

  • AUD -1.5% to 69.20 US cents
  • Bitcoin +0.2% to $US23,039.74 near 6.30am AEST
  • On Wall Street: Dow -1.2% S&P500 -0.7% Nasdaq -0.2%
  • In New York: BHP -2.2% Rio -1.6% Atlassian +1.7%
  • Tesla +1.1% Apple -0.9% Amazon -0.9% Netflix -2.1%
  • In Europe: Stoxx 50 -0.6% FTSE -0.1% CAC -0.4% DAX -0.2%
  • Spot gold -0.01% to $US1771.97 an ounce at 1.59pm New York time
  • Brent crude +1.7% to $US101.69 a barrel
  • Iron ore +0.4% to $US113.30 a tonne
  • 10-year yield: US 2.75% Australia 2.97% Germany 0.81%
  • US prices as of 4.33pm in New York

United States

After years of just missing out on the top spot, JPMorgan Chase & Co’s equities trading business has finally eked out the No. 1 place on Wall Street.

Between April and June, the bank’s revenue from the business outperformed both Goldman Sachs Group and Morgan Stanley for the first time in a quarter since at least 2006, reaching nearly $US3.1 billion. Further down the ranking, a strong set of results Friday for BNP Paribas’s equities unit means it has overtaken Barclays this quarter.

US household debt increased by 2 per cent to $US16.2 trillion in the second quarter, with mortgages, auto loans and credit-card balances all seeing sizable increases, according to a report by the New York Federal Reserve Bank.

The increase in borrowing, which equals to $US312 billion over three months, reflected in part higher prices for homes and cars. Americans also are putting more on their credit cards to cover rising costs amid decades-high inflation.

US job openings fell in June to a nine-month low, suggesting tightness in the labor market is easing somewhat amid growing economic pressures.

The number of available positions decreased to 10.7 million in the month from an upwardly revised 11.3 million in May, the Labor Department’s Job Openings and Labor Turnover Survey, or JOLTS, showed. The 605,000 decline was the biggest since April 2020.

The level of openings was lower than all but one estimate in a Bloomberg survey of economists.

Europe

European shares fell on Tuesday as weak global factory data fanned economic slowdown fears.

The pan-European STOXX 600 slipped 0.2 per cent.

“After the best month for STOXX 600 in July, European equities are giving back some of those gains to kick off August, suggesting the rally was slightly overdone,” said Victoria Scholar, head of investment at Interactive Investor.

In Europe, miners were among the biggest drags, falling 1.4 per cent amid a drop in commodities’ prices as traders rushed to safer assets.

Semiconductor stocks such as ASML Holding, ASM International and BE Semiconductor fell between 1.2 per cent and 2.2 per cent.

Meanwhile, Moody’s Investors Service flagged an increased risk of stagflation in European Union countries.

Across European indexes, UK’S FTSE 100 fell the least among European peers thanks to bumper profits from oil giant BP, shares of which signed 2.8 per cent.

Maersk gained 2.1 per cent after raising its 2022 profit guidance for a second time following a beat in quarterly revenue, as congested supply chains boost freight rates.

Ferrari gained 1.1 per cent after beating earnings forecasts and reporting record orders for the second quarter, prompting the luxury sports car maker to also raise its full-year targets.

commodities

Dalian and Singapore iron ore futures rose in a volatile session on Tuesday, as traders focused on improving steel margins in top steel producer China, while weighing prospects of further output cuts.

The most-traded iron ore, for September delivery, on China’s Dalian Commodity Exchange ended daytime trade 1.5 per cent higher at 807 yuan ($US119.32) a tonne, near Monday’s four-week high of 817.50 yuan.

On the Singapore Exchange, the steelmaking ingredient’s benchmark September contract climbed 0.7 per cent to $US115.50 a tonne, as of 0725 GMT, but off the previous session’s four-week peak of $US120.95.

Copper edged lower on Tuesday alongside global equities as tensions between China and the United States and a run of weak economic data pushed investors to safer assets.

Benchmark copper on the London Metal Exchange (LME) was down 0.1 per cent at $US7815 a tonne at 1626 GMT, having fallen as low as $US7665.

