problems with red letter days

[phat]

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Well as the manager for the Days to amaze affiliate program, this would seen to be good news for some of us other guys within this sector, however I would like to say that if and the word is if Red letter days do go bust there’s going to be a lot of money owned, supplies and affiliates alike. Then questions have to be asked, how with their annual turnover did a company as big as RLD go under????

On a personal note my sympathies lie squarely with the supplies and affiliates, the guys and girls that work hard to make a living and end up on the wrong side of it all "again".

[drivetowin]

Is it good news for the others in the sector though.

Long term the answer is probably yes as Red Letter Days were presumably a (the?) major competitor but short term I would have thought business across the whole sector may go down as people become jittery about buying advance activity day tickets that may be worthless when the day comes.

Of course (and not wishing to teach anyone's grandmother how to suck eggs) there is room for positive pr if one (or more) of the other providers were to offer a substantial discount on replacement activities for holders of red letter day tickets who have been disappointed.

[Paul Newton]

Then questions have to be asked, how with their annual turnover did a company as big as RLD go under????


Its not about profits.....its about generating cash to pay your creditors as and when they fall due. Profits mean nothing to anyone of your not getting paid.

[Chris Tradgett]

Hi,

News seems to be that she i about to sell it:

"On Sunday, it was confirmed Ms Elnaugh was in talks with fellow Dragon's Den judge Peter Jones about selling RLD."

BBC news

Whether the new owner will honour current affiliate debts remains to be seen - though we can always hope.

[pricethat]

Then questions have to be asked, how with their annual turnover did a company as big as RLD go under????

Its not about profits.....its about generating cash to pay your creditors as and when they fall due. Profits mean nothing to anyone of your not getting paid.

Profits are everything, íf your making permanent losses every month then there is no money to pay the creditors unless cashflow or turnover increases at the same ratio as the losses.

It sounds to me that this company had permanently been making losses which has finally just caught up with them.

[Paul Newton]

You can have enormous profits year on year, but if that cash is tied up in stock and debtors and you cant pay suppliers and employees.....your stuffed.

[Shane]

hmmm great stuff

So the £350 ferrari day voucher I have and only on sunday just extended it for £10 till january is going to be as useful as andrex ??

hmmmm makes you wonder how a cash rich business can go under like that.. they've been paid £350 and haven't paid the driving school so how with cash sloshing around do they go under as surely everything was run that way .. cash in... difference paid out 90 days down the line lol.

hmm wonder if Ms Elnaugh’s got a ferrari .. can feel the slim jim and screwdriver coming out as I get my "alternative" ferrari driving day

[pricethat]

If your cash is tied up in stock and debtors with a company this size your not stuffed at all, its a simple cashflow problem which is more than easily sorted through normal banking. In fact with a multimillion turnover there would be a queue at least a mile long to win the financing requirements of this company, but what wont happen is a financing deal for a company thats cash flow problems are caused by the fact they are losing money each month.

Did you not read, they were loosing money, ie spending more than they were actually making in profit, so in this case profit is always more important than cashflow. Seperately this company are not as traditional as you would expect, they dont hold stocks, they pay for services rendered as, or when they have been rendered for a client that has in almost all situations paid upfront.

We all know that cashflow can almost certainly kill a business, it is the same for all ppc affiliates here, spend 10,000 and then wait months for it, but if your actually making a lot of profit and can demostrate that you have done this on a consistent basis there is no end of people that will always help you out. Ie show you have a productive, profitable business!!

[Frostie]

So the £350 ferrari day voucher I have and only on sunday just extended it for £10 till january is going to be as useful as andrex ??

If you ring the race track or whoever you experience is with, you will find that from 2 weeks ago they started to reject Red Letter Day vouchers. I suspect now with the news, no one will accept them. Shane join yours with mine and at least its 2ply andrex

[Graham@Buyagift]

Interesting comments in the BBC report -

New owners Peter Jones and Theo Paphitis said that, though these suppliers are unlikely to receive any cash from the administrator, a "significant majority" have said they still want to support the business now that its future is more secure.

http://news.bbc.co.uk/1/hi/business/4738239.stm

http://www.retail-week.com/nav?page=...source=2883396

Graham

[phat]

I've read some of the posts with interest, first things first lets have it right profits are everything "whether it be cash rich or not" full stop. As one of the guys rightly said, profits matter without them all that borrowing for those new ventures brings companies down. Anyway on the line of profit where has all that lovely money gone to, the company were still taking bookings right up to the point of no return, so again are the guys that are owned money going to get settled first, and if they are to have a new owner what can he do that she could not on a annual turnover in excess of a reported xx millions a year!!!!!!!.........

Interesting times ahead for Red letter days...

[drivetowin]

I for one smell a bit of a rat on this one.

One of her close associates buys the company from the administrator (no doubt for a knock down sum) and now gets the opportunity to run the company effectively debt free (since it appears they are accepting no liability for the existing debts)

No wonder that programme is called "Dragons Den" although maybe "Rats nest" would be more appropriate

[Green2K]

Thanks for the update Graham... 150 employees? Cripes!

How many have you got at buyagift?

Green2K.

Interesting comments in the BBC report -

[EupaLeeB]

Hi All,

Sounds to me like the company was much too bloated, I can not for the life of me see how they needed 150 employees. Also the type of company that they are should have excellent cashflow as they sell vouchers on a cach up front basis (on the whole, except maybee corporate bookings) yet they dont have to pay suppliers until the vouchers are used !!!

It would be interesting to see the accounts, I would speculate that there too many staff, and too many directors taking too much in salaries and dividends.

After all this type of business is the perfect model, no physical inventory to go out of fashion or out of date or get damaged. I would love to see the administrators report !!

Also, Keith is right , it does seem strange that an associate has bought it from the administrator debt free, would be interesting to know what they paid.

EupaLeeB

[SillyJokes]

Who is going to supply them though? It won't be Go Ballistic, that's for sure.

Of if it is, expect to see steep price rises as they try and recoup their losses on the new orders and get cash up front.

You are right, I would have put them in a positive cashflow position too.