Archive

Archive for April, 2016

Philip Green. No choice

Philip Green has just taken delivery of a 100m yacht. His third. Apparently his wealth totals somewhere close to 3.2 billion

It was rightly suggested in the Times today that he has to make good a big chunk of the pension deficit at BHS. A figure of 200m was suggested

Its quite simple. If he does so then there will be a feeling that as shoddy as this whole business has been, we can move on. If he doesn’t then this will confirm the impression that he’s a greedy repellant character who should be shunned and despised. He doesnt need the money of course

But as I stated previously, capitalism has a responsibility to present the right face to the world and not simply be viewed as grasping and souless. This is vital with such a growing feeling of dislocation from the general population and the superrich as well as their hangers on.

We shall see which way this blows. I am not optimistic

 

 

 

 

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BHS Questions to answer

bhs-sale

The failure of BHS has raised a number of questions which could impact future business “reorganisations”.

  1. The extraordinary dividends taken by Philip Green and his family. Rightly many will ask how and why?
  2. Naturally many will conclude that if the dividends had been less in the billions but more in the millions, reinvestment in the business could well have led to the required transformation
  3. The pension gap. Its difficult to dispute that it is a disgrace that the previous owner can take a billion or so out in cash and leave the pension pot dry
  4. What is the psychology of someone who is simply grotesquely greedy for cash he can never spend and yet attracts genuine dislike?
  5. The sale included fees paid to the buyer. 25m in fact. This stinks
  6. The buyer has been described as a “buffoon” and has an awful track record. Apparently he was telling suppliers he could “fix the credit insurance issues”. A statement that in itself lost him any credibility

The free market should be free but it should also have self awareness. That has been sadly lacking in many recent business failures and the behaviour of certain so called entrepreneurs. The result of this could be a significant backlash and that could even lead to the politics and government that would be very unwelcome in the business community

Philip Green and the likes need to shape up and think hard about their actions and attitudes.

Greed is not good. It is ugly and demeaning

 

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The three day week?

This story has rightly caught the headlines. It would appear that the optimum working week for over 40s would be around 25 hours if they wish to maintain strong productivity and capability into later life.

I can certainly see the logic and one of the most striking results was that those that work more than 60 hours a week are less able than those who loaf all day doing absolutely nothing. Totally agree. In my past office life I never once came across a effective or particularly intelligent workaholic.

Of course the big question here is what manifests itself as “work”. Is work stressful and draining if its something you truly enjoy and can manage at a pace that suits?  Rather smugly I will state that this is largely my situation. Also I believe that its the sheer politics of office life which gradually wear even the strongest characters down, not just the workload.

I have a great deal of experience of happily managing teams in offices. I like to think that i was effective and I also drove people towards the objective and simply getting the job done and getting out bang on time. The reason? Because I simply wanted fresh motivated the next day rather than someone who hung around to nine o clock to impress some second rate boss.

If the above survey drives industry towards appreciating and understanding that it is the work completed and not the hours spent that is the key, then progress will be made

Alternatively they could simply ask anyone who is self employed

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The worst bank

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This is from an american survey but interesting all the same and there are some very familiar names

Dreadful article on Steel

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Perhaps its simply a case of “only in the Guardian” but it is extraordinary that supposedly serious journalists can write this drivel

The whole premise of the article is that the UK would suffer a “devastating” economic blow if the steel industry closed. Firstly the industry is not closing down. Much of it is profitable and relatively safe. What the lazy author does not highlight is that it is a very diverse industry with only certain sectors under immediate threat

Secondly this nonsense about the whole economy being brought to its knees with the loss of a few thousand jobs is truly ridiculous. Last year 3000 jobs were created daily in the uk. Give the economy a week…

And of course she completely fails to open up the other side of the equation which is clearly the “effect on the economy” of the government pumping in an endless subsidy

This is far from being a political post from me and I have full sympathy for those who’s jobs are on the line. As I would in any sector.

But lazy arguments by unskilled highly paid journalists are deliberately misleading and of no use to anyone

More on the assignment ban

My previous post has aroused quite a bit of interest on linkedin and I think many may well be asking why this clause existed in the first place. Surely it has no bearing at all on the effectiveness of the client’s contract?

The reason is down to a rather old fashioned view of invoice financing. The perception has often been that invoice financing was borrowing of “the last resort” and therefore any supplier seeking this form of financing was not seen as a safe credit risk

That is of course rubbish. It was far from true across the board even a good few years back when “factoring” was relatively expensive but now that it is by far the most prevalent tool for working capital finance and used by businesses with even the strongest balance sheets, it is an even more outdated perception.

This was especially frequent in the construction industry and i know of one subcontractor that was fired from a million pound contract for this very reason. Ridiculous of course

The ban is welcome. Yes there may be a technical point or two that has passed me by which has driven a blue chips in house lawyer,  with an empty day at the office, to find a reason to justify is or hers salary but the government has struck the right note here.

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Ban the Ban on assignment

Just about the most ridiculous clause that is habitually found in debtors contracts is the “ban on assignment” . This effective prevents a supplier from raising finance on their invoicing

What business that is of the debtor is beyond me. Simply put it is a clause for the sake of a clause and quite frankly outmoded and rather ridiculous in this day and age when the raising of finance is most frequently carried out on the back of a suppliers invoices.

Fortunately the Government has taken a good look at this and soon the legislation to bar this clause will come into play

http://www.shoosmiths.co.uk/client-resources/legal-updates/receivables-finance-ban-on-assignment-legislation-10706.aspx

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