NEWS
Primark closes stores, halts buying
N Brown takes emergency action after sales plummet
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Primark has written to all of its product suppliers to halt current and future production together with the buying of any materials to be used in the products. It moved quickly to close its stores in every overseas country last week, followed by the UK which it closed on 22nd March. In the absence of an online sales channel, this will result in the retailer losing c.£650 million in sales per month.
Primark CEO Paul Marchant said: “This situation has been so fast moving - we could not have foreseen that over the course of a week, our stores in every country in which we operate, with the exception of the UK, have had to close. We have therefore been left with no option but to take this action. We have large quantities of existing stock in our stores, our depots and in transit, that is paid for and if we do not take this action now we will be taking delivery of stock that we simply can’t sell.”
Oasis & Warehouse on the block
Deloitte has been drafted in to support the potential sale of Oasis and Warehouse Group, the fashion business which is owned by Kaupthing. This is not the first time that a sale has been mooted for the business which has been engaged in a three year turnaround plan, spearheaded by CEO Hash Ladha.
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ividends have been postponed indefinitely at N Brown Group following a disastrous trading period. The business which operates the JD
Williams, Simply Be and Jacamo brands has said that whilst trading for the first two weeks of the new financial year was in line with expectations, sales have since dropped by 40 per cent. The business has therefore begun to scale back or defer all non-essential capital expenditure whilst also reviewing whether it can find a buyer for its freehold property in order to release capital for investment.
The N Brown Group management team is entering into talks with HMRC to defer its tax and national insurance obligations and has also called an immediate halt to buying stock. Tellingly, it revealed that staff recruitment has been suspended whilst a review of its organisational structure is conducted. Market watchers say that they expect the business will identify where headcount can be reduced and that redundancies will be inevitable.
Like others, the N Brown Group is exploring its options in relation to the government and Bank of England support packages for business as it confirmed that it has almost reached the limit of its current funding arrangements. It is also re-working bad debt assumptions from its customer credit offering, to take into account the current health crisis.
The bad debt review will see the business re-adjust its profit before tax which is now likely to be lower than its previous guidance of £70m - to £72m. Rather than release its full year results on 29th April, it now says that working restrictions which will affect both its own teams and those of its auditors means they are likely to be delayed. The company has yet to offer guidance for the current year.
Gtech to produce ventilators G
tech is amongst the UK businesses which have put themselves forward to supply the NHS with ventilators. It is understood
that Gtech has already developed a prototype which has been tested and seen via video link by Governments officials and clinicians.
Direct Commerce |
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