Companies That You Expect to Disappear Soon

Meerkat · 4 Apr 2020

There is no one to guarantee John Lewis though.
Mike Ashley can guarantee House of Fraser even if they were trading insolvently.
If John Lewis went insolvent how would they recapitalise, presumably they can’t do share offers?
You are right that Waitrose gives them Cashflow for the moment.

How are the supermarkets doing? Panic buying would have been a windfall and more eating at home raises demand but queuing must be reducing sales (if you have to queue you won’t go as often so you will buy less discretionary stuff).

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Peter Mugridge · 4 Apr 2020

PG said:
are any courier/delivery firms likely to lose enough critical mass that then jeopardises their own existence?

We've been using couriers more than usual recently for work because of this virus stuff. With many people confined to barracks and doing online shopping couriers are probably in a very good position right now - as long as their drivers don't all start having to isolate at once.

richw · 4 Apr 2020

PG said:
You reap what you sow!

On the flip side - are any courier/delivery firms likely to lose enough critical mass that then jeopardises their own existence?

House of cards, tumbling dominoes etc....

couriers are so busy right now with everyone home delivery everything they can afford to be picky who they work for

DavidGrain · 4 Apr 2020

Mentioning couriers, Waitrose have the advantage that they can keep up deliveries of groceries because John Lewis drivers have been redeployed to drive for Waitrose.

RichT54 · 4 Apr 2020

I wonder if Waitrose regret the recent closure of some of their stores, given the demand there has been for supermarkets during the current crisis?

The Sandhurst Waitrose was one of the stores they closed. It had previously been a Safeway and then Morrisons, but they all struggled due to the nearby Tesco Extra and M&S superstores. I didn't use it much for food or groceries, but it was handy for John Lewis Click & Collect. Apparently part of the store is now going to become an Aldi and the remainder will become a gym!

krus_aragon · 5 Apr 2020

RichT54 said:
I wonder if Waitrose regret the recent closure of some of their stores, given the demand there has been for supermarkets during the current crisis?

Two branches of Poundstretcher closed in my area roughly a month ago. Their management will surely have been kicking themselves, given the huge displays of toilet paper and towelling they had!

talltim · 5 Apr 2020

Kath Kidston is reported to be going under. To tell the truth I’m surprised they lasted this long. They very successfully created a trend, but when it had run its course they had nowhere to go

Typhoon · 5 Apr 2020

krus_aragon said:
Two branches of Poundstretcher closed in my area roughly a month ago. Their management will surely have been kicking themselves, given the huge displays of toilet paper and towelling they had!

I don't quite get Poundstretcher. I go in there from time to time but never buy much (under a fiver, almost invariably) - too much tat, stuff out of date (I suspect because no-one wants it). The nearest branch seems to have a massive turnover of staff, I don't think I have seen the same staff member twice. Hardly any staff visible. Last time, there were two, and one was outside having a fag!
Maybe, as you've implied, senior management isn't up to it!

krus_aragon · 5 Apr 2020

Typhoon said:
I don't quite get Poundstretcher. I go in there from time to time but never buy much (under a fiver, almost invariably) - too much tat, stuff out of date (I suspect because no-one wants it).

One of our closing branches had over a hundred 2019 advent calendars in the far corner of the store, for which they were still asking 25p each!

They'd have gotten far more money by reducing them to 10p (or even 5p!), and placing a stack of them near the tills. I suppose the local mangement either didn't have the initiative (or authority) to deviate from the prices set by head office.

Typhoon · 5 Apr 2020

krus_aragon said:
One of our closing branches had over a hundred 2019 advent calendars in the far corner of the store, for which they were still asking 25p each!

They'd have gotten far more money by reducing them to 10p (or even 5p!), and placing a stack of them near the tills. I suppose the local mangement either didn't have the initiative (or authority) to deviate from the prices set by head office.

It doesn't surprise me. I guess there were no chocolates behind the windows! At my local branch, either the store management are permanently in hiding or it was the bloke outside having a fag. The youth on the tills was about 18 and he called me 'Amazing!' for thanking him for going out his way to help a particular customer. He won't last long!

