Storm clouds gather for both firms
Two of the nation’s under pressure business sectors have been showing signs of economic stress in the last two years as shoppers forsake the high street and the airline market becomes saturated.
Flybe have been reported by Sky News to be in trouble although the firm has denied reports of problems. Last year the troubled low-cost airline was bought by a consortium including Virgin Atlantic and the Stobart Group to save it from collapse for just £2.2m. The consortium has ploughed in tens of millions of pounds to turn it around but it seems Flybe remains in trouble.
Meanwhile on the high street the latest department store chain to hit the buffers is Beales with its 22 stores and 1,000 employees. The firm has implied it may enter administration in order to find a buyer or buyers and to in effect off load debts, loss making stores and costs possibly through a pre-pack. Founded in 1881 it is the latest big store to find the combination of business rates, rents and the public’s fondness for internet shopping to stifle trade.
The concern for suppliers and creditors is the amount of unpaid invoices Beales could dump in administration. Anything from printers, sign-makers, hauliers, clothing and accessory suppliers and shop fitters could end up out of pocket with some even forced out of business.
Ian Carrotte of ICSM Credit said members of the credit intelligence group had raised concerns over Beales in the last few weeks. He said: “It’s the sheer number of suppliers who could be hit that is the worry. Just because Beales have traded since the 18th century doesn’t mean they are infallible. Tight credit control is the key and if a big name customer demands payment of more than 30 days after always paying regularly then you must be suspicious and insist on keeping your terms of credit.”
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For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk