How Many More To Go Bust

[John Jupp]

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So does this mean I can forget paying any future bill as they're all figments of my imagination?

Conversely does this mean that there is no recession because it is a condition of a global illusion?

There is no spoon.

[ian-d]

Getting back to the original subject, there are undoubtley many more retailers to go into administration, but it can't all be blamed on a falling economy, too many of these businesses have rode the wave of consumer spending for too long that they've not held back anything in reserve and have been taken in by banks lending too much money. It comes down to poor management, Woolworths being a perfect example!

Some won't agree with this, but as an owner of a retail/distribution company, I've always ensured the business runs within it's means, never had loans or over spend, it's been built up slowly into the company it is today, in excellent profit, all stock payments up to date and all customer payments up to date, small overheads (in percentage terms) and currently no slow down in monthly turnover targets. Appreciate that all businesses could ultimately see a down-turn in sales (I'm sure mine will) but it's how you manage it that counts.

I study the markets in quite a lot of detail and whilst I had my suspicions over a number of the retailers already in administration, I suspect of the big companies DSG (Dixons, Currys, PC World), M&S, BHS and Debehams (profitable but owing £1bil to the banks!) could be a trouble. The only retailers most likely to profit from 2009 will be the supermarkets, as they continue to take control of all sides of retail.

[tijan]

...
Conversely does this mean that there is no recession because it is a condition of a global illusion?

There is no spoon.

The word recession is a condition of a global illusion that causes a religious panic. If it wasnt mentioned at all in the distress, the financial downturn may not have been this deep. If the whole world could for a split second cast our mind away from it and went ahead to our daily businesses, then everything would go on as normal afterall its a virtual world and the money that is no where is somewhere locked away by each of us for the fear of the word RECESSION. Thats why you and i dont want to spend, thats why the bank dont want to lend, and because we are not spending no one is buying hence leading to businesses going to administration. Circular flow of income has been distrauted. Overcoming recession would require some psychological perception. e.g,
If Obama makes a first bold step in the right direction then our confidence will override and surpass our fear of RECESSION. and it may well be over, sooner than predicted. Its only a game of mind and trust.

[fizzbird]

Appreciate that all businesses could ultimately see a down-turn in sales (I'm sure mine will) but it's how you manage it that counts.

You are partly correct but there are some factors beyond your control such as the ability of your customers to pay you.
I've just had a merchant on a private program default on me. The sum involved is not great but what could I have done to prevent this?

[ian-d]

You are partly correct but there are some factors beyond your control such as the ability of your customers to pay you.
I've just had a merchant on a private program default on me. The sum involved is not great but what could I have done to prevent this?

Depends, in my case, from a retail point of view selling online, payments must be met prior to order despatch. It's only really when you have trade customers etc that late payments may be possible, but then it depends on the relationship plus of course what terms you already have in place.

[fizzbird]

Depends, in my case, from a retail point of view selling online, payments must be met prior to order despatch.

Mmm, yes I'd overlooked this aspect.

[Mogga]

"We didn’t bail out Woolies but we run to the rescue of a lot of pinstriped Tarquins who were too busy tipping champagne down their throats to see the mess they were making. "

Brown-nosing the pinstripe parasites | Fergus Shanahan writes for The Sun | The Sun |News|Columnists|Fergus Shanahan

[Stellar]

They should have guaranteed all savings accounts (Cancelled out against any debts you have of course) and then let the banks go to he!!

Exactly. All the money they have spent and are spending on bailing out these banks could have been spent on bolstering the guarantee scheme, ensuring that no ordinary savers lose their money. And then, to hell with the banks. Why should tax payers money go to bail out those that have been reckless and idiotic, and made themselves a fortune in the process?

The very basis of the free market system is that if you go bust, then you shut up shop and the stronger, better competitors take your business and thrive. The Government actions are massively distorting the market and the bankers are not being punished for their stupid mistakes, so they will make them again, and again, and again.

[John Jupp]

I have noticed since the New Year (and we're not that far into it) that a significant number of merchants and even a few we've had dealings with at one time or another who had a rip roaring XMas period and who obviously cut margins TOO far in their attempts to attract longer term volume customers are shall we say.....a little slow in settling invoices.

This obviously has a knock on effect for us too. For me personally it's a huge inconvenience that I just won't put up with. Luckily in our case it's only a matter of a few days but I know of a few in the industry where those few days start dragging into a few weeks.

So it's mad scramble time to reduce exposure and underlying risk and to convert credits into liquidity. With less available from Banks to ride through slow payment periods I think everyone is feeling the squeeze to a degree of inconvenience.

[Mr Pointy]

I think the original figure posed by Industry bosses in December was that they expected 15 major retailers/companies to have gone under by the end of January! We're about half way there I think!

"Unfortunately", we live in a society that is totally consumer driven & where the media tells us that we can only be happy if we have "X" & live like "Y". :td Borrow now & stuff later because you won't be happy unless you have "XYZ" NOW!!!!

Of course, money ie the notes themselves, are only a "promise to pay", like an IOU. Basically, if we were all to go to the Bank of England & demand that they make good their promise to pay (by giving us gold), the country would be declared bankrupt! Not helped by Gordon selling off half our gold reserves when prices were at a record low!!! :sneaky

Our economy, with the obsession with GROWTH is entirely unsustainable & these corrections are necessary to peg things back a bit. Unfortunately, this pegging back doesn't seem to apply to all the bankers who are going to sit on their government money during this correction & then start all over again once we are coming out of it. They throw all our money down the toilet by having a load of dodgy bets & now get given another load by the government under the restriction that they be a bit more careful this time! :laugh

IMO until we address the greed endemic in the City & turn our economy back to actually creating things (housing, infrastructure, goods etc.), rather than focusing on consumerism & financial services, all pumped up on the basis of using housing as a funding source rather than as somewhere to live, we will always go through these cycles of boom & bust (even if Gordon thinks he's solved the problem & saved the world hahaha).

As an affiliate marketeer, I should want a consumer driven economy, but a sustainable economy is better for all!

Phew!!!! Rant over lolol.

[Leeky]

I suspect of the big companies DSG (Dixons, Currys, PC World), M&S, BHS and Debehams (profitable but owing £1bil to the banks!) could be a trouble.

Well the first signs are there, Dixons, Currys and PC World have just reduced cookie lengh... Comet has paused activity for voucher code sites.

Lee

[ian-d]

Well the first signs are there, Dixons, Currys and PC World have just reduced cookie lengh... Comet has paused activity for voucher code sites.

Lee

I wouldn't suggest that Comet are in trouble, they will be fine, but DSG have been on the slippery slope for months, if not years, mainly surrounding the poorly performing PC World.

[Leeky]

Im not surprised about PC World.... After trying to get a £20 discount on an ex-display unboxed monitor (priced at £220 marked CLEARANCE SALE).. and failed, I then noticed a couple of isles down the exact same monitor (but brand new) priced at £180??

I asked the reason and they said the ex-display monitor (at the time of purchasing by pc-world) was more expensive than the new monitor.. fantastic logic eh :tup

Lee

[Corylees]

I worked for this company for 16 years, from when it was just 4 small shops, right through to it being worth £150m. and while my heart goes out to all those that have last there jobs (and also been told that they are not getting paid for working Jan). The management are fully responsable for the decline and demise of this company.

[Mr Pointy]

Oh just to cheer everyone up even more - apparently, the UK has the highest level of personal debt in the world! And in fact, the highest level in the history of the world!!!

Does anyone think that the right way out of the recession is to SPEND our way out?! Or perhaps not!! Despite the resulting job losses to retailers, I think the only way forward is to cut back and start living within our means again!