Russian metals producer Nornickel said that its sales of nickel, palladium and platinum fell in the first half of 2022 due to disrupted supply chains, while net profit rose by 18 per cent to $US5.1 billion due to a stronger rouble.

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Business

The gender pay gap, being a for an employee, and false referee allegations in the workplace

The gender pay gap, being a for an employee, and false referee allegations in the workplace

Each week, Dr Kirstin Ferguson tackles questions on the workplace, career and leadership in her advice column “Got a Minute?” This week, a question about the gender pay gap, the difficulties of being a referee for an employee, and figuring out what to do after false allegations.

I am male and have since found out from a colleague that the person who hired me for my new role was instructed when he was recruiting that he could offer a higher salary to a suitably qualified female applicant. This is because the organization wants more females in management roles and wants to “close the gender pay gap” within the organization. I feel I have been discriminated against and am suffering financially as a result. Are they entitled to pay me less because of my gender?

If you hear office gossip saying you could have been paid more, it's time to get your facts straight.

If you hear office gossip saying you could have been paid more, it’s time to get your facts straight.Credit:Dionne Gain

Your employer should be applauded for wanting to ensure there is a gender balance in your workplace but also needs to understand the backlash from situations – such as you describe – can end up making their initiatives counter-productive. For you and for the women (and future women) in your business, it is important there is clarity on the efforts and work being done to ensure equality across the board. There was a great report on this exact issue around the issue of backlash prepared by Chief Executive Women in 2018, which is worth a read.

In your situation, before feeling you have been discriminated against I recommend seeing if you can get the facts first. It sounds like you were told by someone, who was told by someone else, that there was more money available for a female applicant. It is problematic enough that someone is divulging this confidential information but, to answer your question, of course no employer is entitled to pay anyone less because of their gender than her. However, it is clear at your new workplace, there is a gender pay gap and women have been getting paid less than their male colleagues for some time. It is not an ideal situation for anyone that these issues are being handled in this way so I recommend you go to HR and ask to understand your own circumstances more clearly.

How do you inform an employee, if you are their direct line manager, that you may not be the best person to be their referee? At times I am uncomfortable with the new position the person has applied for and know a poor job skill-set match may be detrimental to the person’s mental health. I am also wondering if being a referee for a poor performer to get them out of a job may be a thing?

I have been asked before about references and sometimes there is confusion about the type of reference being sought. I am going to be referring to references given verbally to a recruiter or a former employer, not a written reference that outlines the dates of employment and the role that may have been held (for the record, they should always be given).

In terms of the more subjective, verbal reference, the bottom line is if you don’t think you are the best person to be someone’s referee, for whatever reason, tell them that. This is especially the case if you have had to performance manage the person at all.

Reinforce the person any reference you give will always be completely honest, and that way the person can make their own choice about whether listing you as a referee is likely to be a good thing for them, or not.

You should never use giving a reference as a way to move a poor-performing employee onto someone else. If giving a reference means you are going to have to be dishonest and stay silent on a really important detail about their employment with you, don’t do it. I do think it is a step too far to refuse to be a referee just because you make an assessment that the future role will not be good for that person’s mental health. You don’t know that a new organization, a new culture, or even a new boss may be just what they need.

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Sydney, Melbourne house price plunge likely to accelerate

Sydney, Melbourne house price plunge likely to accelerate

“We’re seeing Sydney housing values ​​now falling at the fastest rate they have since the early 1980s, and in Melbourne, nearly as quickly as what we saw during the global financial crisis,” Lawless said.

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“It does look like this downturn is going to be a relatively sharp one, and maybe a short one as well, depending on what happens with interest rates. But it’s reasonable to expect that this rate of decline will probably worsen before it gets any better.”

The regions where price declines are the most pronounced are often those that saw the sharpest rises early in the pandemic, he says, meaning while the fall in valuations may look steep, prices are still far above where they were three years ago.

“The market does have quite a bit of room for values ​​to fall, and the vast majority of homeowners will still be in a positive position compared to what they paid for their property,” he said.

However, some economists have warned a full retracement of the strong price gains made during the pandemic could be possible in some regions.

Shane Oliver, chief economist at AMP, said the country’s housing market was “losing altitude rapidly”, forecasting average property prices to fall between 15 per cent and 20 per cent, as interest rates continue to rise and housing supply increases in Sydney and Melbourne.

