MFI,Woolworths who is next ?

[Beach Hut]

Also would of thought the travel Industry will take a battering

Not necessarily so as they can opt out of hotels as we found out recently. Booked 2 weeks to Egypt next Summer and two weeks later told they had discontinued that hotel and offered an alternative albeit £400 cheaper.

 

[Beach Hut]

Still think WH Smith,s will find it hard going.

Smiths has struggled for some time and may well go to the wall like Woollies

 

[rauper]

Zavvi is in administration now so Branson made the right decision to sell.

Do you have a source for this? I know they were taking steps to ringfence money, protect customers etc IF they went into administration... but I haven't seen an announcement saying they actually are?

 

[jakarta]

Any or all small companies that have their credit facilities slashed or withdrawn by our wonderful high street banks so they cannot keep the everyday cash flow sorted.

Personally would love to see the current crop of greedy incompetent banks go under replaced with a new generation of rational money lenders who understand what small businesses need - dream on I suppose.....

Anyone care to guess what overdraft terms my business was offered (and turned down)?

 

[Lord Bracknell]

Lord B,alittle surprised to se you name Matalan.

Not me. The Guardian journalist.

But maybe he's more confident of them surviving than the others:-

"It was an extravagant launch party with all the trimmings. Among the guests eyeing up the freebies and glugging glasses of free white wine at the boutique Haymarket hotel in central London last Thursday were TV makeover star Laurence Llewelyn-Bowen, designer Jeff Banks, self-styled domestic goddess Anthea Turner and camp style gurus Colin McAllister and Justin Ryan.

"The gang of television presenters closely linked to Britain's obsession with home improvement and shopping had all been commissioned by high street chain Matalan - at some expense - to design items for Influence, its new range of chintzy home furnishings.

"Desperate times perhaps call for tried and tested measures. Matalan, a stock-market darling in the boom years which crashed and is now a private firm, is praying that customers will splash out on its affordable range of throws, rugs and place mats sprinkled with celeb dust. After all, it has worked before."

 

[Tom Bombadil]

I disagree - profitable business do not need lines of credit. Businesses might need loans to get going, but if you need debt to maintain a business which gean in 1909 then you've got a business in trouble. Woolworths downfall was its inability to get cheap stock from its stock rooms and on to its shelves to compete with Tescos who have absolutely no problem with stock distribution.

The first part if this is completely wrong, many businesses will have debt and still be profitable. It depends how mush cash the owners take out and how they have expanded and or restructured over the years.
What matters is cash flow and this is why the credit crunch is flushing out the weaker players - those whose business model has ceased to be profitable and those with a high gearing ratio.

WH smith is vulnerable, but the failure of Woolies should help it. In many small towns they were it's only compettion and come January they may see a lot of Woolies trade transfer.

 

[Seasider78]

Do you have a source for this? I know they were taking steps to ringfence money, protect customers etc IF they went into administration... but I haven't seen an announcement saying they actually are?

Supply dried up when EUK went under and there is no way back for them rumoured to be announcing administration on Monday.

Re: Woolworths the straw that broke the camels back was the withdrawel of credit insurance which resulted in suppliers demanding cash much earlier. EUK got dragged into it as they were part of the Woolworths group.

January is going to be a very difficult time and I think we will see other names go to the wall. Only the interner suppliers are bucking the trend

 

[Herr Tubthumper]

This is the biggest load of twaddle I have ever read about this myth of Weatherspoons buying short dated stock, written by somebody who does not know 1 iota of what they are talking about.

I helped Tim Martin when he had his very first bar, as my company were his stocktakers which was Martins in North London which he owned in partnership with an old uni pal Andrew Marler. They split up Tim kept Martins and Andrew Marler bought a bar at Highgate, Marlers. The first of the Weatherspoons concept was pub in Stoke Newington, the name alludes me at the moment. Being a lawyer Tim realised that the majority of pub owners and councils refused licences on the grounds of there not being a need which was an illegal objection so he exploited it. He then set about setting up the 'superpubs' using old stores like Courts,Banks etc. When they aquire a premises they set aside £1m for set up and developement and tell the shareholders that they will not get a return on their investment for at leaast 10 years. In a lot of cases like Littlehampton the council give him a rent free long term usually 99 years lease on large premises if they want one of his pubs in their town.

