Topic: Carillion scrambles to stay afloat

[Iska]

John Lewis to cut jobs and stores

This is a big one I think, not just for the fact that it’s happening - it’s been trailed on this thread before iirc - but because of the explanation: ‘come to terms with the fact that it has too much space’.  It’s been a large-scale store modernisation project for the past few years, so this is a complete about-turn.  City centre retailing just isn’t coming back, is basically what they’re saying.  So what happens to the city centres?

[Henry Kissinger]

All these national 'gourmet' burger chains are such a massive con. Awful.

The only good thing about GBK was that they did peanut butter milkshakes.

[Henry Kissinger]

John Lewis to cut jobs and stores

This is a big one I think, not just for the fact that it’s happening - it’s been trailed on this thread before iirc - but because of the explanation: ‘come to terms with the fact that it has too much space’.  It’s been a large-scale store modernisation project for the past few years, so this is a complete about-turn.  City centre retailing just isn’t coming back, is basically what they’re saying.  So what happens to the city centres?

With the amount of apartments springing up in city centres all over the UK, I'd imagine we'll just see a lot more coffee shops, takeaway places and Tesco/Sainsbury mini stores. The large department stores could possibly be turned into more apartments.

[Devastatin' Dave]

With John Lewis, it does show how quickly things can change as they were seen as how to do things in the correct way. They have had a challenging couple of years due to decline in footfall and GBP being devalued.

We are definitely seeing the acceleration of retail jobs disappearing, which will be a major employment headache.

[So… Howard Philips]

With the amount of apartments springing up in city centres all over the UK, I'd imagine we'll just see a lot more coffee shops, takeaway places and Tesco/Sainsbury mini stores. The large department stores could possibly be turned into more apartments.

Or socially distanced bars.

[Felch Aid]

Intu into administration a few days ago.

Byron Burger look like they'll follow in the next day or two.

The former will almost certainly continue beyond administration, I imagine it's mostly being used as a way to shed some of it's huge debt and under performing locations.

Just following on from the John Lewis changes. I can't see how these huge shopping centres can co-exist with the high street with continuing footfall and online almost becoming the norm. Presumably these places will be converted into more housing surely otherwise what's the point in them?

[killer-heels]

John Lewis to cut jobs and stores

This is a big one I think, not just for the fact that it’s happening - it’s been trailed on this thread before iirc - but because of the explanation: ‘come to terms with the fact that it has too much space’.  It’s been a large-scale store modernisation project for the past few years, so this is a complete about-turn.  City centre retailing just isn’t coming back, is basically what they’re saying.  So what happens to the city centres?

Not surprising and it was only a matter of time. Not all Covid related either. Marks and Spencers will be gone pretty soon I imagine.

The high street is dead. Certainly in terms of any shopping taking place. They might as well all become houses and flats.

[ShakaHislop]

John Lewis to cut jobs and stores

This is a big one I think, not just for the fact that it’s happening - it’s been trailed on this thread before iirc - but because of the explanation: ‘come to terms with the fact that it has too much space’.  It’s been a large-scale store modernisation project for the past few years, so this is a complete about-turn.  City centre retailing just isn’t coming back, is basically what they’re saying.  So what happens to the city centres?

Cuts could also include the smaller of its two head office buildings in London.

Why did they even have 2 head offices in the first place?

[Devastatin' Dave]

Presumably because they couldn’t fit all Head Office employees in one.

[killer-heels]

Presumably because they couldn’t fit all Head Office employees in one.

Its crazy that they even have head offices. Just stick as many staff into the stores. It would also employ people away from London.

[Devastatin' Dave]

John Lewis existed pre high speed internet when it was useful to have people running central operations in one place, so they needed a head office.

Given so many functions within businesses are coping just fine without a physical head office I’m sure your suggestion will be the direction many companies will take.

I would hardly say it was crazy they had a head office though.

It’s also only a recent phenomenon that retail space is not that valuable. The idea of giving up a floor in a store for office space would have been crazy.

[killer-heels]

John Lewis existed pre high speed internet when it was useful to have people running central operations in one place, so they needed a head office.

Given so many functions within businesses are coping just fine without a physical head office I’m sure your suggestion will be the direction many companies will take.

I would hardly say it was crazy they had a head office though.

They could have made and really should have made the change ages ago.

That goes for companies like Tesco, Sainsburys, M&S etc. Head offices are not needed when those retailers have plenty of store and distribution units nationwide.

Most cases you only need a few rooms and internet access.

[Devastatin' Dave]

I think it would be a lot more expensive than you think to make that kind of decision, in terms of redundancies, relocation and loss of a lot of understanding of the business.

I can see why that haven’t gone down that route.

[CraigDS]

They could have made and really should have made the change ages ago.

