Red lights should be flashing in accounts departments when a major client publicly announces they are considering selling up amid a pandemic.
Jigsaw not a puzzle
That’s the situation with the retailer Jigsaw reported by Drapers this week with the owner David Ross apparently asking professional advice over rent arrears and a sale of the business. The trade journal’s Grace Whelan reported: “KPMG has been hired to assist in talks with landlords, while Cavendish Corporate Finance has been brought in to gauge interest from prospective buyers or secure a new external investor.”
Ian Carrotte said as soon as a firm calls in advisers suppliers need to be on their guard. He said: “A pattern has emerged in retailing in the last three months with firms who have historic debt which they can no longer service calling in advisers who invariably tell them to sell, restructure seek a CVA or simply call in the administrators. That’s bad news for creditors. From the window cleaners to the sign makers and from the printer to the shop fitter – they will be the last people whose livelihood the advisers will have in mind.”
Restaurants off the menu
Another firm to be wary of – this time in the hospitality industry – is Pizza Express said Ian Carrotte. “With 75 restaurants closing and maybe 1,000 jobs going it is clear the company is in trouble,” he said. “ICSM Credit warns its members of problems with companies they supply to. It doesn’t take a genius to work out that if Pizza Express are planning on a CVA then nobody should be granting them more credit as they have millions in historic debt which they cannot service.”
With 620 restaurants here and abroad and thousands of staff the Italian themed chain got itself into more than one billion pounds of debt which it has no chance of servicing under current financial structures. They are not alone, with Wagamama closing two of their London restaurants, Hugh Fearnley-Whittingstall’s River Cottage Kitchen in Winchester is closing along with Wilks Restaurant in Bristol.
Retailers and their fitters
Drapers have reported that footwear retailer Oliver Sweeney has gone bust entering into administration and closing all their shops. Isabella Fish for the trade magazine said: “Footwear retailer Oliver Sweeney’s bricks-and-mortar business has fallen into administration as a result of Covid-19, resulting in the closure of all five of its stores. Administrators were appointed to Oliver Sweeney’s retail subsidiary Oliver Sweeney Trading Limited earlier this week.
“The company’s five stores based in London’s Mayfair, Leadenhall Market and Covent Garden, as well as shops in Leeds and Manchester, will now all remain permanently closed. They made up less than half of sales. The group’s online and wholesale business were not part of the administration and will continue to operate.”
The shopfitting firm Cardinal based in Yorkshire went into administration in mid-July with most of the 170 staff made redundant. It’s another casualty of the retail slump and shopfitting is an area many sign-makers and interior designers are involved in signalling more problems for allied industries.
Ian Carrotte said: “Traditionally shopfitting has been tied to sign making and some printers who cover both industries as the same skills are required along with the designers who create the concepts for retailing interiors. It also goes for those firms who also specialise in office and hospitality refits. In short anyone involved or linked to retailing should be subject to scrutiny when it comes to giving credit.”
Finally Soletrader has hit the buffers. Established as a shoe retailer back in the early 1960s the company had a creditors’ voluntary liquidation. Retail Research reported: “Its assets including stock and brand names Sole and Soletrader were purchased by its owner, the Twinmar Group, and are now invested in a new subsidiary, Twinmar London. Most of the company’s stores opened for trading in July, but eight shops have been closed. Soletrader’s website is a separate entity and is unaffected by the liquidation.”
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.firstname.lastname@example.org 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.
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For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk