Poundstretcher could close half of its stores in under the rescue deal | Business

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British high streets have suffered their worst week since the collapse of the BHS in 2016, with nearly 9 000 job losses in the retail trade and restaurants and thousands of others put at risk.The discount chain Poundstretcher is close to the shutdown of nearly half of its stores in six weeks, with the probability of a loss of 2 000 jobs, according to the owners and other creditors approved a rescue plan for restructuring Friday.

The upmarket burger chain Byron, which employs 1,200 to 51 restaurants and French-inspired restaurant le Bistro Pierre, which has about 25 points of sale and employs 900 people, on Friday, both filed legal documents warning, they can collapse to the administration within the next 10 days.

The Scottish retail chain M&Co, the fashion retailer New Look and dinner, chains , Prezzo, Wasabi and Azzurri, the owner of Ask and Zizzi, are also under the threat of an emergency to seek new investments, or of large reductions of rent of the part of the owners.

Companies are struggling after weeks of closure during the top of the street to lock and advance the conduct of the government furlough plan designed to protect jobs.

According to the Centre for Retail Research, more than 24 000 jobs have already been shed in the first half of this year, well in advance, the number of jobs affected by the insolvencies over the whole of 2019.

The CRC calculates that more than 32 000 jobs are at risk in the major retailers who have already begun a process of insolvency.

Another 15,300 have been lost to small high street businesses in the last six months.

Professor Joshua Bamfield, director of CRR, has warned, these losses have been at the tip of the iceberg, because the government’s job protection scheme begins to slow down beginning next month, and the prohibition on owners of end-of-lease ended in September.

“The second half of the year could be disastrous for the high streets,” he said.

The potential job losses come after a horrible week during which about 9 000 jobs were lost in retail and hospitality groups.

The furniture retailer Harveys, shirt maker TM Lewin and Casual Group, the owner of the Cafe Rouge and Bella Italia, and all are called to the directors of all shared services provider, the owner of the Upper Crust and hundreds of others from the train station and the airport restaurants, as well as Harrods and the owner of Topshop, Arcadia, all announced hundreds of job cuts.

Their problems are not all the result of the coronovirus. Even before the high street locking, more than one-fifth of retail and hospitality businesses – 29,108 – have been classified as “zombie companies” by the Company Watch. These are the companies that have more debts than assets.

Nick Hood at Company Watch, said: “The situation will deteriorate unless there is an unexpected miracle on consumer spending.”

This miracle currently does not seem likely. Two weeks after the clothing stores, shoe stores, retailers of toys and other “non-essential” of the high street chains opened their doors, the number of customers and about was still less than half that of a year ago, according to the according to the consulting company BDO.

The sales in physical stores plunged nearly 57% during the week of 30 June against the same week last year as buyers continued to prefer online shopping rather than a return to shopping streets, shopping centres and retail parks, the firm survey of small and medium-sized retailers.

Online sales have increased more than three-quarters, but it was not enough to offset the loss of sales in the stores, so that the set of retailers has had nearly 16% lower than the same week last year.

Poundstretcher, which was founded in 1981 as one of the UK’s first discounters, has agreed to pay the rent 253 stores for six weeks, but warned the owners that the points of sale could close after that if new bids could not be agreed. Another 23 stores owned by a company directly related to Poundstretcher can be as close as the division is expected to be put into administration next week.

Rents reduced-price chain will be reduced by up to 40% over 84 stores and held at the current rate of 94 stores under the insolvency procedure known as a company voluntary arrangement (CVA) approved Thursday night.

Will Wright, restructuring partner at KPMG and joint supervisor of the CVA, said: “the approval of The CVA provides a stable platform from which the company can continue to operate in a more targeted portfolio of stores.”

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