40 stores to close... (part 3)

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Re: 40 stores to close... (part 3)

Post by William Joseph1 » Tue Mar 19, 2019 6:42 pm

Former Staples chain Office Outlet in administration
https://www.bbc.co.uk/news/business-47626280
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Re: 40 stores to close... (part 3)

Post by pabenny » Tue Mar 19, 2019 6:59 pm

Another one that I shan't miss.
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Re: 40 stores to close... (part 3)

Post by Boro Boy » Thu Mar 21, 2019 7:11 pm

Good News on the retail front! ...for once profits are booming in retail, Wren Kitchens owned by The West Retail Group who also own eBuyer seem to have a full bank account!: http://www.kbbreview.com/22042/news/pro ... -kitchens/
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Re: 40 stores to close... (part 3)

Post by pabenny » Fri Mar 22, 2019 6:42 am

Without wishing to appear nit-picking, the linked article refers to growth in profits but says nothing about their bank balances.

Growing businesses can be profitable but go under because of lack of cash (probably not the case here). The trouble can be that the cash is tied up in stock, in receivables or has been over-invested in equipment, leaving nothing to pay the wages or suppliers.

Most larger businesses have a moderate level of debt by choice rather than it being a sign of distress or difficulty (if you really want I can explain the rationale).
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Re: 40 stores to close... (part 3)

Post by Boro Boy » Fri Mar 22, 2019 9:11 am

pabenny wrote:
Fri Mar 22, 2019 6:42 am
Without wishing to appear nit-picking, the linked article refers to growth in profits but says nothing about their bank balances.

Growing businesses can be profitable but go under because of lack of cash (probably not the case here). The trouble can be that the cash is tied up in stock, in receivables or has been over-invested in equipment, leaving nothing to pay the wages or suppliers.

Most larger businesses have a moderate level of debt by choice rather than it being a sign of distress or difficulty (if you really want I can explain the rationale).
Not necessarily the case here, Wren has a lead in period whilst items constructed and materials are relatively inexpensive with very reasonable mark up...
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Re: 40 stores to close... (part 3)

Post by Constantine » Fri Mar 22, 2019 10:01 pm

Wren filed their 2018 accounts 4 days ago. They had £52m in the bank.
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Re: 40 stores to close... (part 3)

Post by hugginhill » Fri Mar 22, 2019 10:24 pm

Wren filed their 2018 accounts 4 day ago. They had net current liabilities of £61millon.

Picking single figures from a set of accounts is stupid.
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Re: 40 stores to close... (part 3)

Post by Boro Boy » Fri Mar 22, 2019 11:22 pm

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Re: 40 stores to close... (part 3)

Post by pabenny » Sat Mar 23, 2019 8:44 am

Constantine wrote:
Fri Mar 22, 2019 10:01 pm
Wren filed their 2018 accounts 4 days ago. They had £52m in the bank.
hugginhill wrote: Wren filed their 2018 accounts 4 day ago. They had net current liabilities of £61millon.
Although it's true that Wren do have ample cash in the bank, part of my point was that this is not stated in the article. People often conflate cash and profits and likewise debt and losses.

And as Boro Boy points out, Wren's business model does (or at least should) doesn't need high levels of borrowing.
hugginhill wrote: Picking single figures from a set of accounts is stupid.
Agree. Although if I was to pick just one figure, it would be cashflow. Specifically cashflow from operations.
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Re: 40 stores to close... (part 3)

Post by pabenny » Sat Mar 23, 2019 9:06 am

Debenhams seems to be teetering. For me the only surprise is how long it's survived.

Who next? The 'value' retailers have been expanding rapidly and there may be too many of them - B&M have picked up lots of sites from Homebase and other distressed stores, which may help with rents. TJ Morris (Home Bargains) have always been very canny and look solid. Poundstretcher looks vulnerable to me - from those I've seen, the stores are really dire and staff are demoralised. Poundland is not as bad but may choose to focus on other markets like Spain and Ireland.

Betting shops will close following restrictions on gaming machines.

And then any that turn out to have picked the wrong with Brexit strategy and don't have the resilience to withstand the consequences. (not a pro- or anti- discussion just referring to an effect of major uncertainty)
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