“Assuming the cash rate tops out around 2.6 per cent early next year, as we expect, then average prices are likely to fall 15-20 per cent from top to bottom, with the low likely being reached in the second half of next year, ” he said.

“The fall in home prices this cycle could well see some cities – notably Sydney and Melbourne – reverse all or much of the boom in prices since their 2020 pandemic low, which will likely see a rise in negative equity for recent low-deposit buyers. ”

However, the economist acknowledged the plunge was still within the bounds of the typical cyclical nature of the housing market “albeit a bit more rapid”.

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For aspiring home buyers or sellers, Lawless advises against trying to time the market, saying people should work within the scope of their own financial circumstances. However, I have acknowledged that selling conditions would likely remain difficult from here on out, with the RBA likely to keep raising rates until Christmas.

“We’re not seeing any signs of panic selling, or dumping of [housing] stock on the market but, come spring, that will start to reverse, and you’ll see a lot more newly listed properties coming on the market at a time when demand is being negatively impacted,” he said.

“This means, for buyers, there’s going to be a lot more choice, less competition, and not much urgency – they can negotiate pretty hard.”

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ASX falls sharply, Wall Street sinks on US-China tension and economic uncertainty

Chess pieces are seen in front of displayed China's and U.S. flags.

Australian shares have dropped in morning trade, as ongoing economic uncertainty and flaring US-China tensions weighed on global market sentiment.

The arrival of US House of Representatives Speaker Nancy Pelosi in Taipei, despite warnings from Beijing, prompted China to launch war plans and buzz the Taiwan Strait in protest.

The ASX 200 dropped by a steeper-than-expected 0.9 per cent, to 6,938 points, by 10:35am AEST.

Nearly every sector traded lower, with utilities and materials suffering the biggest losses. Seven out of every 10 stocks were in the red.

Some of today’s worst performers include Champion Iron (-5.3pc), APA Group (-3.2pc), Seven Group (-3.2pc) and Eagers Automotive (-3.2pc).

On the flip side, some of the best performing stocks were Pinnacle Investment Management (+10.7pc), Block (+4.9pc), and Lynas Rare Earths (+4.6pc).

Aussie dollar sinks

The Australian dollar fell 0.4 per cent, to 68.9 US cents. That was on top of its sharp loss of 1.5 per cent overnight.

The sell-off began yesterday, when the Reserve Bank lifted its cash rate target by 0.5 percentage points, which takes the new rate to a six-year high of 1.85 per cent.

The weaker Australian dollar was also driven by a stronger US greenback as investors piled into currencies that are seen as “safe havens”.

In that regard, the Japanese yen jumped 0.9 per cent against the greenback, and was on track for a fifth day of gains, its longest winning streak since 2020.

“There is the uncertainty surrounding Pelosi’s trip to Taiwan and there’s additional data, regarding economic softness,” said Sam Stovall, chief investment strategist of CFRA Research.

“Regarding recession [in the United States]it’s not a question of ‘if’ but ‘when’ and how deep.”

‘An open question’ about further rate hikes

On Wall Street, the S&P 500 slipped by 0.7 per cent, to end the session at 4,091 points.

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Warning Australians could miss out on Christmas holiday flights, accommodation

Warning Australians could miss out on Christmas holiday flights, accommodation

If you thought the chaos at airports over the July school holidays was enough to send you mad, experts say a whole lot more pain is coming – and not just when it comes to flying.

With Christmas holidays creeping up and the busiest holiday period just around the corner, Aussies hoping for a breezy summer escape are being warned to book now – or face being left out in the cold.

Accommodation platform Stayz revealed one-in-five Aussies have already booked their end of year holiday, with newly released data predicting a possible sold out summer in top holiday home destinations over the Christmas break.

“Booking for year-end Christmas holidays in July is now the norm” says Simone Scoppa, travel expert at Stayz.

“Prior to the pandemic, we knew that travelers mostly booked Christmas holidays in the month of September. But, the last two years have seen this peak period move to July as travelers get in early to secure their holiday home.”

