Topic: Carillion scrambles to stay afloat

[ShakaHislop]

More than 1,000 jobs at risk as new Homebase owner axes stores

The new owner of Homebase will unveil plans to close about a quarter of its stores next week, threatening more than 1,000 jobs.

Sky News has learnt that Hilco Capital, which struck a deal to buy the DIY chain for a nominal sum in May, is expected to outline proposals for a Company Voluntary Arrangement (CVA) that will pave the way for roughly 60 of Homebase's 249 outlets to be axed.

The number of stores to be axed was still being finalised on Wednesday, with a range of 50 to 80 shops thought to include 18 which have already been closed in recent months.

If it is at the top end of that range, the closure programme will represent almost one third of Homebase's estate.

The precise number of jobs that will be lost was also unclear, with analysts speculating that it was likely to be between 1,000 and 1,500, roughly 10% of Homebase's 11,000-strong workforce.

The eventual figure could be higher, according to one insider.

https://news.sky.com/story/more-than-1000-jobs-at-risk-as-new-homebase-owner-axes-stores-11465689

[CraigDS]

Inevitably, House of Fraser have called in the administrators. Looks like its as part of the process for the company to be sold on in part.

https://www.bbc.co.uk/news/business-45140874

[CraigDS]

Homebase closing 42 stores at a cost of 1,500 jobs as part of their restructuring via a CVA - https://www.bbc.co.uk/news/business-45180984

Ashley has said House of Fraser will keep over 80% of their stores open, which should save plenty of jobs given they were planning to close 31 of the 59 stores prior to going into administration - https://www.bbc.co.uk/news/business-45180451

[killer-heels]

Homebase closing 42 stores at a cost of 1,500 jobs as part of their restructuring via a CVA - https://www.bbc.co.uk/news/business-45180984

Ashley has said House of Fraser will keep over 80% of their stores open, which should save plenty of jobs given they were planning to close 31 of the 59 stores prior to going into administration - https://www.bbc.co.uk/news/business-45180451

House of Fraser has loads of potential. Its been selling Debenhams style, run of the mill stuff for ages but it should be all about high end goods.

[CraigDS]

House of Fraser has loads of potential. Its been selling Debenhams style, run of the mill stuff for ages but it should be all about high end goods.

I think during the recession it shifted a little from the higher end (which it did used to be) to include more of the mid end stuff like you say.

There should be room on the high street for selling high end goods, as they are certainly the type of items people want to see and try on before purchase.

[Lush is the best medicine...]

House of Fraser has loads of potential. Its been selling Debenhams style, run of the mill stuff for ages but it should be all about high end goods.

good thing mike Ashley has bought them! I mean the administrators have confirmed the £70m owed to suppliers won’t get paid, sure the luxury brands will be queuing round the block to get in there!

https://www.drapersonline.com/news/hof-administrator-halts-supplier-payments/7031688.article

[CraigDS]

good thing mike Ashley has bought them! I mean the administrators have confirmed the £70m owed to suppliers won’t get paid, sure the luxury brands will be queuing round the block to get in there!

https://www.drapersonline.com/news/hof-administrator-halts-supplier-payments/7031688.article

That depends really. I mean the company went into administration and it was the previous owners/management who caused that, and caused them not to receive payment, not Ashley.

Plus it was the administrators that concluded the deal for the sale of the assets, the proceeds of which then go to those owed money. So again not really anything to do with Ashley.

He's a prick, but not sure he's done anything wrong in this situation.

[the 92A]

If  Newcastle fans wanted to make him sell  a few protests outside H of F stores as he's trying to reposition the brand might do it .What our those men with no shirts on doing mummy😁

[Riquende]

That depends really. I mean the company went into administration and it was the previous owners/management who caused that, and caused them not to receive payment, not Ashley.

Plus it was the administrators that concluded the deal for the sale of the assets, the proceeds of which then go to those owed money. So again not really anything to do with Ashley.

He's a prick, but not sure he's done anything wrong in this situation.

Apparently one of the companies not getting paid from the collapse is the one that runs their warehouses. The company hasn't taken too kindly to this and has stopped processing orders at the warehouse, resulting in no stock being sent to stores, online customers having to get refunds and the website itself being shut down to prevent new orders.

I get they have no obligation to pay, and that it was a previous regime that ran up that debt, but you'd think they'd at least cover the payments to people they need to run the basics of the business.

[Lush is the best medicine...]

That depends really. I mean the company went into administration and it was the previous owners/management who caused that, and caused them not to receive payment, not Ashley.

