0800 9700539
Show Menu

Woolworths - what is administration? Lots of people asking us this!

The news that Woolworth was failing has been copiously covered by the media recently and our websites have seen a sharp rise in activity in the last 3 days mainly around the word "administration".

What does it mean "go into administration?", visit our website to learn more about the tool.

Interesting to see that The Guardian estimates that Deloitte will be costing £22,000 an HOUR. Top insolvency partners from Deloitte are charging £600 an hour and senior managers £400ph. So trading this business until after Christmas will see total fees charged of at least £7m assuming 8 hour days, 6 day weeks !

That's the cost of insolvency I am afraid and the other costs such as the thousands of jobs yet to be lost, £m's of creditors monies lost are still to be counted.

RBS lending pledge to small firms - Can we believe this?

Well that's alright then, allSME's banking with RBS or NatWest will have their overdrafts protected and see no bank charges rises for a year. All other big banks exepcted to follow according to the media.

Given we now own 60% (or so I am told) of RBS you wonder if there will be a socialist banking agenda next year or so. Will Gordon and Alistair apply the sames logic and ineptitude to RBS as they have to the wider economic problems?

"We are a government committed to tax and spend, in this global economic crisis" says Gordon "Its RIGHT to SPEND our way out of recession"....is it? Really? I don't think giving a drunk man more drink would be seen as a cure by anybody with some wit?

So why do that to an inebriated economy that has been partying for 14 years? "Here, have another, its only money"!

Getting back to the main theme here, imagine if you will, a struggling company that cannot pay the wages and salaries next month? When Mr Small Businessman goes to the bank and asks for another £50,000 overdraft will RBS be forced to lend it? No I thought not.

The fact that the cost of his non existent overdraft won't go up though, is ok. Actually its irrelevant. Most banks got rid of most SME overdrafts a long time ago, they encouraged factoring instead because in insolvency they have more security over an assigned book debt than plain vanilla overdraft security.

Isn't it amazing that Government has finally discovered the SME agenda? Can this be the same Government that announced in its last budget that it was increasing corporation tax for all companies making under £300,000pa? Oops, that'll be the same small businesses that they all of a sudden want banks to lend to?

Oh I get it, these small businesses need the cashflow to pay Corporation Tax, PAYE and VAT of course. So let's get the banks to lend to SME's coz the Government has a cashflow problem!

Mixed messages here, but seems to me we are all being taken for mugs in the SME world, we may generate 53% of GDP according to The Federation of Small Business (don't quite see how the maths works there) but my clients tell me they cannot get overdrafts, factoring, loans or banks that will even return a call!

My message to government.... stay the hell out of SME businesses, let the market work this recession out and let the poorly run, badly managed businesses out there get taken over or fail. Oh and start containing spending- not increasing it.

Will they listen? NO! They will be bribing people with tax and VAT cuts on 24th November to encourage SPENDING, but its my guess that people won't want to spend their way to oblivion, they are too worried about their jobs, houses and livelihoods. Most people I know want to save now.

So this week will be a hugely important one for the politicians and SME business alike.

Woolworths the next big name to fail?

Woolworths the next big name to fail?

Restructuring specialists to acquire household name for £1?

Next up to enter the Hilco clutches is the household name value retailer, Woolworths. Some followers of this blog will recall I predicted that MFI would fail when Hilco entered the fray? Well after closing most of the poor stores, MFI has been restructured, downsized and it continues as a much smaller entity. Thousands of jobs have been lost at MFI.

After divesting itself of the 2entertain distribution business and possibly dealing with a large pension black hole, Woolworths will be gobbled up for £1.

What price mass closures of Woolworth stores when rents are due 29th December, watch this space!

It’s likely that Woolworthswon’t be the only big name or retail legend that bites the dust. Across the UK landlords are facing demands from their tenants for a change to the quarterly in advance method of rent payments. “Please let us pay monthly to help cashflow”, is the cry!

Well landlords may have to listen because many retailers won’t be able to meet the cashflow demands of paying rent at 29th December if Christmas is a flop… So how many empty stores will there be come dark days of January?

Gloomier and gloomier

Incessantly bad news seems to be the order of the day, today.

Just visit the BBC business website today, to see what I mean. The most striking headline is that Estate agents sold an average of 10.9 houses each in the last quarter. Yes fewer than one per week.

