ICSM Business News Update for February 2023
Welcome to our February Newsletter
With expectations there will be a recession this year it is easy to run up the white flag, shut up shop and hide. Wait! I’ve been through four recessions (along with many thousands in business of a certain age) and I (and we) are still standing.
Firstly every recession is different and affects different sectors of the economy. In the 1970s we had stagflation - inflation but an economy in retreat as oil prices boomed due to the war in the Middle East. The early 80s saw large manufacturers take a hit, the nineties had Nigel Lawson’s boom and bust with inflation and high interest rates causing repossessions, boarded up shops, and service industries hit. Then the Credit Crunch in 2008 with its run on the bank at Northern Rock and banks calling in loans forcing many firms to shut. This one is showing signs of something few predicted: a boom in retail shopping and a return to cash over credit cards. People want certainty and are counting their pennies.
That includes businesses - firms in hock to the banks with millions in debt will suffer due to the high interest rates and the lenders desire for liquidity. In short it’s a time for strict financial control and to look at outgoings and loans. Energy prices are rising and although we all hope the Government will step in to help industry, it’s best to take control of your energy bills with insulation, consolidating departments and investing in energy saving devices.
Recessions also throw up opportunities - as some of your competitors go bust there is less competition. New sectors arise - who can forget the rise of Uber after the 2008 Credit Crunch? Cheaper taxis that you call up on an app on your phone. Or Airbnb.
ICSM can help with ensuring you get paid by your clients. In a recession there will be more late payers and those using you as free credit. We have FREE legal letters for you to access to put pressure on recalcitrant clients, our FREE micro debt service is there to claw back long written-off smaller unpaid invoices and our highly efficient and diplomatic debt collection service brings in thousands every year. In short - ICSM members have all the tools required to ensure they get paid - giving you the cash flow required to survive the coming months.
Don’t write off debts
If customers begin to pay late then ICSM’s FREE legal letters are available for members to use online to chase up late payers and chase down long overdue invoices which have around an 80% success rate. (See how easy it is with this video: https://youtu.be/AIycysoFhYo.)
Debt Collection
We have an excellent record in debt collection with a diplomatic but effective service led by Paul Carrotte who has successfully brought in tens of thousands of pounds for members last year - if you have a problem debt contact Paul on 0844 854 1850.
I hope you had a good New Year - and with good housekeeping together we will have a better 2023 than many predict.
Kind regards
Ian Carrotte
Proprietor of ICSM Credit
PS: Please note as part of our systems maintenance and upgrade to the new API, we will be carrying out a ‘Spring clean’ on old archived saved reports. All old reports saved prior to December 2019 will be deleted as they are obviously out of date. If anyone has a specific requirement to keep their ‘Old Reports’ in an archive, please let us know so that we can discuss.
For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com
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NEWS
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ICSM Printing and Allied Trades Business News: More print firms hit the rocks as Covid support loans come due and the icy winds of recession blow through the industry:
By Harry Mottram: January has brought more bad news for the printing sector and its allied trades as firms struggle to repay their Covid support loans and attempt to remain profitable as energy bills double.
Print Week’s Jo Francis has reported on Bermondsey-based Screaming Colour who have made an intention to call in administrators in a filing on 9 January, at the High Court. She wrote: “The notice states that Paul Williams and Benjamin Wiles of Kroll Advisory are the administrators to be appointed. Screaming Colour was established in 1994. The multi-award-winning firm specialises in digital printing and creative production and offers a 24-hour service from its 2,800sqm site in Bermondsey.”
She explained that Printweek understands that Screaming Colour’s core business was ‘badly impacted by the pandemic restrictions.’ And in its abbreviated accounts for the year ending 31 August 2021,’ total equity fell from £1,089,176 to £387,665.’
Alarmingly if appears that the future of the 77 workers is in doubt and that suppliers haven’t had any news about their invoices. Printweek understands the firm is up for sale with two potential buyers – leaving creditors in limbo.
Meanwhile further up the River Thames at Hampton TSM Copiers Limited are the subject of a petition to wind up by His Majesty’s Revenue and Customs in the London Courts of Justice on January 24. The taxman is clearly after a sizeable sum to have taken such action and according to Companies House there are three outstanding charges related to rent to TSM Copiers and their accounts are overdue.
TSM’s website shows a photograph of central London looking down the River Thames but are in an industrial unit in Hampton – and their social media has not been updated in years – but three engineers are linked to the firm via their LinkedIn pages.
