Debenhams collapse


The question that arises is whether the collapse of such retail chains is always inevtiable given the ever increasing threat from on line retail or can traders adapt successfully and fight back? A good answer to that would perhaps be the example of a high street trader that probably experienced the first brunt of impact of online retailing. That would be booksellers and specifically Waterstones, who have fought back sucessfully

The clue to Debenhams difficulties could well be explained by the following analysis

Laith Khalaf, senior analyst at Hargreaves Lansdown, said: “As an investment, Debenhams is a tale of woe from start to finish.
“The strategy since float was out of kilter with the changing habits of consumers. But even before the float, its private equity owners had put the department store under financial pressure, by selling off a number of freeholds in favour of leasing them back.
“Hindsight is a wonderful thing, but the road to Debenhams’ ruin has been paved with poor decisions, as well as a dramatic shift towards digital shopping.”
Richard Lim, chief executive of Retail Economics said: “We should not understate the significance of this collapse. Debenhams has fallen victim to crippling levels of debt, which has paralysed its ability to pivot towards a more digital and experience-led retail model.
“Put simply, the business has been outmanoeuvred by more nimble competitors, failed to embrace change and was left with a tiring proposition. The industry is evolving fast and it paid the ultimate price.”

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Holland and Barrett under fire


This story was reported on Radio 4 this morning with a sense of “shock horror” but was that entirely fair?

Yes the issue of late payments by retailers to suppliers is a continuing ugly issue and it is seemingly unresolvable simply because the chains are too powerful and too valuable to suppliers. It will take rigorous firm actions by suppliers to change the culture and to their credit, the supplier in the new piece has done so.

But consider the following

 pointed to data showing that Holland & Barrett took an average of 68 days to pay its invoices and that 60% of invoices were not paid within agreed terms.

No one wishes to excuse extended payment terms but it would be fair to counter that other retailers records are significantly worse. Holland and Barrett need to up their game but they are not alone or the worst

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FCA warns on PTP lenders


And have received the full barrelled response back from the PTP industry, the contentious point being that investments in PTP lending are deemed “high risk” by the FCA. Clearly that is aimed to dampen demand

Is this correct and what precisely is the criteria for “high risk’?  My view would be that whilst the FCA’s original point in relation to “cash investments” may be fair, such an statement appears inflamatory when taken in isolation. Furthermore, it would be reasonable to ask exactly what the statistical evidence is for this wording.

I have encountered plenty of hostility from “old school” bankers towards PTP lenders and who can forget the following ignorant comments from Lord Adair who headed the FCA?  No one should forget the chronic lack of self awareness of such representitives of an industry that wrecked the economy ten years ago but also note that the comments were made over three years ago

Lord Turner said that losses on P2P lending will “make the worst bankers look like absolute lending geniuses.”

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End of the big four?


There are demands for the “big four” audit firms to be broken up. Not before time i would argue although its worth remembering that the catastrophic Patisserie Valerie “audit” was conducted by the fifth largest firm.

There is also a demand for businesses to be compelled to change their audtors every seven years. A perfectly sensible suggestion which I believe is in place in various other economies such as Spain (where I believe the change had to be every three years).

After recent cases, confidence in reported company accounts needs rebuilding. The basis of any successful economy is trust and this is especially essential with the provision of information upon which credit decisions are based.

But why has this taken so long and its till nothing more than a recommendation? The inherent problems were first highlighted by the Enron case 18 years ago

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The end of Hastings pier?


Hastings pier is a unique award winning structure which has had a fairly mixed history in its relatively short life since the reconstruction. Its a tale which brings up many questions surrounding public/private ownership or what could be deemed public utlities and also the manner in which administrations are handled.

This excellent article by Rowan Moore in the Observer raises many disturbing questions. At the time of writing the pier was closed because its controversial owner deemed that certain unspecifed repairs were required. Things have moved on and the pier is now open but rightly many would ask how a lottery funded project which is a major attraction to this quirky developing resort ended up in such hands.“Sheikh” Gulzar has a string of failed businesses behind him as well as some seemingly rather erratic behaviour

He somehow managed to buy the pier out of administration but consider this

Smith and Williamson later announced that bids had to be received by April 2018. A new community group, Friends of Hastings Pier, scrambled to put together a bid, raising most of its £500,000 target in a few weeks.

There was a further potential bidder, Boxpark, creator of pop-up centres for shopping and events in London, which was ready to invest £10m. Boxpark told the administrators that it required six weeks to carry out due diligence – to find out if there were any horrors in the structure that might wreck its scheme.

On Friday 15 June last year a story was going round that a sale had been made. The Friends of Hastings Pier had submitted a £1 offer, on the understanding that the objective was the long-term viability of the structure. During the day Jess Steele, one of the pier’s principal champions over the last decade, heard rumours that Gulzar had submitted an offer of £30,000, so the Friends raised theirs to £55,000, but received no response. “We only found out for certain the amount of Gulzar’s bid,” she tells me, “months later from the Land Registry.”

The administrators, says Boxpark’s Roger Wade, were “extremely unhelpful. You’re not selling a corner shop. It’s Hastings pier, a Stirling prize winner, yet they seemed hell-bent on pushing one buyer. The people of Hastings have been let down.”

This clearly brings into questions regarding this particular case and in fairness Smith and Williamson have given their defence. Whether one should feel comfortable with it is a different matter and it brings to a head the whole issue of who should own what when a public atttaction is vital to a towns well being and generation of business.

And Hastings pier is a quite wonderful structure. I cycle in the area at least twice a year and its a highlight of the trip. There should be a responsibility to ensure that it is kept in safe hands and whilst the administrators would claim that were executing their role within profesional guidelines, the question shouldn be exactly what those guidelines should be.

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Another defeat for London’s ugliest trade


A metorite has smashed into a London Cab. Sadly it was just from a film set but who wouldn’t be happy to see London’s ugliest trade slowly disappear from our streets

The good news is that they recently lost their laughable court case against Uber but still far too many of these vehicles are clogging up the streets empty and fareless

No one would mind greatly if it wasnt for their attitude and yes I am a regular cyclist. Some are fine but problems cycling are inevtitably with cabs.

And not just cyclists. A friend of mine was abused by one just the other week because he didnt want to pay by cash. He’s had enough and vows to simply use Uber from this day on.

Abuse I am used to. Those of us who had the temerity to live too close to Heathrow airport got it each and every time when we dared asked for a trip back after an overnight business flight.

I am pleased to say that I havent paid to use a cab for over 20 years and will never ever use one again

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Full employment ?


The UK has the highest level of employment since 1971 and the lowest unemployment since 1975. The actual total number employed (32.7m) is the highest on record and we significantly at this particular time.

The figure is 112,000 lower than a year ago, giving a jobless rate of 3.9%, well below the EU average of 6.5%.

Im certainly no cheerleader for either political party but these figures are constantly slipping under the media radar.  This  is perhaps the result of the constant on going Brexit difficulties. It does however remain ironic that these numbers make a complete nonsense of the predictions by George Osbourne and Mark Carney

So why is the Uk continuing to be such a magnet for business “despite brexit”?

My view is that on both sides of the brexit debate there has been some slightly ridiculous hysteria and the fact remains that the UK is better placed both in terms of business culture, language, geography, company law and workforce than the vast majority of competing economies.

The fact remains that these strengths should and probably do, trump exaggerated concerns regarding trade deals.


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