According to the research, families heading into the silly season are increasingly searching for whole holiday homes with pools, in a waterfront or beachside location, and for the accommodation offering to be pet friendly.

Ms Scoppa said heading into July and August, the most popular destinations that have seen a spike in summer bookings include the Fraser Coast in QLD, the South West region of WA, the Barossa wine region in South Australia and smaller coastal towns along the Great Ocean Road in Victoria.

Airbnb, who recently launched the ‘Categories’ section for unique-style homes, predict this summer will have an increased interest from the international market now that border restrictions are over.

“While traditional holiday destinations continue to be popular, last year we saw guests seeking stays in those lesser-known locations that might be slightly further afield,” Susan Wheeldon, Airbnb’s Country Manager for Australia and New Zealand, told news.com.au.

“This summer, Aussies won’t be the only ones snapping up fun and unique homes on Airbnb, with international travelers also looking to experience Down Under – from our world-famous coastal cities and towns, to breathtaking rural landscapes.”

Ms Wheeldon tips locations like Rye, Apollo Bay and Bright to be popular once again this summer, along with South West Rocks and Nelson Bay in NSW.

With airports and airlines across the country – but particularly along the east coast – battling staff shortages, flight cancellations and delays coupled with the post-Covid travel boom, experts warn travelers could be in for long wait times over the summer holidays for both domestic and international travel.

On Monday alone, 21 flights were canceled in Sydney across the Qantas, Virgin Australia, Jetstar and Rex networks. Virgin dumped 10 flights, Qantas nixed eight, with two pulled from Jetstar and one from Rex.

Melbourne Airport faced similar struggles, with 20 flights scrapped as of 8.30am.

This included seven flights from Qantas, five from Emirates and Virgin Australia, two from American Airlines and one from British Airways.

The flights canceled at both airports were between 6.30am and 7pm on Monday.

With airlines struggling to keep up with demand amid staff shortages, Qantas announced they would be reducing flights in July and August.

Domestic and International CEO Andrew David apologized to customers as a result of the ongoing chaos being faced at airports across the country.

“We are the national carrier, people have high expectations of us, we have high expectations of ourselves and clearly over the last few months we have not been delivering what we did pre-Covid,” he said.

“We have reduced some of our flying this month and we’re planning to do the same next month, recognizing the operation pressures we have.”

It is understood the airline will be rostering on extra staff for the Christmas period, and any large widebody aircraft will be deployed to assist with domestic flights if need be.

In 2022 alone, Aussies have faced a string of rising cost of living pressures and accommodation reservations have been no exemption.

It hasn’t exactly been cheap to holiday domestically for many years, but staggering figures show that it has gone from bad to worse in the past 13 months.

Data from trivago released in June – recorded hotel price shifts from more than 400 booking sites for over 2 million hotels around the world in its Hotel Price Index. The survey uncovered an astronomical increase in the price of an Aussie getaway.

It shows the average price of a hotel in Sydney has arisen almost 25 per cent over the past year while hotel rooms in Melbourne have seen a 24 per cent spike in the same period.

This means the average cost of a hotel room in Sydney is now above $240 per night, up from $206 a night a year ago. For Melbourne, the average cost is now $239, up from $200 in August last year.

The CEO of Tourism Accommodation Australia, Michael Johnson said the hike in prices came down to staff shortages still plaguing the industry, with many hotels forced to operate at 70 to 80 per cent capacity which was impacting revenue.

“I know hotels that are still looking for 30 to 40 staff, instead of running two restaurants they are only running one,” he said.

“They’re not taking conference bookings, because they just don’t have the staff to manage those bookings.”

But despite the angst and frustration following travelers to airports both domestically and internationally, Australians have not been deterred from traveling and there’s no sign of it waning off in the future, according to Finder’s Consumer Sentiment Tracker.

More than one-in-two (57 per cent) of Aussies are planning a getaway in the next 12 months, including 32 per cent who plan to travel within Australia, 12 per cent who plan to travel internationally, and 13 per cent who plan to travel both domestically and overseas.

This is up from 49 per cent last December.

According to Finder’s Covid Comfort Indicator, Aussies rank their level of comfort with overseas travel at 4.3 out of 10, up from 2.7 in January. They feel slightly more at ease with domestic travel, ranking it 6.1 out of 10.