Ian Carrotte of the business intelligence group ICSM who warn its members of potential bad debts said: “The print industry is particularly vulnerable to inflation and the rise in energy costs as they are big consumers of electricity. A printing company factory unit using around 50,000 KWH a year face a bill of near £200,000 and rising – it’s not sustainable if cashflow is poor. Landlords are hiking rents, inflation has sent paper prices soaring and then you have a perfect storm – to survive like on a ship in a storm you must batten down the hatches and head for calmer waters with clients that pay on time and perhaps a smaller ship.”
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ICSM Logistics News: Merseyside firm enter administration as KBL say unsecured ‘won’t be paid’
By Harry Mottram: Optimum Logistics of Bootle and Speke has entered administration with the chilling news from KBL that unsecured creditors. The trade journal Motor Transport’s Chris Tindall has reported on the demise of the firm that was only established in 2019 but has hit the rocks as a result of lack of cashflow and financial assets.
He reported: “Optimum Logistics ceased trading in November 2022 despite its most recent financial results showing that it had returned to profit by the end of 2021. In a report out this month to creditors, KBL Advisory said it was approached by the company’s invoice finance facility provider, Bibby, after it had conducted a review of Optimum’s ledger, ‘which led to concerns over the recoverability of its outstanding liability.’”
The firm had a range of transport services, including temperature-controlled, flat-bed, container and tanker haulage and held an international operator licence.
KBL added: “The joint administrators think that the company has insufficient property to enable a distribution to be made to unsecured creditors.”
Chris Tindall also reported on the demise of Sam Carmichael Logistics that crashed on January 3, due to cash flow problems. The North Ferrilby firm in East Yorkshire had 18 HGVs and 21 trailers along with 24 workers who have all lost their jobs as Interpath Advisory wind up the business.
Meanwhile in better news Motor Transport’s journalist reported on how a pre-pack deal has been agreed at the struggling London-based courier firm Rush Worldwide that entered administration last year. He said 34 jobs were saved after insolvency practitioners Julie Partner and Andrew Hook negotiated the sale of the firm to Rush Europe.
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ICSM Cryptocurrency News: Following the FTX ‘Ponzi Scheme’ scandal, advocates of cryptocurrencies spin good news about the sector – but Coinbase slash jobs as crisis deepens
By Harry Mottram: Reuters have reported that Coinbase have laid off 950 workers as the market for cryptocurrencies suffers problems following the FTX scandal which lost investors millions of pounds. But last year before the scandal broke Bitcoin saw its value fall from around £30K in 2021 to about £9K in November last year according to NBC News.
The FTX scandal in which investors cash was funnelled illegally by the former founder Sam Bankman-Fried into politicians, property and sister companies has spooked the cryptocurrency industry. Forbes reported this month: “Ethereum (ETH) prices dropped another 1.4% in December to close out the year at $1,199. Bitcoin prices dropped nearly 65% in 2022, its worst annual performance since its 73% decline in 2018. Ethereum prices dropped 67.7% in 2022.
“Rising interest rates triggered crypto winter in 2022, producing a wave of bankruptcies in the crypto industry and sending the prices of most popular cryptocurrencies tumbling. Among the 10 largest cryptocurrencies by market capitalization, Tron (TRON) was the best performer with a 27% decline. Polkadot (DOT) took the hardest hit with an 83.6% price decline on the year.
“The total market capitalization of the global cryptocurrency market peaked at over $2.9 trillion in November 2021. As of the end of 2022, that market cap now stands at just $798 billion.”
Those figures speak for themselves and it is no surprise with millions of pounds of investors cash lost in 2022 there are growing calls on both sides of the Atlantic for regulation of the ‘Wild West’ industry. That is something that may well happen in the coming years but in the mean time the industry’s champions are talking up cryptocurrencies as they point to the huge swings in value in the past. Typical is Sandra Ro, CEO of the Global Blockchain Business Council, who was reported by website Coin desk as saying: “Regroup with humility, rebuild with integrity, regain trust, rise again.”
Ian Carrotte of ICSM said that nobody should invest more than they can afford to lose in cryptocurrencies and he likened it to gambling by saying it should be a speculative hobby and not a way to earn money. “It’s an old phrase,” said Ian Carrotte, “but if something is too good to be true then it isn’t. What Bankman-Fried was promising investors was fantasy stuff – get rich quick. Some say it was a Ponzi scheme – but it’s a essentially an old fashioned fraud using the latest technology.”
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ICSM Hospitality Business News: Burger Chain Byron shuts more restaurants in bid to escape administration following collapse during Covid
By Harry Mottram: The New Year has seen the dark clouds of recession cast their bleak shadows across many sectors of the British economy and in particular that of hospitality. The burger chain Byron – a company known for cooking that most popular staple of the dining table – went bust during the Covid Crisis but has seemingly been rescued from administration by Interpath Advisory who have managed to get a pre-pack organised by its owners Calveton.
