As another airline goes bust ICSM Credit issues a warning about firms looking to restructure or even expand - and seeking new suppliers
As the world’s second oldest airline Avianca of Columbia files for bankruptcy in the USA and Virgin Atlantic now in serious danger of collapse Ian Carrotte of ICSM Credit has issued a warning for companies not to grant the aviation industry new credit.
“Almost every day a name in the travel and airline industry announces job cuts or financial restructuring,” said Ian Carrotte. “A company doesn’t have to go bust for creditors not to get paid. If they are laying off staff, cutting services or negotiating rescue packages they are obviously in trouble. The first thing these lame ducks do is to stop paying suppliers if they are deemed inessential. At the same time buyers in those firms will be shopping around for supplies so if you suddenly get a big order from one of these companies it is best to insist on cash up front.”
Retail concerns
On the High Street White Stuff is about to slash staff numbers while H&M have seen sales plummet this spring and (as already reported) Debenhams is planning not to reopen several stores with more under review. Debenhams have pointed the finger at Hammerson centres (their landlords to several of their stores) for failing to grant rent cuts or a rent holiday. Next say they are looking at taking on some of Debenhams’ former stores as beauty emporiums – and they will be seeking new suppliers for the expansion even though as a chain they have seen sales collapse. Another retailer in trouble is Matalan who are seeking a £50m cash injection to survive the lock down.
Caution is the watch word
Ian Carrotte said firms looking to expand and to buy companies in freefall are not always cash rich. He said he noted JD Sports and Sports Direct were reported to be vying to buy up shoe shop Office and suggested caution should be the watch word if large orders for print and signage are suddenly put out to tender.
In theatre world we have seen Nuffield Southampton Theatres go into administration and the Conti Junior School close while the National Rural Touring Forum has cancelled thousands of performances at a cost of £300,000 meaning the sector will be squeezed to put it mildly. Again caution is the word said ian Carrotte and it is always best to check with ICSM Credit on a firm's background and credit worthiness.
Dumping debt warning
“The USA is in the same boat,” said Ian Carrotte, “millions unemployed and businesses crashing daily leaving trails of debt so even a new order from the other side of the Atlantic should be treated with the same caution. For instance the department store chain, Neiman Marcus, has filed for Chapter 11 bankruptcy protection as a result of the ongoing coronavirus pandemic. They plan to dump $4bn in debt and restart anew and there lies a warning for us all.”
About ICSM Credit
ICSM Credit has more than four decades of experience as a credit intelligence group whose members gain inside information about firms in trouble allowing them to avoid bad debts and rogue traders. To join costs less than a tank of fuel - while at the moment there's a special free temporary membership offer during the Covid-19 crisis which gives access to free legal letters. ICSM also has an effective debt collecting service which has a global reach - ask for details from Paul.
For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.
To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com
For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk