End of Summer insolvency news round up
If it feels like the year continues to move in slow motion, it’s matched in some of the administration, redundancy and insolvency news stories that have happened recently as businesses and people seek some time off and respite before hopefully resuming an increased workload for the rest of the year.
As usual, we’ve been keeping track of some of the more noteworthy stories you might have missed in the past couple of weeks so catch up here.
Yo Sushi in CVA
The restaurant industry has experienced a more turbulent time than most in 2020 with several chains closing the doors of several of their locations.
Yo! Sushi is the latest to enter a Company Voluntary Arrangement with its creditors agreeing to the deal, although this will see 19 of the businesses 69 sites close immediately.
Richard Hodgson, Chief Executive said he was pleased that the group’s creditors had supported them in what were “exceptionally challenging times” for the sector.
He said: “This will ensure Yo! Has a solid foundation to continue to adapt to the changes brought about by Covid-19 and allows us to focus on reopening remaining sites and rolling out our new restaurant model.
They aren’t the only ones – Pizza Express are close to agreeing a CVA with creditors and plan to lose 1,100 positions across 73 outlets that will close as well as agreeing rent reductions with landlords and a temporary move from quarterly to monthly rent arrangements.
Zoe Bowley, Pizza Express’s managing director for the UK and Ireland said: “Unfortunately, the impact of the global pandemic has meant that we’ve had to make some incredibly tough decisions to safeguard Pizza Express for the long term.”
M&S consolidate online with casualties
Marks & Spencer is the latest retailer to address difficulties in its immediate future with a swift downsizing policy.
They announced that 7,000 positions will be shed over the next three months as it pivots away from its traditional big store model and its home delivery partnership with Ocado begins.
The retailer confirmed that the roles would be across its central support centre, regional management and stores to “reflect the change felt throughout the business over the past few months.”
it expects the majority of roles to go through voluntary redundancies and early retirements and stressed that new roles would eventually be created in online fulfilment to underline the shift in the business focus and customer demands.
Job losses in the Lakes
It’s not just factories and hospitality businesses that are facing hard choices.
The Lake District National Park Authority is set to make redundancies in order to make up a £1.2m deficit caused by lockdown and lack of visitors over the Spring and Summer months.
Richard Leafe, Chief Executive of the national park said: “Like many organisations, we’ve been financially hit by the Covid pandemic.
“During the lockdown all the commercial services were closed down. Car parks, information centres, shops, cafes and boating centres all closed. This meant we had no income from any of them.
“This reduced our overall income so we should look at making savings. We receive £5.5 million from the Government each year and a similar amount comes in from commercial income but we don’t expect income from commercial services to return to normal any time soon. ”
Two thirds of staff remain furloughed and while visitors are starting to return slowly, there is no suggestion that they could come back in any significant numbers before the end of Autumn.
The downturn affecting airlines and ancillary services continues as flights remain grounded and countries wary about letting in travellers between themselves without quarantine periods.
Do&Co, the in-flight caterer that supplies British Airways among others, is making over 2,100 redundancies in their workforce of over 2,400.
The company said they have seen a reduction of 85% in workload across all their contracts.
They aren’t alone – Unite estimate that out of a total Heathrow catering workforce of 4,500 – 3,000 are facing redundancy.
The change of season gives companies a natural chance to hit a reset button and start a renewed push for increased business and sales before the big unknown that will be this year’s Christmas holiday period.
There may be bumpier times ahead before the decorations go up however – the government’s Covid-19 support packages are due to end in October with staffing decisions being unable to be put off any further.
One decision you can take now that will be able to give you confidence about your future directions and decisions is to get in touch with us.
We will arrange a free virtual consultation whenever you want it to help you plan your immediate future and further steps you can take to make sure your business is robust and resilient going ahead.