That goes for companies like Tesco, Sainsburys, M&S etc. Head offices are not needed when those retailers have plenty of store and distribution units nationwide.

Most cases you only need a few rooms and internet access.

You’d be surprised just how much back office staff those sorts of businesses need to function - they almost certainly need a head office.

Most will be over staffed though I’d guess.

[killer-heels]

I think it would be a lot more expensive than you think to make that kind of decision, in terms of redundancies, relocation and loss of a lot of understanding of the business.

I can see why that haven’t gone down that route.

They havent because in many of those companies (one of those which I work for) is that there is still the belief of centralisation in strategy and decision making. It would be costly and it would mean huge upheavals but ultimately they have seen that such decisions dont fall over with remote working.

[Devastatin' Dave]

Yes, that’s the part I agreed with.

Moving roles around to each store location is what I’m saying would be costly and have risk attached to it.

Edit: As a result, I don’t think it’s crazy that they haven’t rethought their approach to head offices, I agree it isn’t forward thinking.

[Elmo!]

I'm not sure I get this argument... every large company has a head office. 2 'head' offices is a bit strange I'll give you that!

Mind you we have a nominal 'head' office for *cough* tax reasons *cough* in a certain country with only a few employees and our actual main office in the USA.

Where is its senior management going to be based? Its buyers? Its web developers?

Obviously a lot of them can work from home to an extent but there will still need to be an office.

[killer-heels]

I'm not sure I get this argument... every large company has a head office. 2 'head' offices is a bit strange I'll give you that!

Mind you we have a nominal 'head' office for *cough* tax reasons *cough* in a certain country with only a few employees and our actual main office in the USA.

Where is its senior management going to be based? Its buyers? Its web developers?

Obviously a lot of them can work from home to an extent but there will still need to be an office.

In its stores and distribution sites.

[nayia2002]

Upper crust gone too.

[killer-heels]

Upper crust gone too.

I am going to miss being tempted about their rock hard pretzels with ham and meats that they scooped up off the floor.

[Crosby Nick]

I am going to miss being tempted about their rock hard pretzels with ham and meats that they scooped up off the floor.

Yep, I’m going to have to find somewhere else to go to when I want to rip the roof of my mouth apart.

[Riquende]

Luton do though, as it's officially London Luton Airport.

The company that owns the airport called it that. People in Luton don't consider it part of London.

The airport name does have consequences though, there's some dodgy educational place in the town centre that calls itself the 'London Technical Centre' or something along those lines. And some shady owner who bought Luton Town in the 00s wanted to rename the club 'London Luton' for some reason (he was the one who launched the 'Manager Idol' fan poll to pick the club's new manager, despite already having offered Mike Newell the job. Mysteriously, Newell won.

[Felch Aid]

Not as big as some of the announcements but the theatres are going to struggle without bums on seats.

https://www.royalexchange.co.uk/a-statement-from-the-royal-exchange-theatre-july-2020?utm_source=Twitter&utm_medium=Social&utm_campaign=GeneralNews&utm_term=RETStatementJuly2020

[killer-heels]

Not as big as some of the announcements but the theatres are going to struggle without bums on seats.

https://www.royalexchange.co.uk/a-statement-from-the-royal-exchange-theatre-july-2020?utm_source=Twitter&utm_medium=Social&utm_campaign=GeneralNews&utm_term=RETStatementJuly2020

Theatres are fucked big time. Most wont exist by the end of this year. Like the high street, their days are numbered.

[arthur sarnoff]

The company that owns the airport called it that. People in Luton don't consider it part of London.

The airport name does have consequences though, there's some dodgy educational place in the town centre that calls itself the 'London Technical Centre' or something along those lines. And some shady owner who bought Luton Town in the 00s wanted to rename the club 'London Luton' for some reason (he was the one who launched the 'Manager Idol' fan poll to pick the club's new manager, despite already having offered Mike Newell the job. Mysteriously, Newell won.

Sorry, I did mean the airport itself.  Which is terrible, and obviously, not in London. 

[Devastatin' Dave]

Theatres are fucked big time. Most wont exist by the end of this year. Like the high street, their days are numbered.

You could say that about any indoor activity at this stage; cinemas, theatres, bowling alleys, gyms etc.

Many businesses in this sector won’t survive in their current firm reducing capacity by even 25% for a prolonged period will end most of them. I’d add restaurants and cafes to that list, as we have already seen.

Even a highly profitable (35% EBITDA) and cash generative business like Cineworld will struggle if they have to reduce capacity by 60%.

35% EBITDA is something most businesses dream of, so I can’t see how you can reduce income by even 25% without looking at cutting costs.

