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G7 officials have backed European efforts to tap billions of euros of profits generated from frozen Russian assets, a day after US Treasury secretary Janet Yellen swung behind the idea.

Finance ministers and central bank governors meeting in Marrakech said on Thursday evening they had agreed to explore how “extraordinary revenues” from frozen Russian central bank reserves could aid Ukraine.

The endorsement follows Yellen’s approval of EU proposals on Wednesday, and is aimed at reviving Brussels’ plans to find a way of tapping into the revenues.

Member states have been struggling to make headway due to opposition from some EU countries over legal concerns, and warnings of financial risks from the European Central Bank.

The proposals would see the EU hand a portion of profits booked on more than €200bn-worth of financial assets owned by the Russian state to Ukraine.

In the days that followed Russia’s full-scale invasion of Ukraine in February 2022, more than $300bn in central bank reserves were frozen by Kyiv’s western allies. Of those $300bn, more than €200bn worth of assets are held in Europe.

Most of this is caught in the plumbing of the European financial system, run by the world’s largest clearing house: the Brussels-headquartered Euroclear.

Ever since the assets were frozen, ideas have circulated about how they could be used to aid Ukraine. Many are wary of full confiscation, arguing that this would breach international law.

Rather than seize the assets, some officials have instead advocated imposing a levy on the excess, or windfall, profit made by Euroclear. This levy would be applied on the profits derived from the interest paid on Russia’s assets.

Euroclear declined to comment for this story.

Euroclear fulfils a crucial role in financial markets: ensuring payments get made.

To do its job, Euroclear receives payments, such as a coupon on a bond, and passes these on to the owners of the asset. But, as the assets in question are owned by the Russian central bank — an entity that is under EU sanctions, Euroclear has to hold on to the revenue.

Euroclear usually reinvests large cash balances, earning a fast-increasing amount of interest, owing to the ECB’s rapid succession of rate rises, which have taken benchmark eurozone interest rates from minus 0.5 per cent to 4 per cent.

It is this reinvestment pool that the EU would like to tap, arguing that it constitutes a “windfall profit” that would not exist without its sanctions regime.

In the first half of this year, Euroclear made €1.28bn in profits as a result of Russian sanctions, according to the clearing house’s most recent quarterly results.

EU officials first want to make it mandatory for Euroclear to set these profits aside. Only later will they decide how exactly to make them available to Ukraine.

The ECB warned the European Commission in June that the plans could shake the confidence of global markets and destabilise the euro.

Their concern centres around a view that, should the EU seize profits made on assets held by a foreign state, other central banks will seek to sell their euro-denominated assets.

Central banks hold more than €2.2tn of their wealth in assets denominated in the single currency, according to IMF data. Many of those central banks represent states that have foreign policies at odds with those of the EU and the US.

EU member states have also been divided on the issue. Some countries like Germany have raised questions as to the legal implications of accessing the funds stocked up at Euroclear.

To minimise the risks, the ECB, several EU countries and the European Commission want the proposals to get the nod from their G7 partners, the most important of which is the US.

A breakthrough occurred on Wednesday when Yellen made clear that she supported “harnessing windfall proceeds from Russian sovereign assets immobilised in particular clearinghouses and using the funds to support Ukraine”. She said this was part of broader efforts to “ensure Russia pays for the damage it has caused”.

The post-meeting statement from G7 central bank governors and finance ministers on Thursday suggested other administrations would also support the Euroclear plan.

The statement said that the allies would “explore how any extraordinary revenues held by private entities stemming directly from immobilised Russian sovereign assets, where those extraordinary revenues are not required to meet obligations towards Russia under applicable laws, could be directed to support Ukraine and its recovery and reconstruction in compliance with applicable laws”.

EU officials said that Yellen’s remarks, plus the G7 statement, could help alleviate European critics’ concerns.

“International co-ordination with like-minded partners is fundamental for advancing the work,” an EU diplomat said. “It’s positive that we are getting some support and reassurance from other partners,” an EU official said.

Belgium on Wednesday said it would use the corporate tax it already collects on Euroclear’s profits to create a €1.7bn fund dedicated to Ukraine.

Prime minister Alexander De Croo said that the money would be used to buy military equipment and for humanitarian support.

Belgium is taxing the revenues at a regular corporate tax rate of 25 per cent, which yielded some €600mn this year. The taxation revenue is estimated to hit €1.7bn next year, according to a person briefed on the matter.

The EU levy to tap into the windfall profits would be set at a “higher percentage” than the Belgian corporate tax, one bloc official said.

Increase comes after UK government axed rest of line to Manchester in bid to save £36bn

The cost of building the London-to-Birmingham stretch of the UK’s HS2 high-speed railway has jumped by a fifth in just four months, underlining the challenges the government still faces in delivering the troubled project.

