ICSM News in Brief: Red Sea Crisis hits trade; Chinese ‘shadow bank’ goes bust; UK’s largest nightclub operator closes; printers go bust; and retail pop-up Sook collapses

By Harry Mottram: As snow covers much of the country and the harsh winds of the Cost of Living Crisis continues to blow the last thing business needs are the knock on effects of shipping avoiding the Red Sea and the Suez Canal. The Houti attacks on shipping and the USA and UK military response is another blow to the global economy with 15% of world sea trade navigating the narrow passage. Already 20% of ships using the canal and Red Sea are going around the Cape to avoid danger with a resulting hike in fuel costs and delays to delivery. Add to that the continuing war in Ukraine and the threats of China to Taiwan and we have challenges to trade not seen since the Yom Kippur War of 1973 when oil prices went through the roof. (Pic: HMS Diamond. Ministry of Defence.)

China Syndrome

This year China is expected to see around 4% growth as conversely the country’s economy is shrinking – partly due to long term demographics – it’s population has gone down for the first time in decades – and partly due to a number of factors which have combined to create a down turn. Foreign investment has fallen as oversea firms pull out fearing more restrictions as Xi’s road to dictatorship continues, the collapsing property market, the fears of war with Taiwan and the World’s second economy falling into recession. Now a major Chinese shadow bank has filed for bankruptcy on the grounds it was unable to pay its debts. Earlier this month a Beijing court accepted the application from Zhongzhi Enterprise Group (ZEG), which has lent billions to real estate firms to cease trading. ZEG is a major player in China's shadow banking industry, a term for a system of lenders, brokers and other credit intermediaries who fall outside the realm of traditional regulated banking. Shadow banking, which is unregulated, is not subject to the same kinds of risk, liquidity and capital restrictions as traditional banks.

Night-time economy hit

The nation’s largest played in the night club business has gone bust blaming higher energy prices and students cutting back as fees and rents rise along with food and drink including take aways . Rekom, the Scandinavian owner of the brands Atik and Pryzm has 35 clubs across the UK along with 12 late night bars is the latest victim in the shrinking economy as household budgets are squeezed due to the Cost of Living Crisis.

Peter Marks, chair of the firm confirmed they had issued a notice of intention to appoint administrators this week for some of the firms within the Rekom group. He said: “We still have a core of successful club and bar businesses and our Nordic brands, Heidi’s Bier Bar in Birmingham and Cardiff and Proud Mary in Cardiff and Swansea, have outperformed all expectations. But we must go through this restructure to be able to come out stronger for the future. For any venues that may not continue as part of Rekom UK, we will do our best to find new owners and save jobs.”

The business was run by Deltic previously but went bust in 2020 and was then acquired by Rekom.

Print firms close down

The trade publication website Print Week has reported on two print firms shutting down due to trading difficulties. Journalist Richard Stuart-Turner reported on the demise of All Sorts Mailing Solutions in Dorset who have appointed Malcolm Rhodes and Luke Venner of Bishop Fleming to liquidated the firm blaming last year’s postal strikes impacting its direct mail orders. He penned in his report: “According to the notice of statement of affairs for the company, filed at Companies House, the business had an estimated total deficiency as regards members of nearly £335,000.”

Also in Print Week Jo Francis reported on Lincoln’s Your Print Partner has gone into voluntary liquidation with Craig Ridgley and Phil Ballard of Mercian Advisory appointed as joint liquidators. She reported that the firm had debts of more than £1.9m according to the Statement of Affairs. The director Matthew Armitage put the company into voluntary liquidation in December and has set up a new firm called Direct on Demand Print and is concentration reported Jo Francis on his other business Fan Merch which produces items for the British Superbike teams.

Pop-up retailer popped

Sook was a start-up business that looked to create pop-up units for retailers in shopping centres in the UK and South Africa. Founded in 2019 the firm promised to improve the “future of the high street by providing brands with access to flexible pop-up spaces.” The company ceased trading on the last day of 2023 with units in London, Birmingham, Southampton, Liverpool, Newcastle, Leeds and Kent, as well as one space in Johannesburg, South Africa.

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