“The travel industry is finally seeing some normalcy for the first time in over two years. People aren’t as concerned about prices, they just want to travel again,” said Angus Kidman, travel expert at Finder.

“The key to making the most of any travel sale is to be flexible with dates and open-minded about destinations. Don’t forget to book your travel insurance as soon as you’ve locked in your trip.”

Ms Scoppa agreed, saying with many Australians missing out on travel plans due to Covid-19 interrupting plans in 2021 – the advice was to be organized and book now.

“The advice is simple, we recommend that you book now for your Christmas holidays, rather than leaving it to the last minute, where there may be limited choice,” Ms Scoppa said.

“The Mackay and Central Coast NSW regions are typically favorite summer destinations, that in years past have been close to a sell out, so it is good news for travelers looking ahead to book for Christmas that availability is still looking good for these destinations.”

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Perth weather disruption continues as storm fronts lash WA, but power restored to airport

Perth weather disruption continues as storm fronts lash WA, but power restored to airport

Power has been restored to Perth Airport after a major outage sparked by severe weather caused widespread flight cancellations and overnight delays.

The severe weather, brought about by an once-in-a-year triple storm front hitting Western Australia, saw all outbound services scheduled to depart before 8:30pm on Tuesday grounded.

Check-ins, security screening and car park access were also affected.

Passengers were reportedly told to go home for the night and to contact their travel agents.

“Perth Airport is working to activate all systems across its terminals in order to become fully operational,” Perth Airport said in a statement.

A wide shot of passengers sitting inside a terminal at Perth Airport.
The power outage at the airport left passengers delayed and in many cases sent home.(Supplied: Night News)

“We ask passengers for their continued patience as our team and our airline partners work to get flights underway.”

The airport has apologized for the inconvenience, saying the safety of everyone who worked in or was traveling through Perth Airport remained its highest priority.

Thousands still without power

The airport was one of thousands of properties left without power across Perth as the first of three powerful cold fronts battered the state.

Debris from a collapsed ceiling lies across a living room.
The ceiling of a Joondalup home in Perth’s north collapsed overnight as the wild weather continued.(Supplied: Night News)

At the peak of the storm yesterday morning, Western Power said 35,000 customers were without electricity, but it has since been restored to more than 25,000 properties.

The wild weather is set to continue, with damaging winds averaging 65 kilometers per hour and peak gusts in excess of 100 kph likely along the west coast and Perth this morning, before conditions ease during the late afternoon.

Heavy showers and thunderstorms are also expected to persist throughout the day.

A wide shot of an emergency services vehicle outside a home damaged by bad weather at night.
Emergency services were called to a Port Kennedy home after it suffered damage to its roof and fence.(Supplied: Night News)

A severe weather warning for damaging surf is also in place, with significant wave heights exceeding 7 meters already occurring in exposed locations.

Swell forecasts of over 9.5 meters are predicted to hit Rottnest Island and Cape Naturaliste today.

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Sneakerboy collapse: Company owes $17.2 million to creditors, customers

Sneakerboy collapse: Company owes $17.2 million to creditors, customers

Several employees of a collapsed footwear company suspected the retailer was on its last legs for some time as they were accosted by angry creditors and customers on a daily basis, endured pay runs that were weeks late and never received their final entitlements.

Controversial luxury shoe retailer Sneakerboy went into voluntary administration in early July but two former staff members told news.com.au this was not surprising.

Five companies were included in the administration notice, Sneakerboy Pty Ltd and two related companies under the Sneakerboy name, and Luxury Retail Treasury Pty Ltd and Luxury Retail Group Pty Ltd (Sneakerboy’s parent company).

ASIC documents seen by news.com.au show the embattled company and its related companies owe $17.2 million to more than 100 creditors, including $200,000 to Nike.

A whopping $500,000 is also owed to 120 past and current staff members through unpaid wages and entitlements.

Elliot* worked for Sneakerboy since 2017 and is owed $15,000 from 220 hours of annual leave and roughly 12 months of superannuation that he never received after quitting in January this year.

“Since 2018 there were a few warning signs (at Sneakerboy), pay was occasionally a tiny bit late, like a day late,” he recalled to news.com.au.