Last week, Prime Minister Rishi Sunak committed to building the full southern leg of the scheme even as he announced it would no longer run on to Manchester. He claimed the move would save £36bn.

Around the same time, the Department for Transport published figures showing that the upper cost estimate of the London-to-Birmingham leg, in 2019 prices, had risen sharply from £45bn in June to £54bn in October.

In today’s prices, that figure would rise to £68bn, according to calculations by the Financial Times.

This compares with an original budget of just under £33bn for the whole Y-shaped railway, which would have connected London to both Manchester and Leeds via Birmingham, when it was approved in early 2012.

The London-to-Birmingham line, which is still six years away from opening, has been plagued by budget overruns and delays as well as allegations of mismanagement in the decade since work on the railway started.

The state-funded organisation running the project is without a chief executive after Mark Thurston resigned after six years in the job in July. 

Jon Thompson, formerly chief executive of the Financial Reporting Council, has taken over as executive chair for an interim period while a replacement is found.

Professor Stephen Glaister, a transport economist at Imperial College London said: “There is something fundamentally wrong with the governance,” pointing to heavily redacted boardroom minutes and “a persistent lack of transparency”.

The transport department said in a statement that HS2’s “governance [was] being strengthened to further increase the focus on cost control and increase government oversight”.

The i newspaper previously reported the DfT disclosure.

Last week the government stripped HS2’s management of responsibility for rebuilding Euston station, the London terminus of HS2, and one of the most expensive parts of what remains of the project.

There is still no detailed plan for the site, despite the demolition of homes and businesses in preparation for the work.

Sunak said he would bring in private sector developers to build a Canary Wharf-style development around Euston that would subsidise the rebuilding of the station.

Government officials have said the Euston rebuild may not be completed without private investment, but the transport department has insisted that HS2 will run to the station.

Although soaring construction costs have contributed to the budget increases, an internal report last year pointed to wider problems. 

Two of the four consortiums hired to oversee the engineering work did not have “sufficient capacity and capability to manage all the various obligations placed upon them”, it found.

The internal report also criticised the project for its decision to record costs in 2019 prices. This meant none of the figures reflected “what has been or is being paid”.

A top civil servant warned last week that Sunak’s decision to build only the first phase of HS2 and axe the line north of Birmingham had damaged the economic rationale for the project.

In a letter to the House of Commons public accounts committee, Dame Bernadette Kelly, the DfT’s permanent secretary, wrote: “Taking an estimated range for the total costs of phase 1 and assessing them against the estimated total benefits [the project] would represent poor value for money.”

The former NBA stars are expected to help as the sports brand aims to hit $10 billion in sales by 2027.

Reebok is serious about reestablishing a foothold in the sports arena and is bringing some high-powered names on board to make it happen.

On Wednesday, the company revealed that Shaquille O’Neal would be officially joining Reebok in the newly created role of president of basketball. In addition, Allen Iverson has joined the brand as vice president of basketball.

Both of the former athletes have longstanding relationships with Reebok as well as its parent company, Authentic Brands Group. Authentic bought Reebok for 2.1 billion euros from Adidas in August 2022.

“Looking back on my career with Reebok and in basketball, this appointment means everything to me,” O’Neal told WWD. “It’s a reminder of where I’ve come from and what I’ve built. I’m just motivated to make an impact and bring the brand back to the place it belongs in basketball.”

He added that he is also eager to be working closely with Iverson to build the business. “AI [Allen Iverson] is a founding father of Reebok Basketball and has left a lasting impact on the game and its surrounding culture. There is no one I’d rather work with to bring in a new generation of ballers to Reebok than him. Shaq and AI back at it — feels good.”

O’Neal teased his new role on Instagram over the weekend when he posted a photo of himself wearing a 2024 Shaq for President T-shirt. The shirt will be sold by Reebok starting Wednesday with Reebok Basketball on the back.

The goal for Reebok as a whole, according to the brand’s top executives, is to hit $10 billion in sales by 2027. At the time of the acquisition, Reebok had global retail sales of $3.7 billion and Authentic had projected it would hit $5 billion a year after the completion of the sale. But Reebok has already exceeded that estimate, according to Nick Woodhouse, president and chief marketing officer of Authentic.

“We’re going to be very close to $6 billion in ’23,” he said, pointing to strength in apparel as well as “better global distribution, and just bringing more heat to the brand.”

A big spark will be lit by adding O’Neal to the management team, he believes. The former NBA star signed his initial endorsement deal with Reebok — the brand’s largest ever at that time — prior to his rookie season in 1992. That relationship included the introduction of O’Neal’s first signature shoe, the “Shaq Attaq,” followed by a host of irreverent and disruptive ad campaigns and products that helped establish Reebok as a leader in the basketball space.

Iverson signed with Reebok in 1996, ahead of his rookie season.

