Alarm at collapsing firms (even on Christmas Day) as David Lloyd Leisure and GLL signal cashflow problems - plus the publican who has borrowed £4m to stay afloat

On Christmas Eve Heaton Catering Equipment Limited in Newcastle Upon Tyne appointed liquidators while the next day of Christmas Day Gillard Racing Karts in Essex also appointed liquidators. Nothing unusual in that but everyday over the festive period hundreds more firms went to the wall with record numbers of personal bankruptcies.

Ian Carrotte of ICSM Credit said everyone in business needed to take credit control seriously as the recession bites and talk to their creditors as more big names hit the buffers in the first days of 2021.

The man who borrowed £4m for his pubs

The BBC business journalist Dan Ascher reported on businessman Martin Wolstencroft (pictured) who has borrowed £4m just to ensure the survival of pub chain Arc Inspirations, a bar chain with 17 venues.

He reported: "The money that we are borrowing is really just to stand still," Mr Wolstencroft said. "We'll be coming out of this in a far worse position with far greater debt and it totally reduces our ability to grow our business for the future. And all of this has been brought about through no fault of our own."

UK Hospitality says the closure of pubs, restaurants and hotels is costing business owners such as Mr Wolstencroft a total of £500m a month, even allowing for any government support. And that has led to a huge rise in debt. More than 1,600 restaurants closed last year, costing 30,000 jobs, says property adviser Altus. When bars, hotels and other hospitality businesses are included, almost 300,000 jobs were lost last year as a result of the pandemic, according to figures from the Office for National Statistics.

The BBC have also reported on the owner of pub chains Harvester and Toby Carvery who says it may need to raise more cash to survive lockdown. Pub group Mitchells & Butlers says it is examining raising money from investors because it is unclear how long current restrictions will last. Each month closed loses the business up to £40m, plus it has to meet £50m debt costs each quarter.

Ian Carrotte of ICSM Credit said suppliers to pubs and restaurants should be careful. “Everyday another hotel or bar goes bust leaving suppliers with nothing,” he said, “being a member of ICSM Credit is an insurance against getting your fingers burnt as we and our members flag up firms in trouble saving them millions every quarter.”

Alarm bells are also ringing over the fate of another sector – this time gyms and leisure centres. David Lloyd is the latest gym chain to warn over its future as lockdown measures bite reports the Daily Mail. They reported this week: “In its accounts, the company said uncertainty caused by the pandemic 'could cast significant doubt on the group' and its ability to stay in business.”

Another major operator Greenwich Leisure Limited (GLL) has also signalled it has major problems as its cash flow has dried up due to the lockdowns. They begged for cash from the Cardiff City Council last November in order to retain leisure centres in the city and have already closed for good the Oasis Leisure Centre in Swindon.

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