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Retail Gloom Deepens as DIY Chain Stumbles

The new owner of Homebase will unveil plans to close about a quarter of its stores next week, threatening more than 1,000 jobs.

 

British high street doom takes another victim, as DIY specialist Homebase announces plans to enter insolvency procedures. Since 2016, the chain has switched hands twice, first bought by Wesfarmers and then again by Hilco Capital back in May. Hilco has now outlined its proposal for a Company Voluntary Arrangement (CVA), which will allow the company to pay off its debts but could also see thousands of workers lose their jobs when up to 80 branches are forced to close.

The CVA has become increasingly popular in the modern retail market. Many household names have surrendered to the restructuring procedure, with big names such as Mothercare, New Look and Carpetright all falling victim.

While the CVA provides a short-term lifeline as well as some respite from insolvency anxiety, the consequent damage to the firm’s reputation can halt its future prospects. There are alternatives for businesses in financial distress, with some platforms providing the cash as well as the information to safeguard against future offences.

 

Melanie Leech, the chief executive of the BPF, said: “CVAs should not be entered into lightly as they impact jobs, local communities and property owners and the pensioners’ savings that they invest

At the Credit Protection Association, we consistently encourage the assessment of good credit, urging our Members to keep a close eye on the financial behaviour of their customers. CPA provides its Members with a comprehensive credit assessment service, with credit and status reports, and a sophisticated company and directorship database.

When it comes to running a business, scrutinising all major players is key. Whether our Members are owed money by a limited company, sole trader or a partnership, our online services provide a detailed overview of creditworthiness. This becomes particularly important if our Members wish to revisit the services of a historic late payer, where their consequent behaviour can be scrutinised for any abnormalities or arising financial distress.

The high street continues to hamper business confidence. While credit managers cannot force consumers to spend more, we certainly do our bit. Through our credit assessment service, power is restored to the business owner, allowing them more control over who they do business with and hopefully chipping away at the overall sense of gloom engulfing the retail sector.

Please call us on 0330 053 9263 to discuss how CPA can help your cashflow.
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The Latest Insolvencies to 10 Aug 2018

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