But during the years it was owned by Adidas, Reebok lost its position in basketball as well as other sports as the German parent focused most of its attention on its flagship brand.

When word got out in 2019 that Adidas was open to selling Reebok, O’Neal was among the most vocal proponents that Authentic, the brand management firm in which he is a partner, should acquire the business.

“Authentic has had a partnership with Shaquille for a while and he was so instrumental in buying Reebok,” Woodhouse said. Since the deal was finalized, O’Neal was constantly offering suggestions to the team on what could be done with the brand. “He said we have to get back in sport,” Woodhouse said.

The team agreed.

“We love the retro business and some of the other stuff we’re doing in fashion, but we’re a sport brand, that’s what we were founded in,” he added.

So together with Todd Krinsky, chief executive officer of Reebok, they decided to make O’Neal an unprecedented offer. “There are a lot of lifetime deals with athletes for shoes or whatnot,” Woodhouse said. “But Todd’s idea was, instead of just giving them a lifetime deal, let’s bring him into the boardroom. This is a true executive role of immense added value, not just a consulting role.”

Krinsky added of O’Neal: “He’s got a tremendous passion for Reebok — it’s where he signed when he was 19. And now it comes full circle. It didn’t take long for us to to say, after a few conversations, ‘You’ve got all of the skills to lead this for us.’”

In this newly created role, O’Neal will oversee the brand’s basketball category and work to cultivate partnerships with athletes and organizations. Krinsky said he will work on product creation, marketing, will participate in events, oversee player recruitment and help negotiate deals on behalf of the brand.

“He’ll be involved in every area,” Krinsky said. “I clearly have a team running the business here in Boston, but we’ll be taking the direction from Shaquille. This is not a figurehead role. He has a lot of ideas and some things he has strong conviction on. But on other things, he really just wants to listen and learn, and ideate with us on how we should do things. This is a major opportunity for a brand that has rich, rich heritage [in basketball] to get back into one of the biggest global sports in the world.”

Currently, Krinsky said, basketball represents under 10 percent of Reebok’s total sales, and it’s all centered around retro styles. “We have no performance basketball business now.” But with O’Neal taking over the reins, Reebok expects that number to jump to between 20 percent and 25 percent over the next few years.

“When we were in basketball, we had very big market share,” he continued. “So there’s no reason we can’t get back to that. I think we did it in a very disruptive way back then with some very irreverent personalities and some very unique products. And we’re looking to take that same path but modernize it with a new playbook. This is a move to get into performance basketball in a significant way.”

Right out of the gate, they said, O’Neal will concentrate on player recruitment. He has already identified some potential partnerships and is making calls to athletes. “It happens at great speed when he’s involved,” Krinsky said, “because you can imagine if a family gets a call from Shaquille O’Neal, they’re answering it pretty quickly.”

His initial focus will range from professional athletes to collegiate and high school prospects, both male and female, Woodhouse said, but the primary thrust will be on “up-and-comers. Someone changing from another brand to our brand doesn’t really excite us. We’re looking for someone who can grow up with our brand. Today, it’s almost more important what kids are wearing in the tunnel as opposed to on the court and that’s also very important to us. Can they also be brand ambassadors?”

In his new role, Iverson also will help drive player recruitment, and work on grassroots and community-based initiatives and athlete activations such as the Iverson Classic, the company said.

Beyond basketball, Krinsky said Reebok sees opportunities in other areas as well.

“We’ve got a very big classics/heritage business — this is the cornerstone of our brand — it does really well in every market around the world. And it’s continuing to grow,” he said. “And then our second biggest category is training. We’ve always had great history, trading back even to the Eighties, to today.”

But beyond throwback product, the brand plans to double down on other sports such as running, Krinsky said. “We’re getting ready to launch a big running innovation next year. And then tennis and global soccer are coming as well. But we’re doing it methodically, we’re not jumping into every sport right away.”

He characterized it as “a renaissance period for Reebok,” which had exited many of these sports over the past few years and is poised to reenter them.

Woodhouse also pointed to the opportunities in the comfort arena. “With a rapidly aging population, there’s a movement to comfort,” he said, pointing to popular brands such as Hoka. Reebok’s recently introduced Walk DMX shoe is “blowing out,” and the brand will continue to expand on that success with other comfortable shoes for active people.

“If you’re going to do a tough workout, we’ve got a shoe for you; if you’re going to be a top basketball player, we have a shoe. And if you’re going to run a fast marathon or 10k, we have a shoe for you as well,” he said. “But if you want to walk two miles in the morning and you don’t want to wear a $190 performance shoe, we’ve got a great shoe for under $100.”

Apparel, which represents around one-third of sales, is seen as another growth area. “One of the unlocks for us with apparel, was getting back into the field of play and having more athletes on Saturdays and Sundays wearing our product, because we haven’t had a lot of exposure to our apparel outside of just the fitness enthusiast or instructors,” Krinsky said. “So now I think you’re going to start seeing more athletes and influencers wearing our apparel. We’ve kind of gone through a little bit of a branding change over the last few years — a bigger, bolder expression of Reebok.”

