Harry Mottram reports
First it was Jamie Oliver’s Italian Restaurants that hit the rocks last month leaving many in the print industry tens of thousands of pounds out of pocket. Then Maplins and Toys R Us called in the receivers as debts mounted up and now pizza chain Prezzo has gone the same way. It all adds up to a mounting crisis for retailers and restaurants as Brits put the squeeze on spending as financial concerns increase. Inflation is up, unemployment is up, the pound is down, business rates continue to bite and overall there’s a feeling the economy is not in the best of shape.
Prezzo is a big hit for the print industry with 94 restaurants spending big bucks on menus, leaflets, posters and banners each year. The firm owned by private equity firm TPG Capital, employs about 4,500 people and includes the TexMex Chimichanga chain. It’s taken the route of a company voluntary arrangement (CVA) in order to stop the rot and restructure itself rather than full administration suggesting some restaurants may survive long term but the jury is out on that option until the accountants have gone through the books to see what can be salvaged. One thing is likely and that is unsecured creditors such as printers may not get paid.
So what is going on and is the collapse of so many well-known names set to continue? According to Wired Maplin’s demise has been triggered by two things: a slow-down in spending and Brexit. They quote Maplin’s CEO Graham Harris as saying: “The business has worked hard over recent months to mitigate a combination of impacts from sterling devaluation post Brexit, a weak consumer environment and the withdrawal of credit insurance.”
Online shopping is another factor for high street names and most commentators say Amazon and such like have been the cause of the downfall of Toys R Us who some have suggested became stuck in the late 1980s with their store layout. Parents have less time to shop it is generally agreed meaning buying toys online is a simple way to save precious time at the weekend.
Prezzo and Jamie Oliver’s crash are also being pinned on a drop in consumer spending but perhaps there is another reason and that is simply too much competition. In short too many companies all selling pizza. That and the eye-watering levels of debt they were servicing. Whatever the reason these are blows for the print industry as more firms shut up shop and stop ordering print and for the 10,000 workers affected by these closures, no more pay cheques.
And it is not just these big names that have closed their doors this year. The menswear group Berwin & Berwin went into administration, along with Cloggs footwear, Warren Evans furniture retailers, Justice Jewellers, the Juice Corporation owned by Princess Diana’s wedding dress designer Elizabeth Emmanuel, retailers Joe Bloggs, East, Nice ‘N’ Naughty Leisurewear and the ice-cream people Joe Delucci’s Gelato. Talking of ice it has been a pretty frosty start to the year with the Beast from the East also causing a slow -down in spending which is of no comfort for anyone.
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