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Retail horror

Traditionally the new year is welcomed in by the sound of banks pulling the rug from under a variety of retail chains. There is a reason for this timing and perhaps it would be best not to explictly state what thi is but this has become a well established new year custom in recent years and many will be wondering about what 2011 will bring.

So how will this new year shape up ?

My gut feeling is that the high street will escape without too many names disappearing. Ok there are high profile difficulties at a number of chains (JJB and HMV spring to mind) but they are perhaps not exposed to immediate risk. Optimism about the future is growing and this is as much as a factor as the balance sheet and p&L.

But if there are concerns about any of your debtors or prospects, think through exactly where they are placed in the market. Are they being squeezed by online retailers (HMV, Waterstones) or are they simply stuck in an overcrowded and suddenly less bouyant market (JJB perhaps)? On a smaller scale, are they exposed to discretionary spending habits (gift shops jewellers)? Also, would you shop there? Thats a very basic question i know but your opinion will be reflected by many and casting mind back to recent failures would prove that very point

All questions that need to be addressed and very much part of any credit manager’s portfolio

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