“Then over the years it started to get out of control, in the last year it would be one to two weeks late. It was insane.”

The Melbourne worker, 34, was struggling to pay rent and groceries from the late payments and now works elsewhere, adding: “You get paid on time (at this new place), it’s crazy, it feels like such a treat.”

Elliot said from the beginning of his stint at the company he had doubts about the way Sneakerboy made money

“I felt like it wasn’t a sustainable business model, it was predicated on taking money from customers and using that as a loan to buy the shoes which is insane,” he said.

Customers would fork out cash for a pair of shoes, which was usually thousands of dollars as Sneakerboy sells sneakers by brands like Balenciaga and Canada Goose for well north of $1000. This money would then be used to actually buy the shoes — but the products would usually arrive weeks or months later as it was a pre-purchase order.

Wait times for sneakers usually blew out to weeks or months, causing angry customers to ring stores multiple times a day requesting for refunds.

Elliot said his store got “a lot of refund calls.”

“You would try to delay it as long as possible,” he added.

Things reached a head when one customer spent between $40,000 to $50,000 on sneakers — with plans to sell it on at a higher price at her home country of China. However, the shoes didn’t arrive for months.

“She put her own lock in front of the store, she put a bike lock on the front door,” Elliot said with a laugh.

“They had to get a locksmith. Some people were mad about it, but she spent tens of thousands of dollars and had n’t received her product from her so it was fair enough”.

It’s understood from creditors there are in excess of 1000 customers who prepaid for products which may now never arrive.

News.com.au has contacted Sneakerboy and its two co-owners for comment.

Do you know more or have a similar story? Continue the conversation | [email protected]

Struggling to pay rent

There were times when Elliot couldn’t afford rent because his pay arrived so late and he had to sell some of his own stuff.

“You’d have weeks where it’s like ‘cool, gotta sell a bunch of my own sneakers to pay rent’, it’s pretty cooked,” he said.

Although it looked like superannuation was being deposited into his account according to his pay slip, he knew this wasn’t the case.

“We’d all known for a couple of years our super wasn’t being paid properly, when you got the pay slips it said you were getting super but obviously they weren’t,” he added.

The Fair Work Ombudsman confirmed to news.com.au that it was investigating Sneakerboy over concerns from workers regarding their wages and entitlements.

A spokesperson told news.com.au the government department “has ongoing investigations in relation to Sneakerboy”.

“As these matters are ongoing, it is not appropriate for us to comment further at this time.”

Elliot said he could “tell Sneakerboy was going badly” because it was doing 40 per cent off sales even when they didn’t have stock available.

“It was fully desperate,” he said. “They were struggling for cash flow all the time.”

‘Blocked the exit’

Adam* worked at Sneakerboy’s Sydney store for four years and he claims the run-ins with angry customers and creditors made him develop depression.

“The constant pressure from management to keep selling on my day off and angry creditors have affected me mentally,” he told news.com.au.

“I had to visit a psychologist and psychiatrist to combat my depression.”

The 26-year-old resigned three months before Sneakerboy collapsed and said his mental health has improved since then as he has “moved on to better things”.

He alleges one of the worst interactions he had was with the landlord of his store who had not been paid rent for months.

“They were shouting at me and acting aggressively,” he said. “They blocked the exits, spoke very rudely and kicked me and other staff members out of the shop.”

He also said they got angry calls from contractors, including third party cleaning companies and delivery partners over unpaid bills.

“Customers were the most frequent and the worst,” Adam continued.

“They would abuse the staff members by shouting, swearing, acting aggressively, throwing fits, and threatening the staff member.

“Imagine you are getting this at least seven to nine times a day through phone calls or coming to the store.”

He added: “From my observation, every time Sneakerboy desperately needed money, they always start massive sales by offering high discounts for branded products.

“If you recall, last year, they did four or five massive warehouse sales, which is unusual for a business.”

Stephen Dixon from insolvency firm Hamilton Murphy Advisory was appointed as administrator at the beginning of July.

There are 36 potential buyers circling to try to acquire Sneakerboy, according to Mr Dixon.

“This interest has come from a range of international and Australian parties across a broad industry spectrum,” a statement from the company read.

