Archive
End of HMV
Maybe or maybe not, but having visited the flagship Oxford street store today, the only conclusion was that the store is finished.
It was a shambles, most especially in the once excellent jazz and classical rooms which have been bundled together into a half empty shelf mess
No one visiting today would be in a hurry to return and unless at least a veneer of regular trading is maintained, the store will have the distinct stench of decay
Very sad. This was once a great London shopping institution
http://www.musicweek.com/news/read/hilco-now-sole-hmv-bidder-report/054055
Thoughts on the invoice financing market
As a broker it is necessary for me to keep as up to date with developments in the invoice financing market. Who will do what and who’s keen to lend (although they all say they are) and who isn’t, is an ever shifting landscape but there are some overall trends too, which are interesting
Its not my business to name names but heres a few developments that might indicate a general trend
1. One of the bigger players in the market are not taking on new clients unless the fees are > £10 p/a. This has come down from their parent company and whilst the shift is maybe understandable. £10k feels like an knee jerk figure fired off without too much analysis. if it had been £9500 say then you could be sure that thought went into it
2. A large player is pulling out of the factoring market whilst retaining the invoice discounting arm. In effect no more outsourced credit control for their clients. Start of a trend?
3. A large player is working hard to brush up its image, which hasn’t always been wonderful. They are taking some decent steps in my opinion
4. Construction is harder to fund than ever but there is a significant new lender in the market, but they are not cheap
5. A single invoice discounting firm is booming and it is not perhaps the lender you thought. This is a significant market that has been overlooked but would be more significant still if rates came down a bit
6. One significant player has very substantially cut back its South east workforce. I like their account manager a lot because he analyses clients more or less on the spot and is realistic, so i hope they are still enthused for new business
7. Difficult to make sense of the large banks attitude to new deals but i sense that there are greater restrictions now than in recent months. I also have a feeling that the pressure to deliver profits will filter its way down the chain this year, but we shall see
These are just snippets of information but useful all the same. Luckily i have good contacts within the industry and writing for the in house magazine (Business Money) should develop that further. We shall see what the rest of this year brings but a gradual tightening of lending and a growth in specialist providers would appear to be the current trend
Monsoon disgrace
Whilst it is probably impossible for any government to legislate over payment terms the issue of “retrospective discounts” has become a very unpleasant trend in recent years is perhaps an area which could be ruled illegitimate?
See here on James Hurley’s excellent blog
In a nutshell Monsoon have informed suppliers towards the end of last year that “all invoices received for payment are subject to a 4pc deduction”
and
One of its suppliers, who asked to remain anonymous, said the demand was coupled with an extension to payment terms from 60 days to 90
It goes without saying that this is disgusting behaviour and even in the event of a business fighting for survival it would be hard to justify. But when you see that Monsoons profits last year were £100m…..
Bad PR
Here’s a conundrum. How does a public relations company go bust? You may wonder why i ask that question but having worked in the PR industry for a number of years, this has aroused my interest
Simply put, I still find it remarkable that firms supplying professional services can find themselves in such difficulties, but we continue to do so. This is not because “professional” services should be assumed to be more, well professional, than industry in general but more because their costs should be very manageable. All they are supplying is time and people. To lose control you have to have been in a situation whereby you had plenty of staff sitting on their hands all day
Admittedly there are other factors such as getting into laughably expensive office leases (Halliwells) or a complete mismanagement of debtors (Vantis) but neither is excusable
Improvement in sight?
Insolvencies were down in January to 0.6% of total businesses. Apparently this is the lowest figure for five years. Good news? Probably, but perhaps we really need to see the trend over a quarter or more. On the other hand, retail sales were surprisingly high in February and the US stock market has hit its highest ever level.
http://businessmoneynews.net/index.asp?ItemID=2118&rcid=75&pcid=69&cid=75
The green shoots of recovery perhaps
Lend me some money
>
The UK banks are certainly not responding to the governments supposed pressure and incentives towards extending lending. As ever they will blame the lack of applications that “meet the criteria” whilst the those applying will have a different take on things
A difficult one to call maybe but perhaps this quote neatly summarises
Capital Economics UK economist Martin Beck says: “There is still this issue of whether the demand for loans is still there. It is all very well to make it cheaper for households to borrow money but if they do not want to then the FLS is unlikely to have the impact the Bank is hoping for. We are in an economy where households are heavily indebted and looking to reduce this burden. Firms are equally reluctant to borrow because consumer demand is so weak.
The article this is taken from also includes a table of how each bank is lending ( see here) and my question would be why, if the above factors are consistent, there is such divergence across the lenders? The state owned banks are highlighted as the main culprits.
As a broker for business finance I will have my own take on these matters but will accept that my sample of experiences is going to be pretty small compared with the total market of course. But I can certainly confirm that the market is interesting…
What is the solution? The great difficulty is that lending is determined by assessment of risk and given that there are so many criteria involved, it is impossible for an outside party to dictate who should lend to who and when. The power remains with the lenders
New article
In the very readable and recommended New Business magazine
And also in my download articles. See Tab above
Cpcmcredit Blog 