61653 HTAFC · 5 Apr 2020

Typhoon said:
I don't quite get Poundstretcher. I go in there from time to time but never buy much (under a fiver, almost invariably) - too much tat, stuff out of date (I suspect because no-one wants it). The nearest branch seems to have a massive turnover of staff, I don't think I have seen the same staff member twice. Hardly any staff visible. Last time, there were two, and one was outside having a fag!
Maybe, as you've implied, senior management isn't up to it!

I think they got overtaken by the advent of the pound shops. They predate them by decades and never were one, but their name suggests they are- so I think new customers went in expecting one thing and not getting it. They rebranded many stores as "InHouse" but didn't update anything else, so ended up being a crappy version of Wilko.

richw · 5 Apr 2020

krus_aragon said:
One of our closing branches had over a hundred 2019 advent calendars in the far corner of the store, for which they were still asking 25p each!

They'd have gotten far more money by reducing them to 10p (or even 5p!), and placing a stack of them near the tills. I suppose the local mangement either didn't have the initiative (or authority) to deviate from the prices set by head office.

Poundland had them by tills for 25p each. My kids wanted some chocolate one day in town so they had one of them each. Beat value chocolate anywhere that day in town

The Lad · 5 Apr 2020

Where have all the cars gone, the acres of cars for sale at dealerships are bereft of vehicles so where are they?

richw · 5 Apr 2020

The Lad said:
Where have all the cars gone, the acres of cars for sale at dealerships are bereft of vehicles so where are they?

I’ve noticed that here too, forecourts empty. I’m wondering how many have them on sale or return and they’ve returned?

Meerkat · 5 Apr 2020

richw said:
I’ve noticed that here too, forecourts empty. I’m wondering how many have them on sale or return and they’ve returned?

Or they have gone to their secure compounds to reduce the theft risk.

Whistler40145 · 5 Apr 2020

Meerkat said:
Or they have gone to their secure compounds to reduce the theft risk.

That’s a possibility, reducing the insurance risk

Tetchytyke · 5 Apr 2020

The Lad said:
Where have all the cars gone, the acres of cars for sale at dealerships are bereft of vehicles so where are they?

In secure storage, I would guess.

talltim said:
Kath Kidston is reported to be going under.

Another business which is fundamentally profitable but has been loaded with debt by its private equity owners.

The sooner they do something about private equity dumping the debt from leveraged takeovers on the businesses they bought, the better. It's just legalised asset stripping.

DavidGrain · 5 Apr 2020

I bought a new car 18 months ago which means that I get regular emails from the dealer offering to sell me another car. At the start they announced that they were closing all their branches until further notice but that staff would be available online or on the phone. Last email I had a few days ago said that they still had their second hand cars for sale. New cars these days are made to order. It is not like the old days when dealers were given an allocation every month and you could take a new car out of stock and drive it away the same day.

Dai Corner · 5 Apr 2020

DavidGrain said:
I bought a new car 18 months ago which means that I get regular emails from the dealer offering to sell me another car. At the start they announced that they were closing all their branches until further notice but that staff would be available online or on the phone. Last email I had a few days ago said that they still had their second hand cars for sale. New cars these days are made to order. It is not like the old days when dealers were given an allocation every month and you could take a new car out of stock and drive it away the same day.

When I bought a new car a couple of years ago I was allocated one which was on a ship at the time.

Iskra · 5 Apr 2020

Tetchytyke said:
In secure storage, I would guess.

Another business which is fundamentally profitable but has been loaded with debt by its private equity owners.

The sooner they do something about private equity dumping the debt from leveraged takeovers on the businesses they bought, the better. It's just legalised asset stripping.

Totally agree. It's the staff that get screwed over. It's also a massive tax dodge too. The company will be essentially trading profitably, but on paper makes a loss, taxes are paid on profits but subsequently there are none. Meanwhile the holding company is making a fortune and is registered in a tax haven somewhere.

DavidGrain said:
I bought a new car 18 months ago which means that I get regular emails from the dealer offering to sell me another car. At the start they announced that they were closing all their branches until further notice but that staff would be available online or on the phone. Last email I had a few days ago said that they still had their second hand cars for sale. New cars these days are made to order. It is not like the old days when dealers were given an allocation every month and you could take a new car out of stock and drive it away the same day.