“We appreciate and understand the concerns that all stakeholders to the Sneakerboy Group have, especially employees and customers,” Mr Dixon said.

“We continue to urgently work towards a sale of the business, as we believe that this will be the best outcome for creditors. Employee obligations are a critical part of the negotiations we are having with potential buyers.”

*Names withheld over privacy concerns

[email protected]

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Townsville’s ‘Sugar Shaker’ hotel is getting a makeover, prompting admirers to sift through its history

A black and white photo of Townsville's cityscape in the mid 70s. A round building, with what looks to be a spout, towers over.

It has been described as one Australia’s most recognizable buildings after the Sydney Opera House, but this icon is set for a face lift.

Townsville’s Sugar Shaker hotel has defined the city skyline for more than 46 years with its original brown sandstone color.

But now the building’s exterior is being completely repainted, prompting admirers to sift through its history.

An old, but color photograph of a busy city street. A post office sits before a much taller circular high rise building.
The “Sugar Shaker” is located in Townsville’s city heart on Flinders Street.(Supplied: Townsville City Council )

The hotel will maintain its silhouette, which resembles a sugar shaker with a distinctive spout-like shape at its peak.

Dr Mark Jones, a prominent Architect and Associate Professor at the University of Queensland, said the Sugar Shaker had become one of the most recognizable buildings in Australia.

“Most imagery of Townsville incorporates this building, not dissimilarly to the Sydney Opera House,” he said.

“I don’t think, apart from those two examples, there’s another building in Australia that so exemplifies the city in which it’s located.”

A black and white photograph taken from a helicopter captures the construction of a circular high rise building in the 1970s.
Townsville’s “Sugar Shaker” was built in the 1970s and remains the tallest building in the CBD.(Supplied: Townsville City Council)

Dr Jones said at the time the building opened in 1976 as Hotel Townsville there were two similar properties in the country; the Tower Mill Hotel in Brisbane, and Australia Square in Sydney.

“I suspect that the architects for the Sugar Shaker drew some inspiration from those two buildings,” he said.

“But they went a step further with this interesting enclosure on the roof air conditioning cooling towers that gives it a sugar shaker shape.”

A black and white photo of Townsville's Flinders Street Mall.
The hotel is often used in imagery used to market Townsville.(Supplied: Townsville City Council)

46 years after the building was erected in Townsville, debate on whether the resemblance was intentional continues.

“I’m not sure if they were directly thinking of a sugar shaker or if that came from people afterwards,” Dr Jones said.

“Either way, it’s a wonderful symbol for cane-growing region.

“I can’t think of another example, except for the sort of kitschy big banana and big pineapple-type installations.”

A wide shot of Townsville's modern CBD.
Forty-six years after the building was erected, the “Sugar Shaker” is being refurbished.(ABC North Qld: Chloe Chomicki)

Director of marketing for lobby group Townsville Enterprise Lisa Woolfe said there were several local theories about the design.

“Apparently, it was modeled off a sugar shaker that was sold in a nearby cafe,” she said.

“But I have also heard over the years people refer to it as a lipstick.”

A color photograph of a regional city with one circular building preceding over all of the other properties.
There is debate about whether the buildings likeness to a sugar shaker was intentional.(Supplied: Townsville City Council)

Townsville’s deputy mayor Mark Molachino said he suspected the architects were intentional with their design.

“I don’t know the history of design, I will be honest,” he said.

“But whoever did design it has made it look as close to a sugar shaker as possible, so they have done a good job with the likeness.”

The hotel has been known as Centra Townsville, Townsville International Hotel and Holiday Inn over the years, but is currently owned by Hotel Grand Chancellor.

Manager Paul Gray said it was a “daunting” task to choose a new color for the “iconic” building.

“Locals are very passionate about the Sugar Shaker, but it did need a refresh,” Mr Gray said.

A photo of several balconies on a sandstone building. Half of them have been painted gray and white.
The ‘Sugar Shaker’ is expected to have been completely repainted by the end of August.(ABC North Qld: Chloe Chomicki)

The refurbishment, including a complete repaint of the building, is due to be completed by the end of August.

“The building itself is being painted in grey,” Mr Gray said.

“It’s going to have white running up the risers, just to break it up a little bit as well.