That's not enough to pay staff pay and commissions, salaries and fixed overheads. So why aren't more Estate Agents going bust? I put it down to the triumph of hope over adversity AND a decent cash balance when this crisis kicked off? The clients we have recently worked with ran out of cash sooner.

In November we have saved two professionally run companies with 7 branches each: both have slashed employment costs (with nil cash cost), both have removed management overheads, both have focused on SURVIVAL. Both have kept branches open on skeletal staffing levels.

You may recall we also rescued another multi branch firm in October?

Interestingly our client based in the South East saw October sales just ahead of our gloomy forecast and November has continued with some sizable sales made and COMPLETED. So that means that they will still be here come January.

I wonder if the many struggling small to medium groups of agencies could learn a thing or two from our clients? Why wait til the company runs out of cash, notwithstanding your legal obligation to act if the company is insolvent?

Talk to me in confidence if your agency group needs a lifeline.

Keith 07974 086779

KSA Companyrescue grows again

I am delighted to announce that Eirlys Lloyd and Stuart Nicholls have joined KSA in our head office as corporate advisors.

Stuart is a post graduate in Business coupled with many years of business experience in the leisure, holiday and hospitality sector.

Eirlys too has many years of advisory and business experience in the legal profession and after that in the hotel and small business sectors. For those like me who have not seen this name before Eirlys says her name "is Welsh and rhymes with wireless"!

Our head office advisory team has grown to 10 now. This continues our planned growth and builds more strength in depth to help our clients in these straightened times for SME companies in the UK.

I look forward to making further announcements about growth for KSA CompanyRescue in the next few weeks.

Meantime, given that all my staff HAVE to read this blog (mean or what!!) I wish Stuart and Eirlys well as they learn the ropes with their new colleagues.
1


DISCLAIMER

The information contained in this Blog (the "Blog") is intended solely to provide general guidance on matters of interest for the personal use of the reader, who accepts full responsibility for its use. The application and impact of laws can vary widely based on the specific facts involved. Given the changing nature of laws, rules and regulations, and the inherent hazards of electronic communication, there may be delays, omissions or inaccuracies in information contained in this Blog. Accordingly, the information on this Blog is provided with the understanding that the authors and publishers are not herein engaged in rendering professional advice or services. As such, it should not be used as a substitute for consultation with professional and competent advisers. Before making any decision or taking any action, you should consult a professional adviser. 

While we have made every attempt to ensure that the information contained in this Blog has been obtained from reliable sources, KSA Group is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information in this Blog is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Nothing herein shall to any extent substitute for the independent investigations and the sound technical and business judgment of the reader. In no event will KSA Group, or its directors, employees or agents, be liable to you or anyone else for any decision made or action taken in reliance on the information in this Blog or for any consequential, special or similar damages, even if advised of the possibility of such damages. 

Links to Related Internet Sites 

Certain links in this Blog connect to third party web sites. KSA Group does not accept any responsibility for, nor makes any representations as to the accuracy of, any content in such third party web sites. 

Third Party Comments 

Third parties may submit comments for publication on the Blog. Any such comments are submitted on the basis that KSA Group will review and may edit such comments, and that not all submissions will be published. Any third party comments published on the Blog (whether edited or not) are third party information for which KSA Group takes no responsibility and disclaims all liability, and the above disclaimer applies to any such third party comments. 

Privacy Statement 

If and to the extent that you submit any personal data (such as your name and email address) to KSA Group through this Blog, including by email to the Blog manager, KSA Group (as data controller) confirms that it will only use any such personal data for the purposes for which you have provided such data. 

Copyright 

The copyright in the text, podcasts, PowerPoint slides, layout and any other materials on this Blog (other than any third party comments) is owned by KSA Group Ltd. All rights are reserved. 
If you wish to use or copy any of the text or other materials on this Blog (or any extracts from the same), you must first contact KSA Group for copyright permission in relation to the proposed use. In addition, any use of text or other materials on this Blog (or any extracts from the same) in published materials must identify the KSA Group materials involved and reference the KSA Group author's name. 

The browser you are using is Explorer 8 and this site is not compatible with this version. Please upgrade or switch, which is free, for a more secure and better browsing experience.Close