Plus it was the administrators that concluded the deal for the sale of the assets, the proceeds of which then go to those owed money. So again not really anything to do with Ashley.

He's a prick, but not sure he's done anything wrong in this situation.

do you think people will want to do business with them now, especially the existing higher end brands they have there?

[Jake]

Can't wait till he renames St James' Park.

St Fraser's Park would be subtle enough. House of Geordies less so. 

[CraigDS]

Apparently one of the companies not getting paid from the collapse is the one that runs their warehouses. The company hasn't taken too kindly to this and has stopped processing orders at the warehouse, resulting in no stock being sent to stores, online customers having to get refunds and the website itself being shut down to prevent new orders.

I get they have no obligation to pay, and that it was a previous regime that ran up that debt, but you'd think they'd at least cover the payments to people they need to run the basics of the business.

Yeah I read that. The problem is if the company wasn't saved, which was the other option, they'd not only not be paid but not have the future business the new HofF can offer.

do you think people will want to do business with them now, especially the existing higher end brands they have there?

Well plenty of businesses are saved from administration, with previous suppliers losing out, and continue to do business with those suppliers.

The thing is the business that has emerged from administration is effectively a new business. The previous suppliers have the choice of not doing business with a new supplier who could bring in a lot of revenue for them, or they can cut all ties. The latter doesn't seem like an effective business decision and rather one of cutting your nose off to spite your face, which isn't something well run businesses do.

[CraigDS]

So turns out HofF had a total debt of £884m, with £484m owed to suppliers.

They had 6 bids, 4 of which offered between £40-49m. Another offered £1 plus would take on all existing debt, but then changed this to £100m before then withdrawing. This left the bid that won it.

Honestly, it appears there was no chance of all that debt being covered and there being a viable business left to be saved. It's shit for the suppliers but can see why it's just not going to happen.

[ShakaHislop]

House of Fraser warehouse jobs at risk, union says

More than 600 jobs are under threat at two House of Fraser warehouses which supply deliveries to stores and customers, a union has warned.

The GMB said 627 staff at the two warehouses were told on Friday that they are at risk of redundancy.

XPO Logistics operates the sites, in Northamptonshire and Buckinghamshire.

The GMB said XPO Logistic's warehouse staff were put on a 45-day consultation period last Friday.

https://www.bbc.co.uk/news/business-45253053

[killer-heels]

A shame to see Foyles go but good to see Waterstones performing better.

https://www.bbc.co.uk/news/business-45446899

[Libertine]

A shame to see Foyles go but good to see Waterstones performing better.

https://www.bbc.co.uk/news/business-45446899

Waterstones is a wonderful shop - a fantastic institution. They even have one here in Amsterdam - will be spending a lot of time (and money!) there.

Shame on anyone who buys a book on Amazon frankly. They're not even much cheaper nowadays - if you really need a deal and Waterstones is expensive for a particular title, Wordery is a much better option.

[CraigDS]

Debenhams in a lot of trouble it would seem. already trying to restructure and doesn't seem to be moving fast enough.

[Nobby Reserve]

Debenhams in a lot of trouble it would seem. already trying to restructure and doesn't seem to be moving fast enough.

My money would be on a CVA targeting just landlords/rents.

[CraigDS]

My money would be on a CVA targeting just landlords/rents.

Yup, seems to be becoming standard practice.

[Nobby Reserve]

Yup, seems to be becoming standard practice.

High Street rents are becoming unsustainable for a large proportion of retail businesses. I forecast a bit of a downturn in commercial high street property prices over the next few years in response to increasing downwards pressure on retail rental rates. The owners of the majority of high street retail premises have owned for years, and have enjoyed rent hikes whilst doing cock all other than sitting back and slurping on the benefit of periodic property booms.

[CraigDS]

High Street rents are becoming unsustainable for a large proportion of retail businesses. I forecast a bit of a downturn in commercial high street property prices over the next few years in response to increasing downwards pressure on retail rental rates. The owners of the majority of high street retail premises have owned for years, and have enjoyed rent hikes whilst doing cock all other than sitting back and slurping on the benefit of periodic property booms.

Yup have been saying this for a while in here. High St landlords have massively hiked rents over the last couple of decades, if not longer, and a lot have refused to budge despite the downturn and are now going to see the result of that.

[So… Howard Philips]

High Street rents are becoming unsustainable for a large proportion of retail businesses. I forecast a bit of a downturn in commercial high street property prices over the next few years in response to increasing downwards pressure on retail rental rates. The owners of the majority of high street retail premises have owned for years, and have enjoyed rent hikes whilst doing cock all other than sitting back and slurping on the benefit of periodic property booms.

