Monday 14 November 2011

Retail failures forecast to spike at Christmas

The FT reports that UK retail insolvencies and corporate failures could rise nearer to levels at the end of 2008 when the financial system was on the verge of breaking down and the economy was on the rocks. Pressures include difficulties in rolling over bank loans, paying Quarter-day rent demands, shopper reaction to price inflation on food, fuel and a flatline economy.
In these circumstances it is vital that NAMs attempt to assess the viability of customers and review trade partnership criteria based upon a combination of Companies House data and personal judgement of distress signs on the ground.
If sentiment or unwillingness to face up to market realities is causing a NAM to hesitate in pulling the plug, it might be worth remembering that a customer going bust owing £150k to a supplier on a 5% net margin, requires that the supplier make incremental sales of £3m to recover the loss…
Still feel like taking over the role of ‘bankers’ in the high street?

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