As regards stock they DO NOT buy short dated stock but they do buy in bulk. I was in his office 1 day when a Scweppes rep came in and Tim told him I will pay you 35p a dozen for mixers either come in and we will make arrangements for the delivery or shut the door as you leave. The rep agreed and he arranged for 24 cases of tonic ( 1/2 pallet) to be delivered to every pub that week followed by 24 cases of each mixer and fruit juice in successive weeks. He did the same with Diamond White Cider on one promotion , he had 100 doz delivered to every unit for which he paid 25p a bottle and did the promotion at £1 a bottle. Using this philosophy on purchasing everybody is a winner because the production and distribution costs are reduced whether it be beer , minerals or whatever.

My own personal view, and it is not backed by anything other than a hunch, that when he owned the company, unlike now where he only owns 40% of the shares, he was going to build the company up and either sell it off to M & B or similar or he was going for the big bankruptcy to lose his debts like Techenguiz has done with Yates.

.

The booze might not be short dated but judging by the characters who frequent the one on George St the punters certainly are.

 

[tedebear]

The first part if this is completely wrong, many businesses will have debt and still be profitable. It depends how mush cash the owners take out and how they have expanded and or restructured over the years.

I don't think it is that wrong. Why have we such a need for/reliance on debt? Cash flow smoothing is a relatively recent invention, if you haven't the cash to pay the bills then there is something fundamentally wrong. (and I'm specifically referring to retail here as we are talking about Woolies)

Indeed many businesses do have debt and are profitable, but I'm saying it isn't as mandatory as people think. As soon as things get tough, the debt will cripple you.

 

[Herr Tubthumper]

I don't think it is that wrong. Why have we such a need for/reliance on debt? Cash flow smoothing is a relatively recent invention, if you haven't the cash to pay the bills then there is something fundamentally wrong. (and I'm specifically referring to retail here as we are talking about Woolies)

Indeed many businesses do have debt and are profitable, but I'm saying it isn't as mandatory as people think. As soon as things get tough, the debt will cripple you.

Most self-employed people and businesses use credit though. Whether it is to buy stock for re-sale, buy materials for jobs etc.

Woolies was in the process of being broken up and sold on. The credit which they used to buy stock was withdrawn. I think they were asked to pay cash for everything...and this really screwed them.

 

[jakarta]

I don't think it is that wrong. Why have we such a need for/reliance on debt? Cash flow smoothing is a relatively recent invention, if you haven't the cash to pay the bills then there is something fundamentally wrong. (and I'm specifically referring to retail here as we are talking about Woolies)

Indeed many businesses do have debt and are profitable, but I'm saying it isn't as mandatory as people think. As soon as things get tough, the debt will cripple you.

Tedebear - I don't want my company to be in debt, however the services I supply and invoice for are in big lumps of cash (especially offshore work) and if someone decides to delay a single payment to me then that may be months or more income gone begging, while I still have fixed outgoings.

If you can figure a way to make everyone pay their bills on time then I agree credit becomes less important, but that isn't how it works...

Oh and since no-one has responded, Barclays were happy to charge me 17.99% above Base Rate for my overdraft plus a set-up fee, plus a substantial quartely fee whether I use the facility or not!

Piy the banks weren't so careful with their money while they were pissing it away on sub-prime mortgages eh?

 

[Lord Bracknell]

Indeed many businesses do have debt and are profitable, but I'm saying it isn't as mandatory as people think. As soon as things get tough, the debt will cripple you.

I suspect that the "business advisors" who clutter up the foyers of banks are mainly recruited to advise their business customers that successful debt management is the key to growth and long term profitability.

I guess they rarely confessed to the role that lending to customers (who can survive without getting into debt) is also the key to banks making vast profits.

But, as tedebear points out, when things get tough, the rules change.

 

[Cian]

Sussex Stationers have cut right back on the range of books they sell. They only ever seem to have reduced price top ten books and dull old historical potboilers on the shelves, plus dreary calendars with kittens and rural scenes. They do an excellent line in artist-type paper and rolls of card in a wide array of colours, but can't believe that's any kind of secure business model at the moment.

Sussex Stationers parent firm is financially secure, though (Its owned by Eason & Son).

 

[Monkey Man]

I think it's last-roll-of-the-dice time for Threshers. No freeholds left to sell, and a business that has been shrinking for years. Without the 40% off vouchers Christmas was looking bleak indeed.

 

[seagullsovergrimsby]

Zavvi confirmed on Dec 12th that EUK had called in the £106M debt so I expect they will be the next to go bust.

 

[tedebear]

Tedebear - I don't want my company to be in debt, however the services I supply and invoice for are in big lumps of cash (especially offshore work) and if someone decides to delay a single payment to me then that may be months or more income gone begging, while I still have fixed outgoings.