He pointed to Justin Fields, quarterback for the Chicago Bears, who has been wearing a lot of Reebok product in and out of the stadium as an example. “So the U.S. consumer is going to start seeing the apparel more on athletes. That’s a key move for us as well.”

But juggling sport and lifestyle product is not an easy task. Under Armour is pivoting away from a strict focus on sport to shine more of a light on fashion while Puma is looking to increase its penetration in sport while also introducing product from Rihanna and other celebrities.

Woodhouse admitted that doing both can be tricky, but he believes Reebok can succeed.

“I think maybe only Nike would be ahead of us as far as permission to combine sport, fashion and lifestyle because of our history,” Woodhouse said.

At Reebok, the brand has a deal with New Guards Group, the Milan-based division of Farfetch Ltd., that is its core operator in Europe and with which it is collaborating on luxury products. “We just launched our first product with them, a $200 luxury version of our Club C shoe, and it sold out in minutes on Farfetch,” Krinsky said. “We’re working on a bunch of new collaborations we’re about to announce and we’re working with them on a running innovation that will launch maybe on a runway, but it will be for runners. So we don’t really see separating sport from fashion completely. We think it’s all one expression for the brand.”

Blending sport and lifestyle will also fuel Reebok’s ability to hit its $10 billion sales goal. Woodhouse said the brand will continue to work with its wholesale partners internationally to build the business. The brand has signed deals with Foot Locker and Macy’s in the U.S. as well as JD Group, a global multichannel retailer that also owns Finish Line, DTLR and others.

“We’ve always been a fan of wholesale and retail. We love direct-to-consumer too but we feel all methods of distribution are the right way to go for our brands and our consumer,” Woodhouse said. “And our wholesale partners are helping us win in a big way globally.”

The exhibit will run from Nov. 3 to 22 at Iron 23 in the heart of the Flatiron District.

With more than 400 patents and nearly two centuries of luxury horology design, the Jaeger-LeCoultre legacy certainly speaks for itself. One of the brand’s most notable creations is the famed “swiveling case,” a patented design that has become a signature of the Reverso watch collection.

To help celebrate the famed timepiece in 2021, to mark the 90th anniversary of the Reverso, the maison created a traveling, immersive exhibition aptly titled “Reverso Stories,” which explores the creative and cultural universe of the watch through four themes: Story of an Icon, Style and Design, Innovation, and Craftsmanship.

The exhibition, which was inaugurated in Shanghai, has already made stops in Singapore, Seoul, Paris and London. In November, to mark its North American debut, the exhibition will be making a stop in Manhattan.

Located at Iron 23, the exhibition will be open to the public, free of charge and will run from Nov. 3 to 22, arriving just ahead of the grand opening of Jaeger-LeCoultre’s new flagship on Madison Avenue.

The four “Stories” are supplemented by an immersive digital art installation by Korean artist Yiyun Kang; a space devoted to the video series “In the Making,” which reveals the 180 crafts practiced in the watch’s production; a room dedicated to Japanese artist Hokusai, whose works have been reproduced on Reverso timepieces; the 1931 Café serving an Art Deco-inspired menu of crafted pastries designed and led by award-winning French pastry chef Nina Metayer, a collaboration under the “Made of Makers” program; and hands-on watchmaking workshops within the Atelier d’Antoine.

At the heart of the exhibition, Kang’s multimedia installation titled “Origin” will be presented on a huge three-dimensional screen that has been purpose-built for installation in public spaces. The installation is a tribute to the ubiquity of the Golden Ratio, which builds a parallel between the symmetry in nature and the geometry of Art Deco design, which has been the guiding spirit of the Reverso since 1931.

To further enrich the experience, visitors are able to enroll in Atelier d’Antoine, a series of educational workshops that offer hands-on watchmaking experience that focuses on the Reverso and will be by reservation only.

In addition to its historic timepieces, the exhibit will include the 2023 Reverso models that were launched at Watches and Wonders in Geneva earlier this year, and two new Reverso Tribute Enamel models that will be launched during the New York exhibit.

“The exhibition will allow visitors to discover more than 30 historical Reverso from our manufacture’s Heritage Gallery, as well as new models like the Reverso Tribute Chronograph or the Reverso One Duetto jewelry. We will also reveal new Reverso tribute enamel pieces celebrating the work of Japanese artist Hokusai and the enameling expertise of our manufacture, where over 180 crafts inspire our artisans for over 190 years.” said Catherine Rénier, chief executive officer of Jaeger-LeCoultre.

“The exhibition will continue to travel around the world to carry the creativity and rich history of the Reverso.” Rénier told WWD.

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