The obviously have never heard of the parable of the golden goose.

[mulfella]

Debenhams in a lot of trouble it would seem. already trying to restructure and doesn't seem to be moving fast enough.

It's still profitable and almost all it's stores make a profit.

It's certainly not making what it would like, but this seems more like pre-emptive action than in being trouble

[Charlie Adams fried egg]

It's all a bit strange and I agree with others that unrealistic landlords and high business rates don't help.

Read an article from a fund manager effectively saying that while there's been a massive shift to online. Online sales are not massively profitable and are quite inefficient when things like returns are factored in. As a result the successful retailer of the future has both online and physical presence. Amazon have been good at creating a distribution model, but not that good at making money, but investors rate them on sales not profit, but rate "traditional" retailers on profit not sales. Which is why even companies like amazon are starting to invest in a physical presence.

[killer-heels]

It's all a bit strange and I agree with others that unrealistic landlords and high business rates don't help.

Read an article from a fund manager effectively saying that while there's been a massive shift to online. Online sales are not massively profitable and are quite inefficient when things like returns are factored in. As a result the successful retailer of the future has both online and physical presence. Amazon have been good at creating a distribution model, but not that good at making money, but investors rate them on sales not profit, but rate "traditional" retailers on profit not sales. Which is why even companies like amazon are starting to invest in a physical presence.

They will drive the cost of distribution down eventually. There is overcapacity in the delivery market and once these costs come down and there are more novel ways of getting a parcel to a consumer, Amazon’s profits will grow.

You also have to factor in growth in online shopping which grows at huge volumes every year. Amazon will be coining it in soon.

[CraigDS]

I mean Amazon are up to $2.5bn ish profit per quarter now so it's not all doom and gloom for them 

[killer-heels]

I mean Amazon are up to $2.5bn ish profit per quarter now so it's not all doom and gloom for them 

Would like to know what them lying bastards make in profit here in the UK.

[ShakaHislop]

House of Fraser online customers refused refunds

House of Fraser customers have been told that they'll get no refunds for goods ordered online but undelivered before the chain was bought last month.

New owner Sports Direct said people must "contact the administrators" to chase their cash.

Mike Ashley's Sports Direct agreed to buy the department store for £90m on 10 August hours after the 169-year-old chain went into administration when talks with its creditors failed to reach an agreement.

But on 15 August they took down the website, leaving online customers in the dark about their goods orders or their cash.

After an outcry from customers, House of Fraser on 16 August said it would refund customers and also cancel all online orders.

But this week a spokesperson for House of Fraser told the BBC: "The comment made on social media on August 16 can by definition only relate to orders received by the current company.

"Any issues relating to purchases made prior to August 10 must be referred to, and dealt with, by the administrators at EY. We have spoken to EY, who accept that orders taken prior to August 10th must be dealt with by them."

In other words, anyone who made an order before the takeover and owed money will be in a long line of creditors owed money.

That means it's likely they will only get a small part of the money they are owed back.

https://www.bbc.co.uk/news/business-45520194

[CraigDS]

That's how administration works unfortunately  (and fortunately).

The company prior to it going into administration no longer exists. Anything to do with it before then is not the responsibility of the new company.

[ShakaHislop]

Exclusive: Supplier to cut jobs amid HoF fallout

Berwin & Berwin, a men’s tailoring supplier that is part of Edinburgh Woollen Mill Group, has entered into a consultation period with a number of employees at its Leeds site, after it failed to reach an agreement with House of Fraser’s new owner Sports Direct over future trading terms.

Drapers revealed that Edinburgh Woollen Mill Group (EWM) pulled all of its stock, out of the department store chain after negotiations with Sports Direct collapsed earlier this month. EMW supplied own-brand HoF ranges manufactured by Berwin & Berwin, and ran concessions for Berwin & Berwin, Jaeger, Jane Norman and Calvetron Brands in HoF.

Berwin & Berwin employs around 50 people at its Leeds site, which focuses on private label, but not all of these people will be affected by the consultation, Drapers understands. The consultation will run for a minimum of 30 days and the future of the Leeds office is now in doubt.

“Sadly, earlier this month, despite our very best efforts over a protracted period, we could not reach an agreement with House of Fraser’s new owner, Sports Direct, about terms that gave us confidence in the long-term future of department store and their commitment to suppliers, and we were forced to terminate all future work with the department store.”

