Companies That You Expect to Disappear Soon

[Peter Sarf]

With all these food businesses going under, presumably it will be a good time to start a new business once demand returns, which it will.

The only catch is I think the delivery firms are doing very well as a result of COVID-19. I can imagine that most customers will not go back to eating out. Add in the fact that, by now, customers will have discovered that any alcohol required can be bought cheaper at the supermarket and there is now a temptation to eat + drink at home. That is unless the restaurant is very special. I won't be sorry if the big chains dwindle and get replaced with more individual family run businesses.

 

[John Griffiths]

But it always has been cheaper to eat at home. Eating out feels luxurious, and no washing up (unless you forget your wallet or purse).

 

[Peter Sarf]

But it always has been cheaper to eat at home. Eating out feels luxurious, and no washing up (unless you forget your wallet or purse).

I know. But I think people will have been reminded of the difference in cost. Furthermore I think many of those now using delivery services instead of restaurants might not have used delivery services before. They will be the 'new converts' who might not go back easily. That is especially true until social distancing has completely gone.

For me the routine visit to Wetherspoons to meet my friends on a Saturday night did not happen yesterday. None of us wanted to bother. I checked. My most optimistic view is that we will see how it goes in a few weeks time. But for now I think it will be too busy to be practical. I have not checked the news to see what it was actually like though.

 

[trebor79]

The only catch is I think the delivery firms are doing very well as a result of COVID-19. I can imagine that most customers will not go back to eating out. Add in the fact that, by now, customers will have discovered that any alcohol required can be bought cheaper at the supermarket and there is now a temptation to eat + drink at home. That is unless the restaurant is very special. I won't be sorry if the big chains dwindle and get replaced with more individual family run businesses.

I agree, broadly. I think eating out will go back to what what it was 20+ years ago - an occassional treat for a special occasion. Fewer restaurant visits, but probably a bigger spend on the visits that do happen. Annihilation of most of the chains serving fast food dressed up as proper nosh. Not a bad thing really.

 

[Tetchytyke]

The names of businesses mentioned over the past few pages - Chiquitos, Bella Italia, Frankie and Bennies - are closing for the same reasons Prezzo is closing, and why Jamie Oliver's ventures closed.

The awkward truth is that many of these chains are (or were until Covid) fundamentally profitable. It isn't that people have deserted them. It's the leveraging.

As we see time and time again, PE loads the purchase price on the company as debt. Lenders are, time and time again, light on covenants and light on making the PE put real collateral in. The assets secured by covenants are, largely, nebulous things like "goodwill"; PE strip out any asset of real worth.

The interest payments drown the company, not the underlying profitability of the business.

It's obvious the banks have learned nothing since 2006. Credit Crunch II, Return of the Sleazy Fat Cat Bankers, coming soon to an economy near you.

I'm going to add HSBC to the list of companies I expect to see disappear soon.

 

[Peter Sarf]

I agree, broadly. I think eating out will go back to what what it was 20+ years ago - an occassional treat for a special occasion. Fewer restaurant visits, but probably a bigger spend on the visits that do happen. Annihilation of most of the chains serving fast food dressed up as proper nosh. Not a bad thing really.

In bold - you have reminded me of something.

Remember "Noodle Time". My girlfriend told me the noodle dishes must be made up from a packet of dried noodles. She had some packets and showed me the result. I could not spot the difference. She then added some of her own herbs and spices and improved on Noodle Time. She said it would be very strange if the noodles were in fact freshly made - they are bound to be dried. Bit like the chances of encountering freshly made pasta !. I used to pass the place regularly and started recognising the boxes of noodles in packets. Seen in Wing Yip (Chinese supermarket). So, in conclusion, money for old rope !.

 

[LOL The Irony]

I'm going to add General Motors in it's present form. The only survivors will be the Corvette, the Camaro, Cadillac, GMC and their large SUV's.

 

[Peter Sarf]

I'm going to add General Motors in it's present form. The only survivors will be the Corvette, the Camaro, Cadillac, GMC and their large SUV's.

Interesting. I don't suppose there is much of a presence in the UK nowadays as Vauxhall (well Opel really) is no longer owned by General Motors. But car manufacturing in the US has changed a lot. From big petrol guzzlers designed to last a few years to cars that last as long as they do in Europe. The old guard might well be left behind.

