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By June 18, 2020 Read More →

AGENDA WEST BUSINESS NEWS: Suppliers beware of the cold winds of recession as companies default, propose CVAs and plead Covid-19 poverty rather than pay up (latest list here)

Suppliers beware of the cold winds of recession as companies default, propose CVAs and plead Covid-19 poverty rather than pay up (latest list here)

When one of the largest stationers, paper and envelope suppliers in the UK went bust in May, suppliers were left with £3m in unpaid invoices. Spicers Office Team’s management said the collapse was caused by the Covid-19 crisis bringing much of their business to a halt.

“That’s not entirely true,” said Ian Carrotte of ICSM, “the Covid-19 excuse is being trotted out like Brexit uncertainties were last year. Spicers had massive debts and as soon as they hit March 23’s lock down they couldn’t see a way forward. They will be followed by many more like them as furloughing ends and suppliers have to face up to the cold winds of recession this year and be on guard.”

He said there were a raft of companies that suppliers must be wary of in all industries and it was essential not to give what he called ‘free loans in the form of unpaid supplies and services’ to customers who then go bust.

“If you get a big order from a company you’ve not had before then check them out with ICSM. We hear of who is in trouble and not paying their bills from our members. From hotels to printing companies the word gets out – so don’t get caught,” he said.

The hotel chain Suite Hospitality has entered administration

There is considerable concern over a number of firms with problems this week. The hotel chain Suite Hospitality has entered administration while Poundstretcher is looking to shut half its 500 plus stores. Ian Carrotte said any firm making major restructuring plans must be kept on eye on. Another firm to go bus this week is Wicksteed park in Kettering that opened as a theme and pleasure park 99 years ago.

Ian Carrotte said that construction giant Mace’s report this month paints a gloomy picture – but one that suppliers need to take note of. It reports that there will be ‘a return to cut-throat bidding and cashflow drying up as some of the issues facing the industry in the coming months.’ Having already laid off hundreds of workers during the crisis the Mace Group headquartered in London, employs approximately 5,000 people in the UK and abroad with a turnover in the billions.

LATEST NEWS

No saints in the High Street

Fashion chain All Saints have proposed a Company Voluntary Arrangement (CVA) with is suppliers in a bid to stay in business with a deadline for agreement in July. Top of their list are rent reductions from landlords for their stores across the UK – with 17 in London alone. The CVA is being handled by Alvarez & Marsal – something its 3,000 staff and many suppliers will take a great interest in.

Unhealthy news from health store

Holland and Barratt have seen a £25m loss in the last financial year despite an upsurge in business during the Covid-19 crisis as they were one of the essential retailers allowed to remain open. The Retail Gazette reported at Christmas: “Holland & Barrett lenders have reportedly urged the retailer’s Russian billionaire owner Mikhail Fridman to inject new funds as tough retail conditions start to bite. According to The Sunday Telegraph, Fridman is under pressure to stabalise Holland & Barrett’s balance sheet after chief executive Tony Buffin last month warned on a sharp slowdown across the health and wellbeing retailer’s 767 stores. City sources speaking to the newspaper also said Holland & Barrett’s earnings were £104 million in the year to September, which did not meet expectations.”

Shopping centres owner’s £121 loss

London Stock Exchange listed NewRiver REIT who owns 33 shopping centres, 25 retail warehouses, 14 high street units and over 700 public houses has revealed a £37m loss last year with a post tax loss of £121 announced this week. The news of Intu also struggling to stay afloat reveals the problems of the firms that own retail centres which have been for the most part shut for the last three months.

Fashion firm swoops to buy rival’s online business

The internet based fashion house BooHoo has bought the online brands of Oasis and Warehouse out of administration for £5.25m after announcing its own online sales rose 45% during the lock down. Manchester-based Boohoo also splashed the cash and bought brands MissPap, Karen Millen and Coast earlier this year. Very few of the Oasis and Warehouse’s 1,800 workers will be taken on as the chain has already closed its 90 shops and 437 concessions in department stores.

Tipper firm tips up

Haulier P J Brown (Construction) has gone into administration blaming the end on the effects of the Covid-19 pandemic. Based in Crawley the tipper truck and haulier founded in 1980 had 79 vehicles and have appointed joint administrators Nicholas Cusack and David Perkins of Parker Andrews and Andrew Andronikou of Quantuma. However PJ Brown (Civil Engineering) continues to trade.

Long Tall Sally cut short

The fashion company for taller women Long Tall Sally has collapsed into administration. The first store was opened in 1976 on Chiltern Street in the West End of London. By 2014 there were 10 stores in UK, five in the US, seven in Canada, and five in Germany.  On their website they have put: “We’re as sad as you are about closing Long Tall Sally but we’re here to help, so if you’ve got questions, we’ve got answers. You’ll find most of them below, along with contact details for our Customer Care team. Thank you for all your support.” They have also given this email address for suppliers who have not been paid: finance@longtallsally.co.uk

Pre-pack for Oak Furnitureland firm

The once mighty Oak Furnitureland retailer has been bought via a Deloitte managed pre-pack deal by global investment management firm, Davidson Kempner Capital Management for an undisclosed sum. Reports say that Alex Fisher, the companies’ current CEO will stay in post and the 1,491 employees will also be retained in the 100 plus chain of stores. Based in Swindon the new owners say they will negotiate with landlords and suppliers over unpaid bills. 

Former owner linked to bust bakery cafe chain Le Pain Quotiden

French-themed coffee and bread chain Le Pain Quotidien has been bought out of administration by BrunchCo21, linked to its former owner, Cobepa. Some 200 staff were canned from its 26 outlets when it crashed this spring. The new owners hope to negotiate with the landlords of the remaining 16 properties in order to re-float the business although there is no word of what happens to unpaid suppliers.

Poundstretcher

The high street retailer has remained largely open throughout the shut down as the nationwide chain sells food and medicines and was thus one of the exempted businesses. Despite this the company is in trouble and looking to launch a company voluntary arrangement  with its creditors. In particular is wants its landlords to cut rents to 330 of its 450 stores.

Travelodge

A group of landlords have demanded the hotel chain Travelodge reveal details of its planned CVA ahead of a creditors meeting on June 19. The CVA would see a big cut in rents as well as shareholders injecting £240m into the business to ensure no hotels are closed.

The Restaurant Group

Another firm in the hospitality industry seeking a CVA is The Restaurant Group (TRG). If the revised finances and rents can be agree the group who own Frankie & Benny’s could close 125 outlets of their 226 sites. Reports say their Chiquito, Coast to Coast and Garfunkel’s brands will also be also impacted, but its Wagamama restaurants are safe.

Warning from ICSM Credit’s Ian Carrotte

When fashion brand Autonomy went into administration in March it owed suppliers £940,000 and was ordering stock right up tothe last minute. No business is safe from insolvency. It’s a warning to all suppliers who go on blindly suppling goods and services which will never be paid for. There are a lot of companies in all industries that are struggling to survive but as long as they are paying suppliers, or have a repayment plan in place or another arrangement that guarantees payment – then fine. But if a client airily dismisses concerns over non-payment then the rule is DO NOT SUPPLY THEM.

About ICSM Credit

ICSM Credit has more than four decades of experience as a credit intelligence group whose members gain inside information about firms in trouble allowing them to avoid bad debts and rogue traders. To join costs less than a tank of fuel – while at the moment there’s a special free temporary membership offer during the Covid-19 crisis which gives access to free legal letters. ICSM also has an effective debt collecting service which has a global reach – ask for details from Paul.

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com

For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk

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