The spokesman added: “Given that a significant amount of Berwin & Berwin’s business comes from manufacturing House of Fraser’s own-brand line of men’s formal wear, this has had an unavoidable impact on our business and, as a direct result, we have entered into consultation with our colleagues about the future of the Leeds office.

https://www.drapersonline.com/news/exclusive-supplier-to-cut-jobs-amid-hof-fallout/7032205.article

[ShakaHislop]

Coast fashion retailer collapses putting 300 jobs at risk

Women's fashion retailer Coast has gone into administration, putting 300 jobs at risk, in a sign of continuing pain on the High Street.

The collapse means the immediate closure of its 18 UK outlets, at locations including Oxford Street and Westfield in London.

https://www.bbc.co.uk/news/business-45830031

[Nobby Reserve]

The Patisserie Valerie group (owns Philpotts, Druckers, Baker & Spice, Flour Power) looks set to crash - with a fraud, possibly involving their suspended FD, being widely reported as the backdrop to this.

2,500 jobs at risk in a company, owned by venture capitalists and valued at £440m on Monday (with £28.8m in cash reserves reported in their last accounts) unless they receive a substantial capital injection quickly.

https://www.bbc.co.uk/news/business-45824285

[west_london_red]

The Patisserie Valerie group (owns Philpotts, Druckers, Baker & Spice, Flour Power) looks set to crash - with a fraud, possibly involving their suspended FD, being widely reported as the backdrop to this.

2,500 jobs at risk in a company, owned by venture capitalists and valued at £440m on Monday (with £28.8m in cash reserves reported in their last accounts) unless they receive a substantial capital injection quickly.

https://www.bbc.co.uk/news/business-45824285

It looks like the same old story again. An individual, group or family start a business, it’s becomes successful and the original founders sell out to some kind of venture capital, financial types who either suck all the cash out of the business, asset strip, borrow money they can’t pay, or just commit outright fraud and then the business goes down the pan and the employees are in the dole queue.

[Lush is the best medicine...]

The Patisserie Valerie group (owns Philpotts, Druckers, Baker & Spice, Flour Power) looks set to crash - with a fraud, possibly involving their suspended FD, being widely reported as the backdrop to this.

2,500 jobs at risk in a company, owned by venture capitalists and valued at £440m on Monday (with £28.8m in cash reserves reported in their last accounts) unless they receive a substantial capital injection quickly.

https://www.bbc.co.uk/news/business-45824285

didnt know they owned Philpotts, damn used to love going there for lunch

It looks like the same old story again. An individual, group or family start a business, it’s becomes successful and the original founders sell out to some kind of venture capital, financial types who either suck all the cash out of the business, asset strip, borrow money they can’t pay, or just commit outright fraud and then the business goes down the pan and the employees are in the dole queue.

Think this could be more fraud than asset stripping as its a public company and the venture capitalists came in 12 years ago (and did substantially grow the business)

[west_london_red]

Think this could be more fraud than asset stripping as its a public company and the venture capitalists came in 12 years ago (and did substantially grow the business)

Fair enough, and yeah it did grow - there’s even one in Hounslow High St!

I suppose the next question is who carries out the fraud and who knew about it?

[CraigDS]

It looks like the same old story again. An individual, group or family start a business, it’s becomes successful and the original founders sell out to some kind of venture capital, financial types who either suck all the cash out of the business, asset strip, borrow money they can’t pay, or just commit outright fraud and then the business goes down the pan and the employees are in the dole queue.

Not sure that’s why it looks like at all. Seems fraud from the finance director trying to cover up financial irregularities.

[stewil007]

Not sure that’s why it looks like at all. Seems fraud from the finance director trying to cover up financial irregularities.

This is what gets me, that one or two people (probably) can play fast and loose with, potentially, 2500 peoples livelihoods.  Boils my piss! 

[CraigDS]

This is what gets me, that one or two people (probably) can play fast and loose with, potentially, 2500 peoples livelihoods.  Boils my piss!

Well, they shouldn’t be able to really. Especially in a publicly company. Questions certainly to be asked as to who knew what and why it wasn’t spotted by their accountants.

[stewil007]

Well, they shouldn’t be able to really. Especially in a publicly company. Questions certainly to be asked as to who knew what and why it wasn’t spotted by their accountants.

I'm amazed at how many times I hear this, you are right they shouldn't be able to, but here we are again, the actions of a few affecting thousands and the knock on from that.

[CraigDS]

Finance Director was arrested (and released on bail) last night apparently.