5 years ago, I went and bought a new car and drove away with one the same day. I guess I got lucky, I got a good deal as they wanted to shift it, but I had to take what was available from their more limited stock available that second, but it was cheaper than cars to order and with a better spec. It's worth trying.

However, on my most recent car I had to order it to my specification from the factory in Germany and wait for it to be shipped, so I got a lot more choice but had to wait.

Top tip; try get your new car in Jan/Feb as you can get a great deal then as not many people are buying at that time of year.

cactustwirly · 5 Apr 2020

DavidGrain said:
I bought a new car 18 months ago which means that I get regular emails from the dealer offering to sell me another car. At the start they announced that they were closing all their branches until further notice but that staff would be available online or on the phone. Last email I had a few days ago said that they still had their second hand cars for sale. New cars these days are made to order. It is not like the old days when dealers were given an allocation every month and you could take a new car out of stock and drive it away the same day.

It depends on the manufacturer and spec you choose.
If you're after a Vauxhall Corsa for example, 99% go for a 1.2 SXi with very few options, therefore the dealer is very likely to have the car you want in stock.
But if you wanted a 1.4 Design with options like climate control, then you'd have to wait for a slot to become available and it to be custom made in a factory as it is "non-standard"
For manufacturers like BMW, Volvo, Mercedes etc, most people specify their cars differently, so waiting for your car to made is normal.

Typhoon · 5 Apr 2020

Iskra said:
Totally agree. It's the staff that get screwed over. It's also a massive tax dodge too. The company will be essentially trading profitably, but on paper makes a loss, taxes are paid on profits but subsequently there are none. Meanwhile the holding company is making a fortune and is registered in a tax haven somewhere.

Staff, taxpayers, council tax payers (loss of Business Rates, need to develop a flagging High Street), even pension holders (many properties are held by Pension Funds) are losers.
Who gains - a few, already rich individuals who contribute nothing to society. Gambling with the livelihoods of others. They probably pay less tax than I do.

Meerkat · 5 Apr 2020

Tetchytyke said:
Another business which is fundamentally profitable but has been loaded with debt by its private equity owners.

The sooner they do something about private equity dumping the debt from leveraged takeovers on the businesses they bought, the better. It's just legalised asset stripping.

That is the populist view, but I am not wholly convinced. It’s just business, borrowing money and paying for it from profits.

Whistler40145 · 5 Apr 2020

Which Airlines are likely to fold?

Tetchytyke · 5 Apr 2020

Meerkat said:
It’s just business, borrowing money and paying for it from profits.

It's not really, though, is it? It's not the business borrowing to raise capital for growth.

Dumping the debts from a leveraged takeover on the thing you've just bought is asset-stripping. It's taking the value from the business and transferring it to yourself, at no risk to yourself.

And, as so often happens, when the debts cause the business to fail, it's the National Insurance Fund and the Pensions Regulator who have to pick up the pieces.

cactustwirly · 5 Apr 2020

Whistler40145 said:
Which Airlines are likely to fold?

Virgin Atlantic, Norwegian, Jet2, TUI

IAG (BA, Aer Lingus etc), Ryanair and easyJet look to be safe for now, they're relatively rich and had good cash flow.

Whistler40145 · 5 Apr 2020

cactustwirly said:
Virgin Atlantic, Norwegian, Jet2, TUI

IAG (BA, Aer Lingus etc), Ryanair and easyJet look to be safe for now, they're relatively rich and had good cash flow.

Surely Sir Richard Branson wouldn't see his airline fold

R G NOW. · 5 Apr 2020

I hope M - S don't go as they supply a lot of my underwear and some clothes.

Whistler40145 · 5 Apr 2020

R G NOW. said:
I hope M - S don't go as they supply a lot of my underwear and some clothes.

Same here, plus quality food

Meerkat · 5 Apr 2020

Tetchytyke said:
It's not really, though, is it? It's not the business borrowing to raise capital for growth.

Dumping the debts from a leveraged takeover on the thing you've just bought is asset-stripping. It's taking the value from the business and transferring it to yourself, at no risk to yourself.

And, as so often happens, when the debts cause the business to fail, it's the National Insurance Fund and the Pensions Regulator who have to pick up the pieces.

There is risk to the PE folk, the banks wouldn’t be involved otherwise.
And if it was so risk free everyone would be doing it.

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