Businesses in financial trouble

[Arthur]

Not long left for House of Fraser.

 

www.thisismoney.co.uk/money/news/article-6027025/House-Fraser-left-brink-rescue-talks-tycoon-Mike-Ashley-deteriorate.html

 

Hopes of a rescue for department store House of Fraser received a fresh blow last night as it emerged that relations with tycoon Mike Ashley – seen as a possible white knight – had badly deteriorated.

 

The ailing department store, led by chairman Frank Slevin, has been in desperate talks to save the business after a £70 million lifeline from a Chinese conglomerate was pulled on Wednesday.

 

Sources said the company could be forced to call in administrators 'within weeks' if new funds fail to arrive.

 

[...]

 

A House of Fraser spokesman said it was still in discussions with 'multiple parties' for funding.

 

But it now looks likely that Ashley will step back and wait to see how events develop athe firm, which has a debt pile of about £400 million, battles for a secure future. Buyers may be calculating they could acquire parts of the firm more cheaply if it were in administration.

 

House of Fraser has also clashed with major landlords over restructuring plans, which involve slashing its rent bills and closing half its 59 stores.

 

A crucial legal hearing set for nine days' time could still scupper the plan – known as a Company Voluntary Arrangement.

 

The retailer also needs enough spare cash to pay for new stock and a quarterly rent bill that falls due next month.

 

The pension fund is in decent shape provided the company continues trading and keeps its promises to top it up.

 

But pension experts said a black hole of up to £180 million may open if the company goes to the wall. It would then be managed by the Pension Protection Fund or an insurance company and pensions could be reduced.

 

Debt rating agency Standard & Poor's said this weekend there is 'an elevated risk' the company will face a cash crunch or go insolvent in the short term 'unless it is able to secure additional sources of cash in the coming months'.

[Blue_Cookeh]

Hardly surprising... they were far too expensive.

[SpuffMonkey]

And Debenhams following shortly, I'd guess

[TTG_Alice]

I'm not surprised. Online shopping has changed the way consumers make purchases. You can browse various items which usually has more variety of sizes than in stores. Feel sorry for people working in the shops and losing their jobs

[mikeprice]

there does seem to be a problem where normal shops have to pay large business rates but massive internation companies like Amazon etc don't have to pay anything like that and can hide their profits but various means

 

That system worked fine when I were a kid but probably needs to be changed drastically to suit today's ways of shopping

[LeMarchand]

there does seem to be a problem where normal shops have to pay large business rates but massive internation companies like Amazon etc don't have to pay anything like that and can hide their profits but various means

 

Yep: Amazon profits UP, tax bill DOWN. https://www.bbc.co.uk/news/business-45053528

[6Foot2]

Link: House of Fraser bought by Mike Ashley's Sports Direct for £90m [The Guardian]

 

Sports Direct, the sportswear chain controlled by Mike Ashley, has swooped on House of Fraser in a £90m rescue deal that includes all of its stores.

 

In a statement to the stock exchange, Sports Direct confirmed it had bought the retailer for £90m in cash, shortly after it fell into administration this morning.

 

“The group has acquired all of the UK stores of House of Fraser, the House of Fraser brand and all of the stock in the business,” it said.

 

More details of what this means for the group’s 17,000 staff are expected to follow...

[Arthur]

Homebase rescued from collapse but 1,500 jobs to go

 

Homebase is to cut 1,500 jobs as part of a rescue deal that will save the DIY chain from bankruptcy and give it breathing space to recover from the disastrous stewardship of its previous owners.

 

Creditors voted in favour of a company voluntary arrangement (CVA), that will lead to the , with landlords of a further 70 stores agreeing to accept rent cuts of up to 90%.

 

Approval for the deal at Friday’s crunch meeting means Homebase will stave off administration but 1,500 of its 11,000-member workforce are likely to be made redundant.

 

Surely it would make more sense to reduce the rents of these struggling retailers before they have to resort to CVAs or administration?

[XiJ]

Homebase rescued from collapse but 1,500 jobs to go

 

 

 

Surely it would make more sense to reduce the rents of these struggling retailers before they have to resort to CVAs or administration?

 

Not if you can get the same sort of rent from another company.

[mikeprice]

Hmm

 

OK - can I reduce my rent by 90%

 

actually I don't pay rent - but the principal still applies

if they can afford to reduce the rent by 90% I assume that they were ripping them off until now

 

and if this is true then it is no wonder on-line retailers are taking over as 'real' shops have no chance

[crispybits]

You'll probably find the 90% mostly refers to rent arrears and/or a short term deal while the company gets stabilised again - and it depends how much money they already owe the landlords - what's that old saying? "You owe the bank £100 - you have a problem - you owe the bank a million pounds - the bank has a problem"...

[DJ-1701]

Maplin

Edited September 13, 2018 by DJ-1701

[DJ-1701]

Guess who just bought Maplin? Dragons' Den celebrity biz guy Peter Jones - The Register

[Arthur]

Evans Cycles set to become latest victim of High Street crisis?

 

There are fears that Evans Cycles, the UK’s largest specialist bricks-and-mortar cycling retailer, could become the latest victim of the crisis gripping the country’s High Street retail sector.

 

Sky News reports that ECI Partners, the private equity owners of the business founded in south London as FW Evans in 1921, are inviting bids for the business by the end of next week.

 

Companies approached by PricewaterhouseCoopers, appointed earlier this month by ECI Partners to explore options for the business, include other private equity firms and retailers, as well as retail turnaround specialists.

