What are the main business and insolvency stories this month?
With the announcement of the roadmap out of lockdown and the Chancellor’s Spring Budget imminent something definitely feels different about the time of year.
Along with lighter nights and mornings, it feels like 2021 is finally about to get going.
Especially now businesses in every sector at least have a rough guide to when they can reopen their doors and begin trading again if they’ve stopped during lockdown.
This increase in certainty will both focus minds and give business owners and directors a focus for these next few weeks before they can get on with the real business of serving customers again and returning to profitability.
All of this takes precedence over all the insolvency and administration news that’s happened this month but as usual, while you’re doing your job, we’re doing ours and gathering the most important and intriguing news that’s happened in one convenient place!
Dune
The famed footwear manufacturer and seller formally launched a Company Voluntary Arrangement (CVA) as it has been “affected significantly by the impact of lockdown measures on customer footfall across its sites”.
Dune has 43 standalone stores and an additional 175 concessions employing over 1200 staff but no stores or jobs are believed to be at immediate risk.
The arrangement is aimed at moving several stores to a turnover based rent model which would give the company flexibility in the short term.
Prezzo
Restaurant chain Prezzo was bought in a pre-pack deal in December by new ownership Cain International who have had to make some unwanted but necessary changes.
They confirmed that 22 of their restaurants would remain closed for good with the loss of 216 positions.
Jonathan Goldstein, chief executive of Cain said: “We firmly believe that strong hospitality businesses such as Prezzo have a bright future and will play an essential role in reviving the UK economy.
“However, to do so, we must get through this current crisis of mounting liabilities and no revenues. We’re deeply sorry for all those affected by the permanent closure of the 22 non-viable restaurants.
“It was a difficult but essential decision to take but doing so will allow us to save thousands of jobs and create more in the future.”
GAP
As we go to press it’s being reported that GAP, the American casual clothes store, is drawing up plans to close its 95 UK stores and move to an entirely online operation – following in the footsteps of Arcadia and Debenhams.
In the last available figures up to February 2020, they saw a 9.5% reduction of sales – before the lockdown was instituted so it would be a fair assumption that the following 12 months figures would be even worse.
Caffe Concerto
The patisserie chain with 20 sites all across London launched a CVA which would help reduce its growing rent debts.
Director Stephano Borjak said they had no option as landlords had lodged a legal action over unpaid rent after one of their landlords filed County Court claims against them.
While there are currently restrictions based on creditor actions such as winding-up petitions and statutory demands, these will likely cease sometime this year, allowing action to continue.
A CVA automatically provides protection against creditor actions regardless of wider suspension so is always a good option for any business looking to get its financial house in order without the threat of legal actions.
Genting Casinos
Casino owners, Genting have officially announced the final closure of their Southport Casino this month with the loss of 38 permanent positions.
It joins previous locations in Margate, Torquay and Bristol citing the negative effects of the Covid-19 pandemic on physical gambling.
St George’s Shopping Centre
It’s not just the tenants that are suffering during the downturn – landlords are facing real consequences too.
The 280,000 sq ft St George’s Shopping Centre in Preston has been placed into administration by its owners after defaulting on a loan secured against it.
This is the ninth shopping mall in the UK to go into administration in the previous four months, not including the largest UK mall owner, Intu Properties, that went into administration itself in June 2020.
As we’ve previously mentioned, landlords are also currently halted from pursuing creditor action against tenants that have not been paying rent yet still have to service their own debts.
This is one group that will be looking forward to a better 2021.
It could still be a good year for your business
It might be difficult to read lots of positive articles looking ahead to the lockdown being lifted if you feel that your business’ material circumstances and future situation won’t really change.
There is still a lot that has to happen this year to help companies trade again and be successful and there’s no guarantee that they will happen or that there will be no future infection spikes or even, in the worst case scenario, more lockdowns.
One positive action that all businesses can take – right now – is to get in touch with us for some free impartial advice regarding strengthening your business and your balance sheet.
The time is perfect to look at what your business needs and start implementing it with our guidance during these next critical few weeks before there’s any significant change in restrictions.
So when the shackles are eventually released, you’ll have a stronger, leaner, lighter version of your company to grasp the opportunities that will come.