 

[Dai Corner]

Walking round local shopping centres I consistently found queues outside Primark, Home Bargains, Poundland, Greggs and Wilko. These are off my 'at risk' list. Other High Street shops are on it.

 

[Peter Sarf]

Walking round local shopping centres I consistently found queues outside Primark, Home Bargains, Poundland, Greggs and Wilko. These are off my 'at risk' list. Other High Street shops are on it.

Oh yes of course. That really is a simple way of measuring it. Sadly you are correct.

A few exceptions maybe. I just opened a bank account at Metro Bank because they are open longer hours and did not have much of a queue outside.

 

[Iskra]

The awkward truth is that many of these chains are (or were until Covid) fundamentally profitable. It isn't that people have deserted them. It's the leveraging.

As we see time and time again, PE loads the purchase price on the company as debt. Lenders are, time and time again, light on covenants and light on making the PE put real collateral in. The assets secured by covenants are, largely, nebulous things like "goodwill"; PE strip out any asset of real worth.

The interest payments drown the company, not the underlying profitability of the business.

It's obvious the banks have learned nothing since 2006. Credit Crunch II, Return of the Sleazy Fat Cat Bankers, coming soon to an economy near you.

I'm going to add HSBC to the list of companies I expect to see disappear soon.

Why, might I ask? I thought the banks now had stricter rules on lending, risk they can take and the amount of cash they have to keep in reserve?

Interested as I currently have shares in HSBC...

 

[Busaholic]

Walking round local shopping centres I consistently found queues outside Primark, Home Bargains, Poundland, Greggs and Wilko. These are off my 'at risk' list. Other High Street shops are on it.

It says a lot about the state of the economy that these 'bargain basement' stores appear to be doing well, although I guess they each need loads of customers to survive in the long term. Business rate revaluation for shops (downwards, big time) can't come soon enough now.

 

[Peter Sarf]

It says a lot about the state of the economy that these 'bargain basement' stores appear to be doing well, although I guess they each need loads of customers to survive in the long term. Business rate revaluation for shops (downwards, big time) can't come soon enough now.

I fear councils won't consider that until it is too late - when the footfall on the high street has fallen to such a level that very little can be viable.

 

[Tetchytyke]

Why, might I ask? I thought the banks now had stricter rules on lending, risk they can take and the amount of cash they have to keep in reserve?

Interested as I currently have shares in HSBC...

I think most banks have relaxed their attitude to risk, and package risky financial strategies up as lower risk to unsuspecting investors. Sound familiar? The way they are doing it now is by putting such a high weight on intangible assets.

Why HSBC? Regardless of where their official HQ is, the first three initials of their name mean they're going to have some tough decisions to make: you can't sit on the fence with Xi Jinping.

 

[Tetchytyke]

I fear councils won't consider that until it is too late

Councils are in a terrible bind. They can't reduce business rates because they can't afford to, even if they want to. Councils are heavily reliant on business rates revenue. Add in the fact that landlords are liable for business rates on empty properties after 3 months, and you can see why we are where we are.

The resolution has to come from government, but I can't see Tory policy changing after ten years. Government needs to fund business rates relief. There's more chance of the devil skiing to work.

 

[Busaholic]

I fear councils won't consider that until it is too late - when the footfall on the high street has fallen to such a level that very little can be viable.

Only the government (through HMRC) can effect change: it's already too late imo.

 

[Mojo]

The other week John Lewis said that some of its shops would not reopen after the government enforced closures. These shops have now been announced as the smaller "At Home" shops in Croydon, Newbury, Swindon and Tamworth, two travel hub outlets at Heathrow and St Pancras. And perhaps more significantly the anchor shop at the New Street station redevelopment in Birmingham, as well as the shop in Watford.

 

[birchesgreen]

Really surprised that Grand Central JL is closing, not that its ever seemed that busy but it was still fairly new. No surprise about the Tamworth one though.

 

[superjohn]

Really surprised that Grand Central JL is closing, not that its ever seemed that busy but it was still fairly new.

