The mounting economic fallout from the coronavirus crisis is has seen a string of big names getting into financial trouble as cash flow dries up.
Laura Ashley has filed for administration blaming the coronavirus outbreak as a deal breaker in rescue talks.
Carphone Warehouse has blamed the change in how people buy mobile phones rather than the virus for closing its 531 standalone stores next month throwing 2,900 people out of work.
Alex Baldock of the company said consumers were increasingly buying online and from its big stores – which sell computers and TVs as well as mobiles – instead of its smaller, standalone mobile shops.
He said: “They can’t find all this in the small mobile-only stores that are one-twentieth of the size; they’re visiting these less and these stores are losing more money as a result.”
The retailer has shops inside 305 big PC World and Curry’s stores, and these will be not affected by the changes said Alex Baldock.
Writing in Building Hamish Champ reported on the construction giant Costain’s drop in value due to the coronavirus crisis. He reported: “Shares in Costain slumped a whopping 40% this morning, valuing the troubled contractor at just £38m, as fears around the impact of the coronavirus epidemic shook investor confidence to the core. The group’s shares were trading at 35p at the time of writing, but have been falling in value since last week, when it announced it had slumped into the red in 2019, revealing pre-tax losses of nearly £7m.”
Reuters are reporting on the plight of airlines. They said the owner of British Airways and easyJet, Europe’s no.3 and no.4 airlines, said they would ground aircraft on an unprecedented scale in a battle to survive the travel restrictions and European lockdowns now convulsing the industry. Meanwhile Virgin Atlantic are also in crisis laying off staff on unpaid leave and asking the Government for a multi billion pound bail out.
“European aviation faces a precarious future and it is clear that coordinated government backing will be required to ensure the industry survives and is able to continue to operate when the crisis is over,” easyJet’s CEO Johan Lundgren said in a statement.
Retail Week’s Grace Bowden reports: “H&M will temporarily close hundreds of stores across Europe in a bid to battle the spread of coronavirus as its quarterly sales in China were hit by the pandemic.”
Also in retailing Cycle Republic is closing all its stores while Primark is shutting some of its European stores after Governments in Italy, Spain and France have ordered lockdowns.
Ian Carrotte of ICSM Credit urged all suppliers to these big names to be very strict with credit. He said: “We’ve seen how famous brands will use moral blackmail over suppliers suggesting they will not have further orders if they don’t extend credit. Carillion and Jamie Oliver’s Italian used the tactic and then collapsed owing suppliers millions. Be strict with credit – and join us in ICSM to protect your business and be in the loop of who is in trouble and not paying their invoices.”
In manufacturing Reuters are reporting Volkswagen Group will suspend production this week at plants in Italy, Portugal, Slovakia and Spain while Airbus has announced plans to halt operations at its plants in France and Spain for four days as the coronavirus crisis spread from battered airlines to the manufacturing sector.
ICSM Credit
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For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk