Latest companies suffering in present crisis

How to survice the coronavirus crisis

Businesses of all types are being hit by the global pandemic. No section seems to be immune to its effects as people change their lifestyles and habits.

Primark have started closing its stores in Europe while Halfords is looking to close its Cycle Republic chain with the potential loss of 226 jobs.

BA has signalled a massive drop in the number of flights it is prepared to fund as passenger numbers drop off. The same is true of Virgin Atlantic who have pleaded with the Government for a multi-billion pound bail out. Kingfisher is another retailer with major concerns as the lock downs on the Continent is preventing footfall in its DIY stores.

Writing in Retail Week today George MacDonald reported: “DIY giant Kingfisher has warned of significant uncertainty on sales and demand after closing its 221 stores in France. The Anglo-French giant, which owns B&Q in the UK and Castorama and Brico Dépôt in France, said that the measures, which followed a French government directive over the weekend ordering the closure of non-essential public space, would last until April 14. Kingfisher said that all 28 of its stores in Spain have also closed until March 29, following the Spanish government’s declaration of a two-week state of emergency.”

The Financial Times have reported: “France’s PSA is to shut all factories across Europe as it struggles to cope with the impact of the coronavirus outbreak, hitting more than a dozen sites in countries including Germany, Britain and France. The closures will be phased this week, with every site closed until at least March 27. By mid-morning in Paris, the share price of PSA -- whose brands include Peugeot, Citroen, Vauxhall, Opel and DS -- had dropped more than 16 per cent amidst a broader sell off for the auto industry.”

The reasons behind the collapse in holiday and travel industries is obvious as Governments close borders and enforce lock downs affecting retailers, bars and cafes, but there is even more bad news. In the last few days stocks around the world have fallen but it has accelerated following the travel ban speech from US President Donald Trump that has triggered a pan-European sell-off. Despite the Federal Reserve in the USA, the European Central Bank and the Bank of England cutting interest rates and announcing quantitative easing (printing more money) the slide has continued.

It has little effect right now but fast forward past Easter and its effects will see a lack of liquidity in international companies who in turn will put the brakes on investment. Coupled with a big drop in the oil price as demand goes down and we have a recession with all that entails.

Ian Carrotte is adamant that to survive companies and sole traders need to act now. He said: “Number one is credit control. Cash is king and cash flow is the key to survival. Customers who take months to pay need to be shown the red card, savings must be made even if that means laying off staff and investment should be on hold unless critical to survival. Members of ICSM Credit need to share information of firms in trouble as one big company crash will take down smaller suppliers. But the positive news is if you can survive this then when things improve you’ll be in prime position to expand.”

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