Debenhams in the Bullring too. On the occasions I had passed through the Bullring and Grand Central in pre-Covid times they were very busy. If they can‘t make it work in a setting like that I doubt they have a long term future at all.

It will be interesting to see what happens to the empty shops. The multiple floors will doubtless be separated into self contained units but they may still struggle to fill them. All the usual takers for such large spaces already have a presence in the centre of Birmingham.

 

[nlogax]

The Newbury JL closure is no surprise at all. I'm amazed its Debenhams has survived the chop. Newbury feels very quiet bordering on deserted during the weekdays I've been working there.

 

[Busaholic]

The other week John Lewis said that some of its shops would not reopen after the government enforced closures. These shops have now been announced as the smaller "At Home" shops in Croydon, Newbury, Swindon and Tamworth, two travel hub outlets at Heathrow and St Pancras. And perhaps more significantly the anchor shop at the New Street station redevelopment in Birmingham, as well as the shop in Watford.

How ironic that Andy Street, long time boss of JL, quit that job to (successfully) run for West Midland's Mayor. Now JL have no presence in WM under that name?

 

[Smethwickian]

Now JL have no presence in WM under that name?

Yes they do, in Solihull's Touchwood Centre.

 

[jfollows]

JL is a company whose reputation has taken a dive over recent years, so this current problem is probably only exacerbating its decline. I used to use them without question because of their excellent reputation, and pay extra for the reassurance, but now I think the extra money would be wasted.

Although I haven't been to a shop since mid-March, again that's only a slight decline from my previous habit. But many of the stores mentioned here have put me off already, well before Covid-19, by appearing to appeal to a different sort of person, usually one who wants to waste time in a shop. I didn't mind JL as much as other stores, but I'm not sure I'll be patronising them again.

 

[Doomotron]

Atari are releasing a £300 game console that is barely as powerful as an old mobile phone, so even though the console's not made by Atari, it might bring it down with it.

 

[Tetchytyke]

I used to use them without question because of their excellent reputation, and pay extra for the reassurance, but now I think the extra money would be wasted.

JL outsourced much of their customer services function, including orders and deliveries, to Capita and Sitel. They've just moved a load of contact centre jobs to Manila.

Needless to say, JL are now woeful for anything you can't pick up and take out of the shop with you. There's no way I'd buy a big ticket item from them.

As always, it shows that outsourcing costs money instead of saving money.

 

[37424]

The shift to online retail in the last few years has been immense and the virus has pushed it massively further. I expect the closures we are seeing now are just the tip of the iceburg of what is to come in the next 12 months and long overdue, those that have not adapted will be in big trouble. For me about the only things i need to see in person would be a Car or a House for most everything else now I will just buy online. Of course for those that loose their job its not good but we need to try and get back to making things more rather than made in China although that will not be easy given the cost of actually getting anything done in country.

 

[cactustwirly]

I don't think it has been mentioned yet that TM Lewin announced that they would be closing all of their stores and going online only.

We should also find out soon which branches of John Lewis won't be reopening.

The Reading John Lewis hasn't yet reopened...

 

[cactustwirly]

JL outsourced much of their customer services function, including orders and deliveries, to Capita and Sitel. They've just moved a load of contact centre jobs to Manila.

Needless to say, JL are now woeful for anything you can't pick up and take out of the shop with you. There's no way I'd buy a big ticket item from them.

As always, it shows that outsourcing costs money instead of saving money.

I bought my phone from John Lewis in the Autumn, it wasn't in stock at the time but I could collect it from the same store the very next day. I have no complaints.

 

[Non Multi]

The Reading John Lewis hasn't yet reopened...

Heelas opens again on July 30th.

 

[Cowley]

The Newbury JL closure is no surprise at all. I'm amazed its Debenhams has survived the chop. Newbury feels very quiet bordering on deserted during the weekdays I've been working there.

One of our girls has (had) a part time job in the Costa in Debenhams in Exeter.
To be fair to Costa they seem to treat their staff really well, but I advised her a couple of months ago to try and find another job in case Debenhams goes straight to the wall after all this and Costa don’t have any other vacancies nearby.
Thankfully she’s starting work in a group home working with people with learning disabilities next week (the same place that one of her stepsisters works at occasionally), and I think it’ll do her some good working in that field for a while.