See thats interesting, the offshoring company we use (and pay) give us 5 days to query an invoice, and then 30 days to pay, after which time some fairly severe penalties kick in. Its not nice, its not pleasant, but its how business is done these days. They have never been paid so much as a day late in all the time I've been in charge.


Terms mean nothing anymore, but contracts and penalties do.

 

[jakarta]

See thats interesting, the offshoring company we use (and pay) give us 5 days to query an invoice, and then 30 days to pay, after which time some fairly severe penalties kick in. Its not nice, its not pleasant, but its how business is done these days. They have never been paid so much as a day late in all the time I've been in charge.


Terms mean nothing anymore, but contracts and penalties do.

Hmm, I think we have a little confusion about offshore - I fly out to North Sea Oil Platforms etc. & do Health & Safety Audit/Consultancy work for Exploration & Production companies who operate the Rigs - I presume the offshoring company you are talking about is something different?

You are probably right about Ts&Cs meaning nothing, but it is a judgement call about getting paid promptly vs. pissing off Clients such as Oil Companies who, whatever the short term oil price drop, have better capacity to survive in a global recession than the rest of manufacturing industry.

My own fault for starting up a company 12 months ago, as opposed to 4-5 years ago....

BTW what is your line of business?

 

[ewe2]

Here's a big list of companies in trouble:-

http://www.guardian.co.uk/business/2008/nov/30/retail-christmas-downturn-investments-business

Matalan
Currys
PC World
FADS
Focus DIY
Land of Leather
Jessops
Body Shop
Clinique
Fat Face
Jimmy Choo
New Look
House of Fraser
Debenhams
Whistles
Mosaic
Zavvi
Wyevale Garden Centres
Burberry

......what a sad list,tumbleweed in the high street,mass unemployment of local people,whilst sad souls shop via computer,never leaving their house....because its cheaper.....i wonder who is the more "enriched "

 

[timco]

Fads (or the company that owns them) already gone as has Max Speillman and Click Photo (again the company that owns them).

Next JJB had all credit cover withdrawn (as with Woolies and MFI) share Price gone through the floor and poking out the otherside now (as with woolies).

Zavvi will be brought down by Woolies or more particularly by EUK which is/was profitable and had the accountants not run it into the ground as administrators then it would be viable now. Zavvi owe £100m + to the business and there is now a call on that money and they don't have it.

On the critical list DSG (Currys PC World Dioxins etc) Surprisingly Sports Direct Tesco (only kidding!) Focus (hip hip hooray)

On the list above not the quality you'd expect from a good paper, Debenhams and House of Fraser no way.

others suggested BHS owned by Phillip Green absolutely no chance. When he took it over rather than take an income from the business everything the business made was ploughed into paying off the debt. BHS and Phillip Green are vertually debt free and probably one of the strongest players in the current market.

BTW Woolworths still is a listed company you know (if currently suspended). The quoted company was Woolworths Group PLC the compny in admin is Woolworths PLC which was a wholly owned business of Woolworths Group PLC. The group still own other business's such as a 40% stake in E2UK (Joint venture with BBC) and Bartrams Publishing.

 

[ewe2]

Fads (or the company that owns them) already gone as has Max Speillman and Click Photo (again the company that owns them).

Next JJB had all credit cover withdrawn (as with Woolies and MFI) share Price gone through the floor and poking out the otherside now (as with woolies).

Zavvi will be brought down by Woolies or more particularly by EUK which is/was profitable and had the accountants not run it into the ground as administrators then it would be viable now. Zavvi owe £100m + to the business and there is now a call on that money and they don't have it.

On the critical list DSG (Currys PC World Dioxins etc) Surprisingly Sports Direct Tesco (only kidding!) Focus (hip hip hooray)

On the list above not the quality you'd expect from a good paper, Debenhams and House of Fraser no way.

others suggested BHS owned by Phillip Green absolutely no chance. When he took it over rather than take an income from the business everything the business made was ploughed into paying off the debt. BHS and Phillip Green are vertually debt free and probably one of the strongest players in the current market.

BTW Woolworths still is a listed company you know (if currently suspended). The quoted company was Woolworths Group PLC the compny in admin is Woolworths PLC which was a wholly owned business of Woolworths Group PLC. The group still own other business's such as a 40% stake in E2UK (Joint venture with BBC) and Bartrams Publishing.

lots of facts.......but what do you think....?