“I think it’ll tie in quite nicely with the buildings around the city and look a lot more modern.”

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Business

F45 franchisees blindsided by turmoil at head office

F45 franchisees blindsided by turmoil at head office

Several franchisors this masthead spoke to said the issues afflicting the parent company headquarters has had next to no impact on their operations which are operating as usual. But some owners have had to deal with questions from members about whether they are closing down.

“It’s not ideal, because it just ends up meaning that you’ve then got spot fires that you’ve got to put out where there’s no fire,” said F45 Blakehurst owner and head trainer Rodger Talevski.

F45 operates a franchising model that grants franchisees ‘territory rights’ to operate a facility in a designated location, rights to use the F45 brand, and plug into all of F45’s systems and processes. Owners pay a fixed monthly franchise fee to F45.

Talevski said the churn levels for F45 franchisees were “very, very low” compared to the industry standard, and noted that while the company had reduced its expansion targets down from 1500 new branch openings to 350-450, that the revised figure was “still phenomenal”.

“F45 dominated the market and was innovative, and a lot of those people that keep talking down the brand are the ones that are copying it or trying to just basically look for holes [in] why the brand won’t last,” he said. “I just see a full glass, not a half empty glass.”

F45, which has more than 1500 franchise centers around the world, listed on the Nasdaq in July last year $US16. Shares have since tumbled by about 90 per cent.

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The company last week said it now expects to generate underlying earnings of $US25 million for the year ending December 31, compared to previous forecasts of up to $US100 million.

High-profile Australian co-founder Adam Gilchrist (not the cricketer) last week resigned from the business.

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Business

Will the house price collapse be different this time?

Will the house price collapse be different this time?

“They’re in park as opposed to fifth gear at the top end.”

Now, this is a sharp reversal of the usual pattern. Typically, when house prices fall, it’s the top end of the market that suffers the most savage declines.

Few can forget the eye-watering falls in house prices seen in prestige Sydney suburbs such as Mosman and Double Bay following the 2008 financial crisis.

Of course, there is a solid economic reason why the top end of the market is more vulnerable.

At the lower end of the market, a growing population feeds into an increasing demand for housing. But the value of housing is underpinned by the cost of bringing new houses to market – the cost of the land, for instance, and construction costs.

This effectively puts a floor under housing prices at the lower end of the market because developers have very limited scope for reducing the cost of new housing. This is especially the case when construction costs are soaring, as they are now.

As a result, even if mortgage rates rise sharply, the drop in house prices at the lower end of the market tends to be more moderate.

But at the top end of the market, a very high proportion of the cost of a prestige house reflects the cost of land, rather than the cost of construction.

And the cost of land at the top end of the market is a function of demand. Typically, the combination of rising interest rates and a slowing economy causes demand to drop sharply.

And this translates into a steep drop in land values. And because land values ​​at the top end of the market aren’t determined by, say, the cost of putting in roads, or building sewerage, land prices are much more responsive to general economic conditions.

What’s more, as bankers are aware, many people at the top end stretch themselves to the limit to afford expensive housing.

But the rise in interest rates – combined with falling share markets and the collapse in the value of digital currencies – mean that many new buyers are unlikely to want to pay the inflated prices that properties were trading at 12 months ago.

So why are prestige property prices so robust at present?

The most likely explanation is that there is a relative dearth of such properties on the market, and a sizeable cohort of buyers, including international buyers, and returning expats, with large chequebooks.

But if that’s the case, we should expect to see property values ​​at the top end of the market drop sharply once this temporary imbalance between supply and demand is cleared.

Indeed, as the Financial Review’s Nila Sweeney reported this week, house prices in some of the most expensive suburbs are now tumbling four times faster than the national average.

For instance, house prices in the Sydney northern beaches suburbs of Pittwater and Manly recorded price drops of 8.8 per cent and 7.4 per cent respectively in the July quarter, compared with a 2.2 per cent drop in the median house price nationwide.

Still, this could partly reflect an unwinding of the outsized gains these suburbs notched up in the past two years.

In Pittwater, for instance, house prices jumped by 53.3 per cent from the COVID-19 lows to the peak, but values ​​have since dropped by 10.1 per cent in total.