 

According to Sky News, it is unclear whether a potential buyer of the business, which trades from around 60 stores having expanded steadily outside its London and the south east heartland in recent years, might look to secure a company voluntary arrangement to close underperforming stores.

 

In common with many other businesses that trade principally from physical stores, Evans Cycles has been hit by competition from both specialist online-only retailers, as well as general internet-based retailers and, in particular, Amazon.

 

Price competition has squeezed margins, and at the same time the High Street has been hit by rising overheads, with a number of household names including House of Fraser and Mothercare running into major financial difficulties in recent months.

 

I wonder if Mike Ashley will buy them?

[unixman_again]

Interesting about Evans Cycles - we've just been offered a ride to work scheme with them. I don't know why they chose Evans; there isn't a shop within cooee of the college but there is a Hawks Cycles nearby.

[mikeprice]

Sorry to get all political - but something needs to be done to re-balance the taxes (local and national) between real 'bricks and mortar' shops and online businesses

 

Some old fashioned businesses have dealt with the challenge really badly (e.g. ignoring it) and some have dealt with it as well as they can - but it still seems that online businesses don't 'pay their way' compared to the demands on 'bricks and mortar' ones

 

Of course - if the big ones like Amazon actually paid what they are supposed to - as opposed to 'legally' fiddling everything around to reduce the tax paid to nearly zero it would help but this is really just a symptom of a system that needs fixing

 

I've no idea - or deep understanding of the taxation system and how it all links together - so I have no clue how to fix it.

But something needs to be done

[mavhc]

Sorry to get all political - but something needs to be done to re-balance the taxes (local and national) between real 'bricks and mortar' shops and online businesses

 

Some old fashioned businesses have dealt with the challenge really badly (e.g. ignoring it) and some have dealt with it as well as they can - but it still seems that online businesses don't 'pay their way' compared to the demands on 'bricks and mortar' ones

 

Of course - if the big ones like Amazon actually paid what they are supposed to - as opposed to 'legally' fiddling everything around to reduce the tax paid to nearly zero it would help but this is really just a symptom of a system that needs fixing

 

I've no idea - or deep understanding of the taxation system and how it all links together - so I have no clue how to fix it.

But something needs to be done

 

Nothing to do with online retailers, Maplin was taken over by finance people, who forced it to die, whether that was on purpose as some kind of asset stripping/scam, or because they're useless, or because it was just a big bet and they weren't risking their own money, so they didn't care, is the question

[unixman_again]

A story of M, a failed retailer: We'll give you a clue – it rhymes with Charlie Chaplin

[Arthur]

Patisserie Valerie warns it is on the brink of collapse

 

The owner of Patisserie Valerie has said the cafe chain needs "an immediate injection of capital" to continue trading in its current form.

 

The stark statement to investors comes after the firm uncovered "significant, and potentially fraudulent, accounting irregularities".

 

It also belatedly discovered HMRC filed a winding-up petition against one of its principal subsidiaries in September and is seeking £1.14m in taxes.

 

The firm has more than 2,500 staff.

 

The company announced earlier this week that finance director Chris Marsh had been suspended.

 

Staff told the BBC that they have not been told anything by the company at all, and even the store managers are in the dark.

 

"I suppose it's because there's nothing wrong, but will we get paid our next month's salary in three weeks' time?" said an employee, who asked not to be named.

 

A long-term employee, who has worked for the company under both its current owner Risk Capital Partners and the previous owners, the Scalzo family, told the BBC that she only found out about Patisserie Valerie's problems through media coverage.

 

"No one has told us anything. I asked my manager and they don't know anything either," she said.

[Arthur]

Overpriced confectionery shop, WH Smith, is also closing stores.

 

WH Smith to start closing stores as it struggles on the high street

 

Retailer WH Smith has launched an overhaul of its under-pressure high street business as it revealed sliding sales and profits at the division.

 

The group said it has kicked off a detailed review of the high street business that will see it close six stores and wind down trials such as its online card arm Cardmarket and convenience store chain WH Smith Local.

 

The company plans to close the 20 Cardmarket stores as their leases come to an end, with affected staff transferring to nearby WH Smith stores.

 

[FishCustard]

Overpriced confectionery shop, WH Smith, is also closing stores.

 

WH Smith to start closing stores as it struggles on the high street

 

 

As long as they don't shut the ones in airports. It's not a proper flight without some cheap-o WHSmith sweets and a weird magazine.

[Dos_Box]

That's what they get for not putting Fortean Times in the same place each month! Edited October 12, 2018 by Dos_Box

[LeMarchand]

Thats what they get for not putting Fortean Times in the same place each month!

 

They put it in the same place, it's just that the strange attractors that pool around it cause shifts in time/space.

[FishCustard]

Thats what they get for not putting Fortean Times in the same place each month!

 

THANK YOU! Someone else who understands!

[LeMarchand]

Got distracted by the cheap joke, but back to WHS...

 

My first "deliberate choice" job was at WHS (I got the job because I had a Spectrum). I recently found my training folder and realised that the amount of general knowledge I have is much more down to their training program than my schooling! I did wonder how I "knew stuff" about classical music and art and assumed it was because I went to a "posh" school. That said, I've rarely been in WHS since I left - and then only for the odd greetings card or bit of stationery that I needed immediately. Apart from stationery, all the stuff they used to major on is available online and/or digitally for far less than they can afford to sell it. I'm amazed that they've lasted this long