Link below for 60% reference.

https://www.independent.co.uk/arts-entertainment/films/news/cinemas-reopen-coronavirus-guidelines-face-masks-a9584851.html

I think business support should exist from government as long as capacity restrictions are in place, otherwise businesses failures will continue.

[davidlpool1982]

You could say that about any indoor activity at this stage; cinemas, theatres, bowling alleys, gyms etc.

Many businesses in this sector won’t survive in their current firm reducing capacity by even 25% for a prolonged period will end most of them. I’d add restaurants and cafes to that list, as we have already seen.

Even a highly profitable (35% EBITDA) and cash generative business like Cineworld will struggle if they have to reduce capacity by 60%.

35% EBITDA is something most businesses dream of, so I can’t see how you can reduce income by even 25% without looking at cutting costs.

Link below for 60% reference.

https://www.independent.co.uk/arts-entertainment/films/news/cinemas-reopen-coronavirus-guidelines-face-masks-a9584851.html

I think business support should exist from government as long as capacity restrictions are in place, otherwise businesses failures will continue.

There's still a call for most of the businesses, it's just Covid and the absolutely fucked in the head obsession with short termism and corporate initiatives and the like (IMO) have meant a lack of planning and resilliance combined with takeover after takeovers piling debts on companies make the whole pack of cards fall down.

People still want to go the gym, cinemas (which were having record years recently) and have shared experiences like theatres, but the sytsems in place just aren't robust enough to survive shutdowns for even a reletively short period of time. I mean, in the grand scheme of thngs 3 months is nothing. You constantly get dickheads in governments and "financial coaches" saying how irresponsible it is for individuals not to have 6 months or more back up savings, yet companies can't last 3 months.

Leveraged buyouts should be binned off ASAP. If you can't afford the debt you took to buy a company, why should the company be left on the hook for it? I mean, I laugh at United and the debt mountain it has from the Glazers but it's not right. That place is a commercial juggernaught but it keeps having to make more and more money just to stand relatively still.

[Riquende]

Sorry, I did mean the airport itself.  Which is terrible, and obviously, not in London.

Ah okay, yes. But having said that, there is a monorail being built between the airport and the airport train station that should be about a 5 minute journey, which means that you could potentially step off the plane and be at a central London destination in about an hour (if it's near Blackfriars), without ever having to see any part of Luton itself. Given how long it's taken me to transit between some city centres and their airports I wouldn't necessarily call it false advertising to use the airport name to tell travellers it's a pretty convenient trip in.

[Jiminy Cricket]

You could say that about any indoor activity at this stage; cinemas, theatres, bowling alleys, gyms etc.

Many businesses in this sector won’t survive in their current firm reducing capacity by even 25% for a prolonged period will end most of them. I’d add restaurants and cafes to that list, as we have already seen.

Even a highly profitable (35% EBITDA) and cash generative business like Cineworld will struggle if they have to reduce capacity by 60%.

35% EBITDA is something most businesses dream of, so I can’t see how you can reduce income by even 25% without looking at cutting costs.

Link below for 60% reference.

https://www.independent.co.uk/arts-entertainment/films/news/cinemas-reopen-coronavirus-guidelines-face-masks-a9584851.html

I think business support should exist from government as long as capacity restrictions are in place, otherwise businesses failures will continue.

On the other hand, all these companies which require large spaces in which to operate going (or potentially going) bust will add further pressures upon the commercial lease market. A huge chuck of retailer and leisure industry financial commitments go out in rent. The large landlords seem to have been operating* an (illegal) cartel, where there are no alternative spaces available at a reasonable rate. Well, maybe they will now see the writing on the wall and start offering more realistic rents. Of course, commercial rates have to be overhauled too. This means more central and/or local taxation for individuals and taxation of profits.

The other thing which would make a difference is how planning manages out-of-town retail. If they become more restricted and existing sites rezoned over time, this could help drive back operations to more central locations. There are a lot of balls in the air right now. Obviously, the existing paradigm is unsustainable. Here in France, town and city centers are much more vital. Yes, I've noticed more empty spaces because of the epidemic, but generally, far, far fewer than in the UK.

https://www.mirror.co.uk/news/uk-news/french-high-streets-thriving-more-14206183

The UK is pretty shit. When I visited my home city nearly two years ago, it was a depressing sight. It was a little embarrassing to have my American wife see it. She was quite exited to visit the UK for an extended period (6-7 months), but could not wait to leave (I felt similar). In truth, the city was probably not a lot worse than 10 years ago, but I had forgotten. But I did certainly notice the drop in variety: generally fewer good retailers and the huge rise in fast food and very mediocre cafes. I could not find a single half-decent shoe shop in the city. All I wanted was some Merrells - I had to buy them online. Ridiculous.

The depression of the high street and city centres started under Thatcher, of course. And no Government since then has attempted to do anything about it - except to let it get worse.

