Business Armageddon postponed until March – but retailers continue to collapse as lockdown kills footfall - including one of the Duchess of Cambridge's favourite stores

Pic: Daily Mirror

Business Armageddon postponed until March – but retailers continue to collapse as lockdown kills footfall - including one of the Duchess of Cambridge's favourite stores

Leading industry commentators predicted there would be a flood of business insolvencies in November when the furlough scheme ended. At the eleventh hour the Chancellor of the Exchequer Rishi Sunak extended the way the Government pay 80% of wages for participating firms which has in effect kept thousands of firms afloat. Armageddon has been delayed to March but still major names are going to the wall with others teetering on the brink of administration sending a red light to suppliers.

Estate agent close to collapse

ICSM Credit’s Ian Carrotte has issued a warning to businesses who supply goods and services to the nationwide estate agent Countrywide after the company announced wide spread branch closures.

Business Sale reported on their website: “Last month the firm announced plans to raise £165m in an attempt to restructure existing debt. However, it confirmed this week that Connells had signalled their intention to put forward a bid should the group enter administration. A statement from Countrywide revealed Connells has offered an indicative approach at 250p a share in cash, which would take the chain back to private ownership. Commenting on the offer, a statement from Connells revealed that it felt the business needed a new management team and strategy to help it turn around.”

Ian Carrotte said all the tell-tale signs were there of an impending collapse. “If you supply them with literature, computers, sale boards or whatever then put them on hold immediately. Once in administration you could find there is little chance of being paid.”

Lockdown kills coffee

There is growing anger amongst Tory bank benchers over the way the November lockdown has hit cafes and pubs. Ian Carrotte of ICSM Credit said it was totally unjustified – and a look at the Government’s own statistics showed the in-place tier system was working.

He said: “Café Nero are the latest High Street name to be hit by no footfall, no business and no customers. What in heaven’s name is going on? They had taken all reasonable precautions and are now being hit by another lock down.”

The Daily Mail’s Ruth Sunderland wrote today: “Caffe Nero has become the latest high-profile business casualty of the Covid-19 pandemic – with the second national lockdown being blamed for its plight. The coffee chain was last night forced to put itself into a Company Voluntary Arrangement, a type of insolvency that allows firms to continue trading while they attempt to get their finances in order.

“Founder Gerry Ford, 62, said the second lockdown had pushed the company to act. The chain has suffered from curbs on socialising, fewer shoppers in town centres and the government advice for workers to stay away from their offices.”

Retailer’s CVA plan

The Retail Gazette has reported on the womenswear retailer LK Bennett launching a CVA after a long period of administration.

Sahar Nazir said: “LK Bennett is reportedly preparing to launch its CVA proposals which will see five stores close down and move remaining shops to turnover-based rents. The womenswear retailer said the proposals will result in a small number of redundancies.”

The trade publication said LK Bennett is being advised by restructuring firm Alvarez & Marsal and employs 400 people, 300 of whom are in retail roles. It has 18 standalone stores, all of which are closed under the lockdown restrictions.

They reported that LK Bennett appointed EY as administrator of its UK business on March 7. On April 12, Rebecca Feng, who ran LK Bennett’s Chinese franchises, bought the UK, Ireland and wholesale business of the premium womenswear retailer for £9.8 million through the company Byland UK. Earlier this year, the administrators extended the company’s administration process for a further year. LK Bennett said it is currently repurposing the unused space at its West End store on Brook Street into office space.

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 or email Ian at 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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