RCM Weekly review for January 2019 - Week 3
Continued retail woes.
Continued closures on the high street as M&S announce 17 stores and 1000 jobs to go.
Paperchase call in KPMG to advise on restructuring options as shoppers have veered away from the high street. Options include entering a CVA to reduce their high street presence.
More store closures imminent? Debenhams recently posted a poor Christmas trading update. They are currently holding discussions to refinance its £320m revolving credit facility. New Look announced it reached an ‘in principle’ debt-for-equity swap proposal with key stakeholders in order to reduce its debt from £1.35bn to £350m. Today (18th January) New Look Belgium have filed for insolvency.
Store openings decline and closures accelerate in 2018
Source: Local Data company 2018
January and February are generally slow months across most sectors in the economy, particularly the retail sector. The consumer spending drought after the lead up to Christmas and the post-Christmas sales leaves a lot of retail businesses vulnerable as the bills still need to be paid. So, if you’re a retailer heading into this slow period with poor cash flow and low reserves, it will be especially difficult. If you’re struggling, It’s important to seek advice as early as possible to stand a chance of saving your business. If the business is not sustainable and cannot be saved, it’s better to accept this and cut any losses earlier rather than later. Early intervention is the key.
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