Writing in Shy News’ business section journalist Mark Kleinman reported this month: “Byron last collapsed at the height of the COVID-19 pandemic, resulting in Calveton taking control of the business. At its peak, Byron operated scores of sites across the UK and was among a deluge of restaurant chains that expanded too aggressively. It was unclear on Tuesday how many jobs would be lost in the latest restructuring.”
Ian Carrotte of the business intelligence group ICSM who warn its members of potential bad debts said the burger chain had joined a long list of hospitality outfits that hit the rocks during 2020-2022 such as Carluccio's and Prezzo. He said: “With interest rates and huge increases in energy bills household finances have been hit to the point many people cannot afford to eat out. January and February are traditionally lean times for hospitality but this year with inflation adding to the nation’s fiscal problems we can expect to see more pubs, clubs, wine bars, cafes and restaurants closing their doors. Not only in the case of Byron doe suppliers lose out but so do staff – both disasters also contribute to the economic woes of the nation. My advice to businesses is to invest in strict credit control and pull out of business when a firm stops paying its bills – however famous a name they are.”
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Rag Trade Business News: High end fashion houses struggle as consumers cut back while the collapsed Temperley brand that owed £31m has done a phoenix and is already losing millions
By Harry Mottram: As the cost of living rises so personal budgets for buying clothes shrink. That stylish jacked for £250 might have to be binned in favour for something for a few pounds in a charity shop. Everyone – well not everyone as Kate Middleton the Princess of Wales was reported to have spend £176,664 on clothes last year – is having to cut back. Budget clothing stores and supermarkets that sell a basic range are doing well.
Writing for the Daily Mail’s business desk Adam Luck penned a piece entitled ‘Catwalks littered with losses for the Queens of Fashion.’ He reported on Stella McCartney’s £32.7 million pound losses – enough to break any company unless there’s some help from backers – and on the shocking losses at Alice Temperley who notched up £31 million in losses before performing a phoenix and setting up a new Temperley firm that is already posted £2.3 million in losses.
Adam Luck reported: “When Alice Temperley announced last January that she was intending to take her son to Sri Lanka to be ‘immersed in another culture’ it is unlikely creditors of her fallen empire were impressed. Only a month before it was revealed that her fashion brand Temperley London, a favourite of the new Princess of Wales, owed £31million when it went into administration in April 2021.
“Temperley simply set up a new company using a pre-pack deal to buy back the best assets, which enabled her to keep selling her trademark flowing sequined frocks and velvet suits, which have drawn a long list of admirers.”
Ian Carrotte of ICSM – the business intelligence group dedicated to preventing bad debts and warning its members of late payers – said the excuse that was given by the administrators it was Covid that finished the firm was not entirely true as it had been losing cash before the pandemic.
He said: “For suppliers there’s a danger of allowing these big names in fashion with their celebrity clients to fob them off with excuses for not paying on time. The old line that they are too famous to fail or worse ‘do you know who I am’ are often given – but in reality they are no different from any business. There is a pattern with the big names mentioned by Adam Luck which is the economy has pulled the rug from under their business model as customers seek lower priced clothing.”
In his article Adam Luck also mentioned Victoria Beckham whose fashion business that has accumulated losses of £66 million while model Alexa Chung’s fashion firm has run up losses of more than £10 million and is alarming suppliers by announcing she is to ‘wind down’ the business.
Ian Carrotte said other businesses in the sector that had hit the buffers included Misguided, Revlon, Secoo and M&Co.
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More stories: check our website for news on logistics, construction, hospitality, printing and publishing - and much more
PLUS: A personal view on newspaper groups as Reach's ‘shares tank on profit warning’ - chalk up another victory for defeatism as management and owners ‘manage decline’
https://www.icsmcredit.com/news/viewpost.php?id=641
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PLUS: ICSM Business News: the mind bogglingly high sums fraudulently claimed in Covid support loans as a director of a print related company is nicked for claiming £50K
https://www.icsmcredit.com/news/viewpost.php?id=640
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PLUS: ICSM Business News: crisis as hospitality industry is hit by cost-of-living crisis (even Rishi Sunak’s former restaurateur boss goes bust)
https://www.icsmcredit.com/news/viewpost.php?id=639
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PLUS: ICSM Business News: concerns mount over the future of football league club after ’20-year-old tycoon’ puts in ownership bid – plus a long list of football clubs who have gone busthttps://www.icsmcredit.com/news/viewpost.php?id=638
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ICSM CREDIT
For information on ICSM visit www.icsmcredit.com or call 0844 854 1850.
ICSM, The Exchange, Express Park, Bristol Road, Bridgwater, Somerset TA6 4RR. Tel: 0844 854 1850. www.icsmcredit.com. Ian.carrotte@icsmcredit.com