And, like in France, Amazon and the like need to start paying higher taxes.

* I'm speculating, but it would explain why the market has failed to operate as we should expect.


Edited for typos.

[Jiminy Cricket]

Leveraged buyouts should be binned off ASAP. If you can't afford the debt you took to buy a company, why should the company be left on the hook for it? I mean, I laugh at United and the debt mountain it has from the Glazers but it's not right. That place is a commercial juggernaught but it keeps having to make more and more money just to stand relatively still.

I'd also bin short selling. Betting on companies dropping in value, only adds pressures for companies to perform poorly (or potentially fail). It actually encourages all kinds of nefarious actions. Maybe I am being naive (my knowledge on the subject is certainly very limited), but I do not understand why it is legal.

[nayia2002]

Jeez! It's a fucking massacre!
Cafe rouge and bella italia closing a few sites now

[Elmo!]

I'm all for restaurant chains going bust if it allows independent places to open in their place once this is all over.

I would think the same for shops but unfortunately Amazon will just sweep up that business.

[nayia2002]

I'm all for restaurant chains going bust if it allows independent places to open in their place once this is all over.

I would think the same for shops but unfortunately Amazon will just sweep up that business.

The extortionate rent and rates are killing the industry even for independents

[bornandbRED]

https://www.mirror.co.uk/news/uk-news/french-high-streets-thriving-more-14206183

The UK is pretty shit. When I visited my home city a nearly two years ago, it was a depressing site. It was a little embarrassing to have my American wife see it. She was quite exited to visit the UK for an extended period (6-7 months), but could not wait to leave (I felt similar). In truth, the city was probably not a lot worse than 10 years ago, but I had forgotten. But I did certainly notice the drop in variety: generally fewer good retailers and the huge rise in fast food and very mediocre cafes. I could not find a single half-decent shoe shop in the city. All I wanted was some Merrells - I had to buy them online. Ridiculous.

The depression of the high street and city centres started under Thatcher, of course. And no Government since then has attempted to do anything about it - except to let it get worse.

Interesting point, and I agree. The UK has a real lack of individualism on its high streets.

In much of Europe, you can walk through endless streets/alleys and come across the odd Subway/McNasty's/Starbucks. In the UK - you seemingly cannot walk more than 5 metres without hitting another franchise. Pretty dire state of affairs, unless you're from some chic London neighbourhood and are lucky enough to be able to pay £15 for avocado on toast.

[Jshooters]

Interesting point, and I agree. The UK has a real lack of individualism on its high streets.

In much of Europe, you can walk through endless streets/alleys and come across the odd Subway/McNasty's/Starbucks. In the UK - you seemingly cannot walk more than 5 metres without hitting another franchise. Pretty dire state of affairs, unless you're from some chic London neighbourhood and are lucky enough to be able to pay £15 for avocado on toast.

Fuck yeah, I often note that you could be teleported to almost any town's high street and not have the faintest idea where you were because they're nigh on identical

[Iska]

Any idea what the structural reasons are as to why that should be so in the UK, but not elsewhere?  The three you mention are franchise operations (I think), but the high streets are full of of actual chains as well.

You will still get independent shops in very wealthy and very poor areas though, to my eye; this seems to be phenomenon across the wide mid-range, but less so at the extremes.

[reddebs]

Fuck yeah, I often note that you could be teleported to almost any town's high street and not have the faintest idea where you were because they're nigh on identical

Even the order they are on the high st and shopping centres is identical though.

The smaller towns have a better mix of independant stores compared to larger ones. 

I was pleasantly surprised when I started working in Pontefract, the street where the salon is has only independent shops.

Clothes, shoes, cafes, furniture and household things, pet food and accessories, florists and a mix of dentists, solicitors, banks, estate agents and accountants.

And not a boarded up shop to be seen.

Sent from my SM-G960F using Tapatalk

[The Last Known Survivor]

Ah okay, yes. But having said that, there is a monorail being built between the airport and the airport train station that should be about a 5 minute journey, which means that you could potentially step off the plane and be at a central London destination in about an hour (if it's near Blackfriars), without ever having to see any part of Luton itself. Given how long it's taken me to transit between some city centres and their airports I wouldn't necessarily call it false advertising to use the airport name to tell travellers it's a pretty convenient trip in.

" Did somebody say monorail"

[The Last Known Survivor]

Maybe if all the offices that are starting to work from home continue, it may help rejuvenate smaller towns. A good few of my friends working in City offices have already moved home, obviously the ones that are renting, but it could be the start of a trend of a more dispersed work force?

[ShakaHislop]

John Lewis and Boots to cut 5,300 jobs and shut shops

https://www.bbc.co.uk/news/business-53348519