News
Number of liquidations jumps as businesses feel the pinch
The number of companies falling into liquidation has risen dramatically in the third quarter of the year, according to figures from the Insolvency Service.
England and Wales saw more than 4,000 compulsory and creditors' voluntary liquidations across the three-month period – up by more than a quarter year-on-year.
In addition, there are another 1,444 companies that are either in receivership, administration or under a company voluntary arrangement, suggesting more business casualties for the near future.
According to PricewaterhouseCoopers (PwC), the manufacturing sector fared comparatively well, with levels at a five-year low, possibly due to the pound's weak position against the euro making the UK more attractive.
Conversely, the retail sector suffered particularly heavily, but this could have a knock-on effect for the print sector by reducing print demand.
High profile names such as Dolcis, and Stead and Simpson have fallen into administration this quarter and, with retail insolvencies remaining at a five-year high and a tough Christmas ahead, PwC expects another spike in retail companies going bust in the new year.
However, PwC business recovery partner Mike Jervis said that in the current economic climate, entering insolvency can be the best way forward.
"Where rescue capital is a scarce commodity, it is obvious that the sooner problems are recognised, a solution, inside or outside an insolvency process, is more likely to be achievable," he said.
"Used in the right circumstances, insolvency procedures including pre-packaged administrations can help rescue a company, saving jobs, and preserving value for the company and continuity for suppliers."
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Comments
Gerry Anderson - 07 November 2008
It's interesting to hear PwC openly saying that "insolvency procedures including pre-packaged administrations can help rescue a company, saving jobs, and preserving value for the company and continuity for suppliers" I would like to know how Mike Jervis squares that with the attitude or policy of key paper suppliers who refuse to deal with company's bought through a pre-pack arrangement. In other industries there is an acceptance of the realities but not in the parochial print trade. Only today the high street retailer Ghost has gone into Administration. Instead of cutting off supplies to the Administrators and new buyers, the more savvy of their suppliers have quickly stepped in to guarantee continuity of supplies because it's in the mutual interests of the pre-packed company and the suppliers. No dogma, just pragmatism.
The Mighty wind - 07 November 2008
To be fair what they said was
"Used in the right circumstances, ........"
Paper suppliers have a need to protect there businesses and employees as much as any other company and it is for them to decide whether they continue to trade with prepacked companies or not. Incidentally quoting PwC concerning the benefits of prepacking is rather like quoting an estate agent on the benefits of buying/selling a house: it always gets a positive answer
Trevor Collins - 08 November 2008
Hi,
We are starting to see printing and graphic design customers go under hear in Pembrokeshire. What's more though who are still trading are more reluctant to pay there bills on time.
This is largely down to the banks calling in or reducing there overdraft facility. It has been compounded be suppliers to the industry tightening up there own credit terms. Take Spicers. Last month they decided to cut the amount of credit they give in effect by 15 days.
Once again it is the small printing business that gets caught in the middle between there suppliers and customers.
Trevor Collins. www.modernprint.co.uk
- 10 November 2008
Companies `do not` have to go into liquidation if they act quick enough!
Take on board the `right` people with experience and skills to help you survive and become successful.
Colin Thompson
Cavendish
www.cavendish-mr.org.uk
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